Ralph Lauren (RL) Tops Q3 EPS by 18c, Offers FY Guidance

Ralph Lauren (NYSE: RL) reported Q3 EPS of $2.32, $0.18 better than the analyst estimate of $2.14. Revenue for the quarter came in at $1.7 billion versus the consensus estimate of $1.66 billion.

• North America sales increased 3% to last year, with 4% retail comps more than offsetting planned reductions to the off-price wholesale channel

Full Year Fiscal 2019 and Fourth Quarter Outlook

The full year Fiscal 2019 and fourth quarter guidance excludes restructuring-related and other charges, as described in the “Non-U.S. GAAP Financial Measures” section of this press release.

For Fiscal 2019, the Company now expects net revenue to be up slightly on a constant currency basis. Foreign currency is expected to have approximately 80 to 90 basis points of negative impact on revenue growth in Fiscal 2019.

The Company now expects operating margin for Fiscal 2019 to increase 60 basis points in constant currency, up from 40 to 60 basis points previously, driven by gross margin expansion. Foreign currency is expected to have minimal impact on operating margin in Fiscal 2019.

In the fourth quarter of Fiscal 2019, the Company expects net revenue to be down slightly in constant currency due to a planned reduction in off-price sales. Foreign currency is expected to pressure revenue growth by about 300 basis points in the fourth quarter of Fiscal 2019.

Operating margin for the fourth quarter of Fiscal 2019 is expected to be up about 70 basis points in constant currency. Foreign currency is expected to have about 60 basis points of negative impact on operating margin in the fourth quarter.

We expect the full year Fiscal 2019 tax rate to be approximately 21%. The tax rate for the fourth quarter of Fiscal 2019 is estimated at 16% to 17%.

The Company now expects capital expenditures of approximately $250 million for Fiscal 2019, down from our previous expectation of $275 million due to timing shifts into Fiscal 2020.

For earnings history and earnings-related data on Ralph Lauren (RL) click here.

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