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Dec 30, 2023
Ralph Lauren Q3 2024 Earnings Report
Ralph Lauren reported strong Q3 2024 holiday results ahead of expectations.
Key Takeaways
Ralph Lauren's Q3 2024 revenue increased by 6% to $1.9 billion, with Asia leading the growth. Diluted EPS grew by 31% to $4.19, and adjusted EPS grew by 24% to $4.17. The company reiterated its full-year fiscal 2024 outlook, expecting low-single-digit revenue growth.
Revenue increased by 6% on a reported basis and 5% in constant currency, with all regions exceeding expectations, led by Asia.
Global Direct-to-Consumer comparable store sales accelerated to 9% growth, driven by positive retail comps across all regions and channels.
Operating margins exceeded expectations due to brand elevation and expense discipline.
Reported diluted EPS grew by 31%, and adjusted EPS grew by 24%, reflecting strong operating profit growth and discrete tax benefits.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The company expects revenue growth to be in a range centered around 2% in constant currency for the fourth quarter. Operating margin for the fourth quarter is expected to expand approximately 350 to 400 basis points in constant currency.
Positive Outlook
- Revenue to increase approximately low-single digits to last year on a constant currency basis, now centering around 2% compared to 1% to 2% previously.
- Foreign currency is now expected to have a modest benefit on revenue growth of approximately 10 basis points in Fiscal 2024.
- Operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency to 12.3% to 12.5%, driven by gross margin expansion.
- Gross margin is now expected to increase approximately 140 to 180 basis points in constant currency, with reduced freight costs, favorable channel and geographic mix and continued growth in AUR more than offsetting product cost inflation.
- Operating margin for the fourth quarter is expected to expand approximately 350 to 400 basis points in constant currency, driven largely by gross margin expansion.
Challenges Ahead
- Foreign currency is expected to negatively impact revenue growth by approximately 160 basis points in the fourth quarter.
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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