Ralph Lauren (NYSE: RL) reported Q1 EPS of $2.34, $0.21 better than the analyst estimate of $2.13. Revenue for the quarter came in at $1.5 billion versus the consensus estimate of $1.48 billion.

Full Year Fiscal 2024 and Second Quarter Outlook

For Fiscal 2024, the Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis. Based on current exchange rates, foreign currency is now expected to negatively impact revenue growth by approximately 20 basis points in Fiscal 2024.

The Company continues to expect operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency, driven by gross margin expansion. Foreign currency is expected to have a roughly neutral impact on operating margin in Fiscal 2024. Gross margin is now expected to increase approximately 100 basis points in constant currency, compared to the previous outlook of 50 to 100 basis points expansion, with reduced freight costs, favorable geographic mix and continued growth in AUR more than offsetting product cost inflation. Foreign currency is expected to negatively impact gross margins by approximately 30 basis points in Fiscal 2024. Gross margin expansion is expected to more than offset higher operating expenses as a percent of revenue as the Company invests in long-term strategic growth initiatives, notably digital and key city ecosystem expansion.

For the second quarter, the Company expects revenue to be flat to up slightly to last year in constant currency. Foreign currency is expected to benefit revenue growth by approximately 100 basis points.

Operating margin for the second quarter is expected to be in the range of 9.5% to 10.0% on a reported basis and 9.0% to 9.5% in constant currency. The Company expects constant currency gross margin expansion of 40 to 60 basis points to be more than offset by higher operating expenses due to the timing of strategic investments in the period, with a higher proportion of marketing and ecosystem investments in the second quarter of the fiscal year. Foreign currency is expected to negatively impact gross margin by approximately 10 basis points in the quarter.

Full year Fiscal 2024 tax rate is now expected in the range of approximately 23% to 24%, assuming a continuation of current tax laws, while second quarter tax rate is expected in the range of 21% to 22%.

The Company now expects capital expenditures for Fiscal 2024 of approximately $250 million to $275 million.

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