Ralph Lauren Shares Rally On Q1 Earnings Beat, Upbeat Outlook

Ralph Lauren Corp RL reported first-quarter FY22 revenue growth of 182% year-on-year, to $1.38 billion, beating the analyst consensus of $1.21 billion.
Revenues from North America increased 301% Y/Y to $662 million, Europe rose 194% to $355 million, and Asia grew 68% to $288 million.
Comparable store sales increased 108%.
Gross profit improved to $968 million, and gross margin was 70.3%. Adjusted gross margin contracted 200 basis points to 69.8% on a reported basis and down 260 basis points in constant currency.
Adjusted operating expenses were $729 million, up 39% Y/Y.
The operating margin was 16%, and operating income for the quarter was $220.6 million. Adjusted operating income was $231 million, and operating margin expanded 5,250 basis points to 16.8%.
Inventories rose 3.9% Y/Y to $803 million.
Net cash provided by operating activities for the quarter amounted to $247.6 million. The company held $2.6 billion in cash and equivalents as of June 26, 2021.
EPS of $2.29 beat the analyst consensus of $0.86.
"Against the backdrop of stronger than expected re-openings across North America and Europe, our teams delivered exceptional performance this quarter," said CEO Patrice Louvet.
Outlook: Ralph sees Q2 constant currency revenue growth of 20% - 22%, operating margin of 13.0%-14.0%, and gross margin to be flat to up 20 basis points.
For FY22, it sees constant currency revenue growth of 25% - 30% and an operating margin of 12.0%-12.5%. It sees gross margin increase 50-70 basis points (prior view of 40-60 basis point decline).
Price action: RL shares are trading higher by 9.43% at $129.12 on the last check Tuesday.
Photo by Jeannette Mijares from Pixabay

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