Ralph Lauren Q1 2024 Earnings Report
Key Takeaways
Ralph Lauren reported a slight increase in revenue, driven by growth in Asia and Europe. The company's EPS grew, and it maintained a healthy balance sheet with $1.7 billion in cash and short-term investments. The company reaffirmed its full-year outlook.
Revenue increased slightly on a reported basis and 1% in constant currency, led by Asia and Europe.
Global direct-to-consumer comparable store sales grew low-single digits, driven by strong full-price retail performance and double-digit AUR growth.
Gross margin expansion resulted in operating margin and double-digit EPS growth, with brand elevation offsetting product cost headwinds.
The company maintained a healthy balance sheet with $1.7 billion in cash and short-term investments and inventory growth of 1%.
Ralph Lauren
Ralph Lauren
Ralph Lauren Revenue by Segment
Forward Guidance
The Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis. For the second quarter, the Company expects revenue to be flat to up slightly to last year in constant currency.
Positive Outlook
- Revenue to increase approximately low-single digits to last year on a constant currency basis.
- Operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency, driven by gross margin expansion.
- Gross margin is now expected to increase approximately 100 basis points in constant currency.
- Reduced freight costs, favorable geographic mix and continued growth in AUR more than offsetting product cost inflation.
- Full year Fiscal 2024 tax rate is now expected in the range of approximately 23% to 24%.
Challenges Ahead
- Foreign currency is expected to negatively impact revenue growth by approximately 20 basis points in Fiscal 2024.
- Foreign currency is expected to negatively impact gross margins by approximately 30 basis points in Fiscal 2024.
- 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.
- Foreign currency is expected to negatively impact gross margin by approximately 10 basis points in the quarter.
- Capital expenditures for Fiscal 2024 of approximately $250 million to $275 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income