Ralph Lauren (RL) adds 5% as Asia fuels FQ4 outperformance; Goldman encouraged

Ralph Lauren (NYSE: RL) posted stronger-than-expected results for its fourth fiscal quarter.

As a result, the RL stock trades over 5% higher on Thursday.

Ralph Lauren reported an FQ4 EPS of $0.90 to easily top the expected $0.60. Revenue for the quarter came in at $1.54 billion versus the consensus estimate of $1.47B. The drop in North America and Europe revenues was offset by Asia sales surging 13% to $390 million.

Comparable sales rose 6%, ahead of the +4.8% expected, as Asia comparable sales surged as much as 20%. On a more negative note, inventory rose by 10%, more than the 8.6% expected.

On the guidance front, the company said:

“For the first quarter, the Company expects revenues to be flat to up slightly to last year on a constant currency basis… For Fiscal 2024, the Company expects revenues to increase approximately low-single digits to last year on a constant currency basis.”

Goldman Sachs analyst Brooke Reach said the FQ4 upside was “solid.”

“We are encouraged by the solid sales-driven F4Q result, with particular strength in International regions, though we note our conversations ahead of the print suggested a 4Q beat was expected. That said, we note that RL’s revenue outlook for the year is modestly below prior FactSet consensus growth rates for both 1Q and the FY on a reported and ex-FX basis.”

By Senad Karaahmetovic

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