Ralph Lauren Q3 2022 Earnings Report
Key Takeaways
Ralph Lauren reported a strong Q3 2022 with revenue up 27% to $1.8 billion and EPS of $2.93. The company raised its fiscal year 2022 outlook, expecting revenue growth of 39% to 41% in constant currency and an adjusted operating margin of approximately 13%.
All regions reported double-digit revenue growth, exceeding expectations and surpassing pre-pandemic levels, particularly in North America.
Ralph Lauren's digital ecosystem revenue increased by over 40%, with owned digital commerce growing by more than 30%.
Operating margin was 15.9%, up 400 basis points on a reported basis and 260 basis points on an adjusted basis.
The company repurchased 2.5 million shares during the quarter and authorized a new $1.5 billion stock repurchase program.
Ralph Lauren
Ralph Lauren
Ralph Lauren Revenue by Segment
Forward Guidance
The company expects revenue to increase approximately 17% to 18% in constant currency and operating margin for the fourth quarter is expected to be approximately 4.2% in constant currency.
Positive Outlook
- Company now expects constant currency revenue growth of approximately 39% to 41% to last year on a 53-week reported basis
- The Company also raised its outlook for operating margin for Fiscal 2022 to approximately 13% on both a reported and constant currency basis
- Gross margin is expected to increase 70 to 90 basis points to last year, up from 50 to 70 basis points previously, with stronger AUR growth and favorable product mix more than offsetting increased freight headwinds.
Challenges Ahead
- Foreign currency is expected to negatively impact revenue growth by approximately 400 basis points.
- Foreign currency is expected to negatively impact operating margin by approximately 120 basis points.
- The Company continues to note the ongoing uncertainty and evolving situation surrounding COVID-19 impacting the timing and path of recovery in each market, including the potential for further outbreaks or resurgences of the pandemic across various markets as well as potential global supply chain disruptions.
- The Company’s outlook is based on its best assessment of the current macro environment, including global supply chain, inflationary pressures, the Omicron variant and other COVID-related disruptions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income