Free Post Earnings Research Report: Ralph Lauren's Adjusted EPS Climbed 9%

Stock Monitor: Superior Uniform Group Post Earnings Reporting

LONDON, UK / ACCESSWIRE / February 23, 2018 / Active-Investors.com has just released a free earnings report on Ralph Lauren Corp. (NYSE: RL). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=RL. Ralph Lauren reported its third quarter fiscal 2018 operating and financial results on February 01, 2018. The apparel maker recorded its twelfth consecutive quarter of outbeat earnings and provided guidance for the upcoming quarter and fiscal year. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is currently working on the research report for Superior Uniform Group, Inc. (NASDAQ: SGC), which also belongs to the Consumer Goods sector as the Company Ralph Lauren. Do not miss out and become a member today for free to access this upcoming report at:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Ralph Lauren most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=RL

Earnings Highlights and Summary

In the third quarter of fiscal 2018, Ralph Lauren's revenue dropped 4% to $1.64 billion compared to revenue of $1.71 billion in Q3 FY17. For the reported quarter, the decline in revenue was attributed to initiatives undertaken to increase quality of sales, reduce promotional activity, and elevate the Company's distribution as well as brand exits and lower consumer demand. Ralph Lauren's reported numbers fell short of analysts' estimates of $1.65 billion.

During Q3 FY18, Ralph Lauren's gross profit was $996.2 million compared to $983.2 million in Q3 FY17. The Company's gross margin was 60.7% in the reported quarter, 250 basis points above the prior year. Gross margin increase was driven by initiatives to improve quality of sales through reduced promotional activity, favorable geographic and channel mix shifts, and improved product costs.

Ralph Lauren's operating income in Q3 FY18 was $189.2 million on a reported basis compared to $128.3 million in Q3 FY17. On an adjusted basis, the Company's operating income of $216 million declined 1% on a y-o-y basis, while its operating margin was 13.2%, 40 basis points above the prior year's same period. The higher operating margin was attributable to gross margin expansion and foreign currency benefit of 50 basis points.

In Q3 FY18, Ralph Lauren had an effective tax rate of 143.9% on a reported basis and 21.6% on an adjusted basis, compared to a reported and an adjusted effective tax rate of 34% and 28%, respectively, in Q3 FY17.

On a reported basis, Ralph Lauren's net loss was $81.8 million, or $1.00 per diluted share, in Q3 FY18 compared to net income of $81.3 million, or $0.98 per diluted share, in Q3 FY17. On an adjusted basis, the Company's net income was $167 million, or $2.03 per diluted share, excluding any impact from tax reform as well as restructuring and related charges, compared to net income of $155 million, or $1.86 per diluted share, on an adjusted basis, for the year earlier quarter. Ralph Lauren's earnings beat Wall Street's estimates of $1.87 per share.

Ralph Lauren's Segment Results

During Q3 FY18, the North America segment's revenue fell 11% to $886.4 million compared to $1.00 billion in Q3 FY17. The decline was attributed to lower sales in both the retail and wholesale channels, driven by distribution and brand exits, a strategic reduction in shipments and promotional activity to increase quality of sales, as well as lower consumer demand. On a constant currency basis, comparable store sales in North America were down 10%, primarily due to a planned reduction in promotional activity and lower traffic.

During Q3 FY18, North America's operating income was $197 million on a reported basis. The segment's adjusted operating margin was 22.4% in the reported quarter, 160 basis points above the year ago same period.

For Q3 FY18, the European segment revenue grew 8% to $378.5 million compared to $349.2 million in Q3 FY17. On a constant currency basis, comparable store sales in Europe were down 8%, attributed to a 9% decline in brick and mortar stores and a 1% decline in e-commerce. The Europe segment's operating income in Q3 FY18 was $81 million on both a reported and adjusted basis. Adjusted Europe operating margin was 21.4%, which was 270 basis points higher than the prior year's corresponding period.

Ralph Lauren's revenue in Asia advanced 7% to $251.0 million in Q3 FY18 compared to $235.2 million in Q3 FY17, driven by strength in both retail and wholesale channels. Comparable store sales increased 3% in a constant currency driven by improved conversion, average unit retail, and the number of transactions. The segment's operating income was $44 million on a reported basis and $45 million on an adjusted basis in the reported quarter. Adjusted Asia operating margin was 17.7%, up 140 basis points to prior year.

Balance Sheet and Cash Flow Review

Ralph Lauren ended Q3 FY18 with $2.1 billion in cash, short and long-term investments and $589 million in total debt compared to $1.5 billion and $589 million, respectively, at the end of Q3 FY17.
Ralph Lauren's inventory at the end of Q3 FY18 was $825 million, down 16% on a y-o-y basis, driven primarily by improvement in operating processes, including a proactive pullback in receipts and moving towards a demand driven supply chain. The Company had $48 million in capital expenditures in the reported quarter compared to $60 million in the prior year's same period, primarily driven by lower IT and infrastructure investments and an increased focus on return on investment.

Outlook

For fiscal 2018, Ralph Lauren is forecasting net revenue to decrease 8% to 9% on a y-o-y basis. Based on the year-to-date performance, the Company now expects operating margin for FY18 to be 10.0% to 10.5% versus previous guidance of 9.5% to 10.5%. Ralph Lauren is estimating s capital expenditures of approximately $200 million for FY18, which is lower than its previous guidance of $225 million.

For Q4 2018, Ralph Lauren is projecting net revenue to be down 8% to 10% on a y-o-y basis. The Company's operating margin for the upcoming quarter is expected to be down 240 to 260 basis points.

Stock Performance Snapshot

February 22, 2018 - At Thursday's closing bell, Ralph Lauren's stock was marginally up 0.79%, ending the trading session at $107.51.

Volume traded for the day: 673.02 thousand shares.

Stock performance in the last three-month - up 20.04%; previous six-month period - up 26.01%; past twelve-month period - up 37.64%; and year-to-date - up 3.68%

After yesterday's close, Ralph Lauren's market cap was at $8.85 billion.

Price to Earnings (P/E) ratio was at 59.40.

The stock has a dividend yield of 1.86%.

The stock is part of the Consumer Goods sector, categorized under the Textile - Apparel Clothing industry. This sector was up 0.2% at the end of the session.

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