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Dec 26, 2020
Ralph Lauren Q3 2021 Earnings Report
Ralph Lauren's Q3 2021 earnings were impacted by COVID-19, but Asia exceeded expectations and digital commerce grew.
Key Takeaways
Ralph Lauren reported Q3 Fiscal 2021 results with revenue of $1.4 billion, down 18% year-over-year. Despite the revenue decline, the company saw stronger than expected gross and operating margins driven by increased average unit retail and expense reductions. Asia outperformed expectations with mid-teens growth, and global digital commerce sales increased more than 20%.
Third quarter revenues were $1.4 billion, reflecting continued recovery from COVID-19 impacts.
Asia exceeded expectations with mid-teens growth.
Global digital commerce sales increased more than 20%, with double-digit growth across all regions and continued expansion in profitability.
Gross and operating margins were stronger than expected, driven by a 19% increase in average unit retail and continued expense reductions.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
For the fourth quarter, the company expects revenues to decline approximately mid-to-high single digits to last year.
Positive Outlook
- Gross margin expansion continuing through the fourth quarter, albeit at a more moderate rate compared to the first three quarters of the year.
- Excluding marketing investments, we expect operating expenses to decline low single-digits compared to last year.
- Based on our current outlook, we plan to reinstate the Company's quarterly dividend in the first half of Fiscal 2022.
Challenges Ahead
- Ongoing high level of uncertainty and evolving situation surrounding COVID-19 impacting the timing and path of recovery in each market, including the potential for further resurgences of the pandemic across various markets.
- Financial results for both the fourth quarter and full year Fiscal 2021 to continue to be adversely impacted by the pandemic and prolonged demand recovery.
- Revenues to decline approximately mid-to-high single digits to last year, a sequential improvement from the first three quarters of the fiscal year.
- Outlook reflects confirmed government-mandated lockdowns and other COVID-related restrictions across several of our key markets, notably in Europe and Japan.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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