Ralph Lauren Gains On Q2 Earnings Beat

Ralph Lauren Corp RL reported second-quarter FY23 sales growth of 5% year-on-year to $1.58 billion, beating the consensus of $1.56 billion.
Revenue in North America increased 3% to $727 million, Europe remained flat at $494 million, and Asia grew 17% to $316 million.
The gross profit climbed 0.8% to $1 billion with a gross margin of 64.8%. Adjusted gross margin was 64.6%, 270 basis points below the prior year on a reported basis, and down 80 basis points in constant currency.
Operating margin was 13.1%, and operating income for the quarter declined 17.9% to $206.7 million. Adjusted operating margin was 13.4%, 370 basis points below the prior year.
The company held $1.4 billion in cash and equivalents as of October 1, 2022. Cash provided by operating activities for six months totaled $1.9 million.
Inventory at the end of the quarter rose 36% to $1.3 billion.
Adjusted EPS of $2.18 beat the analyst consensus of $2.08.
Outlook: Ralph Lauren continues to expect FY23 constant currency revenues to increase approximately high-single digits to last year, or about 8%, on a 52-week comparable basis.
On a 53-week comparable basis, it expects FY23 revenue growth to be negatively impacted by approximately 100 basis points due to the absence of the 53rd week compared to the prior year.
For Q3, the company expects revenue to increase low- to mid-single digits in constant currency to last year.
Price Action: RL shares are trading higher by 5.21% at $94.94 on the last check Thursday.
Photo Via Wikimedia Commons

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