Ralph Lauren (RL) Tops Q3 EPS by 32c; Raises Outlook
Ralph Lauren (NYSE: RL) reported Q3 EPS of $4.82, $0.32 better than the analyst estimate of $4.50. Revenue for the quarter came in at $2.1 billion versus the consensus estimate of $2.01 billion.
GUIDANCE:
Full Year Fiscal 2025 and Fourth Quarter Outlook
The Company's outlook is based on its best assessment of the current geopolitical and macroeconomic environment, including inflationary pressures, tariffs and other consumer spending-related headwinds, global supply chain disruptions and foreign currency volatility, among other factors. The full year Fiscal 2025 and fourth quarter guidance excludes any potential restructuring-related and other net charges that may be incurred in future periods, as described in the "Non-U.S. GAAP Financial Measures" section of this press release.
For Fiscal 2025, the Company now expects constant currency revenues to increase in a range of approximately 6% to 7%. Based on current exchange rates, foreign currency is expected to negatively impact revenues by approximately 100 to 150 basis points in Fiscal 2025.
The Company now expects operating margin for Fiscal 2025 to expand approximately 120 to 160 basis points in constant currency, up slightly from its prior outlook, driven by gross margin expansion of approximately 130 to 170 basis points. Foreign currency is now expected to negatively impact both gross and operating margins by approximately 30 to 50 basis points.
For the fourth quarter, the Company expects constant currency revenues to grow in a range of approximately 6% to 7%. Foreign currency is expected to negatively impact revenue growth by approximately 300 basis points.
Operating margin for the fourth quarter is expected to expand approximately 120 to 140 basis points in constant currency, driven by approximately 80 to 120 basis points of gross margin expansion and modest operating expense leverage. Foreign currency is expected to negatively impact both gross and operating margins by approximately 60 to 80 basis points in the fourth quarter.
The Company's full year Fiscal 2025 tax rate is still expected to be in the range of approximately 22% to 23%, increasing from 19% in the prior year, following discrete tax benefits recognized in the prior year period. The fourth quarter tax rate is expected to be approximately 24% to 25%.
The Company now expects capital expenditures for Fiscal 2025 of approximately $200 million to $250 million.
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