Ralph Lauren's Fashionable Finish To FY24: Sales Rise, Dividend Boosted, And New CFO On Board

Ralph Lauren Corp RL reported fourth-quarter FY24 sales growth of 2% year-on-year to $1.568 billion, marginally beating the analyst consensus estimate of $1.563 billion.

Foreign currency negatively impacted revenue growth by approximately 110 basis points in the fourth quarter. Global direct-to-consumer comparable store sales increased 6%.

Revenue in North America increased by 2% to $668 million, Europe increased by 2% to $469 million, and Asia grew by 1% to $394 million.

Gross profit was $1 billion, with a gross margin of 66.6%. Adjusted gross margin was also 66.6%, 480 basis points above the prior year.

Operating margin was 6.9%, and operating income for the quarter jumped 168% to $107.8 million. Adjusted operating margin was 8.7%, 380 basis points above the prior year.

The company held $1.67 billion in cash and equivalents as of March 30. Operating cash flow for the twelve months totaled $1.1 billion.

The Board of Directors declared a 10% increase in the regular quarterly cash dividend to $0.825, which will be paid on July 12 to shareholders of record on June 28.

Adjusted EPS of $1.71 beat the consensus estimate of $1.66.

The company has appointed Justin Picicci as Chief Financial Officer (CFO), effective immediately.

Outlook: Ralph Lauren expects FY25 revenues to increase low-single digits to last year on a constant currency basis, centering on about 2% to 3%.

The company expects FY25 operating margin to expand 100-120 basis points in constant currency, driven by gross margin expansion.

For the first quarter, the company expects revenues to be up slightly to last year on a constant currency basis. The company sees an operating margin expansion of 60 – 80 basis points in constant currency.

Ralph Lauren sees FY25 capital expenditures of $300 million to $325 million.

Price Action: RL shares are trading higher by 2.11% at $167.67 at the last check Thursday.

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