Elevated Offering Propels Ralph Lauren's Momentum Despite Macro Challenges: Analyst

Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on the shares of Ralph Lauren Corp RL with a price target of $140.
RL reported 4QF23 EPS of $0.90, above the consensus. Its reported sales increased 1.2% to $1.541 billion, ahead of the consensus.
The analyst said that the upside was driven by better-than-expected topline growth and expense leverage.
Asia was a particular strength, and ongoing AUR growth continues to show the success of the company’s efforts to elevate the offering and attract high-value new customers.
Operating expenses, the analyst added, leveraged an impressive 280 basis points to 57.0%, better than the consensus.
Following a strong fourth-quarter beat, the FY24 guidance is slightly ahead of expectations, while first-quarter sales guide is a bit light on wholesale shifts as the supply chain normalizes, commented the analyst.
In the analyst’s view, RL’s recent string of results demonstrates that key opportunities continue to gain traction, both by category and by region, emphasizing the broad appeal of the brand and its potential.
The analyst concluded that despite ongoing macro challenges, the analyst believes that the company has the right strategies in place to deliver accelerated topline growth off a stronger foundation while generating expense leverage and expanding operating margins.
Price Action: RL shares are trading higher by 5.00% at $113.64 on the last check Thursday.

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