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Thursday, November 7, 2019

=Ralph Lauren (RL) reported earnings on Thur 7 Nov 19 (b/o)

Ralph Lauren beats by $0.16, reports revs in-line; guides Q3 revs below consensus; reaffirms FY20 revs guidance

  • Reports Q2 (Sep) earnings of $2.55 per share, excluding non-recurring items, $0.16 better than the S&P Capital IQ Consensus of $2.39; revenues rose 0.9% year/year to $1.71 bln vs the $1.69 bln S&P Capital IQ Consensus.
    • Adjusted operating income was $254 million and adjusted operating margin was 14.9%, 100 basis points above the prior year, excluding restructuring-related and other charges from both periods.
    • North America revenue in the second quarter decreased 1% to $881 million. In retail, comparable store sales in North America were up 2%, driven by a 2% comp increase in brick and mortar stores and 2% increase at North America wholesale revenue decreased 6%.
    • Asia revenue in the second quarter increased 4% to $255 million on a reported basis and 5% in constant currency, driven by solid growth in retail. Comparable store sales in Asia increased 1%, reflecting growth in both brick and mortar and digital commerce operations, partly offset by declines in Hong Kong.
  • Co issues downside guidance for Q3, sees Q3 revs of about flat to $1.726 in 3Q19 vs. $1.75 bln S&P Capital IQ Consensus.
    • Foreign currency is expected to pressure revenue growth by approximately 70 to 90 basis points in the third quarter of Fiscal 2020.
    • Operating margin for the third quarter of Fiscal 2020 is expected to be flat to down about 20 basis points in constant currency.
  • Co reaffirms guidance for FY20, continues to expect net revenue growth of 2% to 3% (implying $6.46-6.53 bln) on a constant currency basis but now expects results at the low end of this range, primarily based on intensifying headwinds in Hong Kong vs. $6.4 bln S&P Capital IQ Consensus.
    • The Company continues to expect operating margin for Fiscal 2020 to increase 40 to 60 basis points in constant currency.
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