Ralph Lauren Q3 2023 Earnings Report
Key Takeaways
Ralph Lauren reported a 1% increase in revenue (7% in constant currency) and EPS of $3.20 ($3.35 adjusted) for Q3 2023. The company's performance was driven by strong consumer demand and growth in key regions like Asia and Europe.
Revenue increased by 1% on a reported basis and 7% in constant currency, exceeding expectations.
Operating margin was 15.4% on a reported basis, with an adjusted operating margin of 16.0%.
The company continued to invest in strategic priorities while returning approximately $560 million to shareholders through dividends and share repurchases year-to-date.
Full year fiscal 2023 outlook reiterated with high-single digit net revenue growth in constant currency and adjusted operating margin expected in the range of 13.5% to 14.0% in constant currency.
Ralph Lauren
Ralph Lauren
Ralph Lauren Revenue by Segment
Forward Guidance
The Company expects revenue to increase mid- to high-single digits in constant currency to last year on a 13-week comparable basis. Operating margin for the fourth quarter is expected to be approximately 5.5% in constant currency.
Positive Outlook
- Revenue to increase mid- to high-single digits in constant currency to last year on a 13-week comparable basis.
- Operating expense leverage more than offsetting continued long-term investments in new consumer recruitment and key city ecosystem expansion.
- Full year Fiscal 2023 tax rate is expected in the range of approximately 24% to 25%.
- Company continues to expect constant currency revenues to increase approximately high-single digits to last year, or about 8%, on a 52-week comparable basis.
- Company moderated its plan for capital expenditures for Fiscal 2023 to approximately $240 million to $250 million based on timing of projects.
Challenges Ahead
- Foreign currency is expected to negatively impact revenue growth by approximately 500 basis points.
- Foreign currency is expected to negatively impact fourth quarter operating margin by approximately 160 basis points and gross margin by approximately 140 basis points.
- Fourth quarter tax rate is expected at approximately 29%, assuming a continuation of current tax laws.
- Foreign currency is now expected to negatively impact revenue growth by approximately 600 basis points in Fiscal 2023.
- Operating margin for Fiscal 2023 in the range of 13.5% to 14.0% in constant currency, slightly below the previous outlook of approximately 14.0% on moderated gross margin expectations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income