Ralph Lauren (RL) Tops Q1 EPS by $1.43

Ralph Lauren (NYSE: RL) reported Q1 EPS of $2.29, $1.43 better than the analyst estimate of $0.86. Revenue for the quarter came in at $1.4 billion versus the consensus estimate of $1.21 billion.

Full Year Fiscal 2022 and Second Quarter Outlook

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 full year Fiscal 2022 and second quarter guidance excludes restructuring-related and other charges, as described in the "Non-U.S. GAAP Financial Measures" section of this press release.

For Fiscal 2022, the Company now expects constant currency revenues to increase approximately 25% to 30% to last year on a 53-week reported basis. Foreign currency is expected to positively impact revenue growth by approximately 30 basis points. The 53rd week is expected to represent approximately 140 basis points of this year’s revenue growth.

The Company now expects operating margin for Fiscal 2022 of about 12.0% to 12.5%. This compares to operating margin of 4.8% in the prior year period and 10.3% in Fiscal 2020. Operating margin expansion is expected to be primarily driven by operating expense leverage. Gross margin is now expected to increase 50 to 70 basis points to last year, up from the Company’s previous outlook of a 40 to 60 basis point decline, with stronger average unit retail growth and favorable product mix more than offsetting increased freight headwinds.

For second quarter Fiscal 2022, revenues are expected to increase approximately 20% to 22% in constant currency to last year. Foreign currency is expected to positively impact revenue growth by approximately 50 basis points.

Operating margin for the second quarter is expected in the range of 13.0% to 14.0% driven primarily by operating expense leverage. Gross margin is expected to be flat to up 20 basis points to last year, with average unit retail growth and favorable product mix partly offset by challenging compares over COVID-19-related mix benefits due to store closures from the prior year.

The full year Fiscal 2022 tax rate is now expected to be approximately 24%, assuming a continuation of current tax laws. Second quarter Fiscal 2022 tax rate is expected to be approximately 24% to 25%.

For earnings history and earnings-related data on Ralph Lauren (RL) click here.

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