Ralph Lauren (RL) Tops Q4 EPS by 23c

Ralph Lauren (NYSE: RL) reported Q4 EPS of $2.27, $0.23 better than the analyst estimate of $2.04. Revenue for the quarter came in at $1.7 billion versus the consensus estimate of $1.64 billion.

Increase in Share Repurchase Authorization

The Company repurchased approximately $425 million of Class A Common Stock in Fiscal 2025, with $352 million remaining on its existing share repurchase plan at the end of the fiscal year. In addition, in May, the Company's Board of Directors authorized a new $1.5 billion stock repurchase program permitting it to purchase shares of Class A Common Stock, subject to overall business and market conditions.

First Quarter and Preliminary Full Year Fiscal 2026 Outlook

The Company's outlook is based on its best assessment of the current geopolitical and macroeconomic environment, including tariffs, inflationary pressures, and other consumer spending-related headwinds, global supply chain disruptions, and foreign currency volatility, among other factors. The full year Fiscal 2026 and first 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. Given the high level of volatility in the current operating environment, this outlook is considered preliminary and subject to change as a result of ongoing trade developments and other considerations.

For Fiscal 2026, the Company expects revenues to increase approximately low-single digits to last year on a constant currency basis, with growth weighted to the first half of the fiscal year.

The Company expects operating margin for Fiscal 2026 to expand modestly in constant currency, driven primarily by operating expense leverage. Based on the Company's current assessment of tariff rates, gross margin is expected to be approximately flat in constant currency, with AUR growth, reduced cotton costs and favorable geographic and channel mix offsetting the negative impact of increased tariffs and non-cotton material costs. Based on current exchange rates, foreign currency is expected to have a relatively minimal impact on revenue and gross and operating margins in Fiscal 2026.

For the first quarter, the Company expects revenues to increase approximately high-single digits to last year on a constant currency basis.

Operating margin for the first quarter is expected to expand approximately 150 to 200 basis points in constant currency, driven primarily by gross margin expansion as well as modest operating expense leverage. Foreign currency is expected to have a roughly minimal impact on revenue and gross and operating margins in the first quarter.

The full year Fiscal 2026 tax rate is expected to be in the range of 20% to 22%, assuming a continuation of current tax laws. First quarter of Fiscal 2026 tax rate is expected to be approximately 20% to 21%.

The Company is planning capital expenditures for Fiscal 2026 of approximately 4% to 5% of revenue.

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

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