RL - Ralph Lauren beats FQ1 top and bottom line estimates; initiates Q3 and reaffirms FY23 outlook

2023-08-10 08:07:19 ET

• Ralph Lauren press release ( NYSE: RL ): FQ1 Non-GAAP EPS of $2.34 beats by $0.21 .
• Revenue of $1.5B (+1.0% Y/Y) beats by $20M .
• In the first quarter of Fiscal 2024, the company had an effective tax rate of approximately 23% on both a reported and adjusted basis. This compared to an effective tax rate of approximately 24% on both a reported and adjusted basis in the prior year period.
• The company ended the first quarter of Fiscal 2024 with $1.7 billion in cash and short-term investments and $1.1 billion in total debt, compared to $1.8 billion and $1.1 billion, respectively, at the end of the first quarter of Fiscal 2023.
• Full Year Fiscal 2024 and Second Quarter Outlook :  For Fiscal 2024, the Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis. Based on current exchange rates, foreign currency is now expected to negatively impact revenue growth by approximately 20 basis points in Fiscal 2024.
• The Company continues to expect operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency, driven by gross margin expansion. Foreign currency is expected to have a roughly neutral impact on operating margin in Fiscal 2024. Gross margin is now expected to increase approximately 100 basis points in constant currency, compared to the previous outlook of 50 to 100 basis points expansion.

• For the second quarter, the company expects revenue to be flat to up slightly to last year in constant currency. Foreign currency is expected to benefit revenue growth by approximately 100 basis points.

• 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. The Company expects constant currency gross margin expansion of 40 to 60 basis points to be more than offset by higher operating expenses due to the timing of strategic investments in the period.

• Full year Fiscal 2024 tax rate is now expected in the range of approximately 23% to 24%, assuming a continuation of current tax laws, while second quarter tax rate is expected in the range of 21% to 22%.

• The Company now expects capital expenditures for Fiscal 2024 of approximately $250 million to $275 million.

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