RL - Ralph Lauren reports FQ2 earnings beat; maintains FY22 and issues Q3 guidance

• Ralph Lauren press release ( NYSE: RL ): Q2 Non-GAAP EPS of $2.23 beats by $0.15 .
• Revenue of $1.6B (+6.7% Y/Y) beats by $40M .
• Adjusted operating income was $211M and operating margin was 13.4%, 370 basis points below the prior year.
• Maintained Full Year Fiscal 2023 Outlook in constant currency with Net Revenue expected to increase high-single-digits and adjusted operating margin at low end of prior range of 14.0% to 14.5%; revised foreign currency outlook to reflect strengthening U.S. dollar.
• For the third quarter, the company expects revenue to increase low- to mid-single digits in constant currency to last year. Foreign currency is expected to negatively impact revenue growth by approximately 780 basis points. The third quarter and second half outlook reflects increased caution around consumer sentiment in Europe and North America.
• Operating margin for the third quarter is expected to be in a range of 17.3% to 17.8% in constant currency, driven primarily by gross margin expansion. Foreign currency is expected to negatively impact third quarter operating margin by approximately 180 basis points and gross margin by approximately 170 basis points.
• Third quarter and full year Fiscal 2023 tax rates are both expected to be in the range of 25% to 26%, assuming a continuation of current tax laws.

• The Company moderated its plan for capital expenditures for Fiscal 2023 to approximately $250 million to $275 million based on timing of projects.

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