Ralph Lauren’s Profit Beat Forecasts

Published on: 02 Nov, 2017

On Thursday, Ralph Lauren (NYSE: RL) reported quarterly revenue and profit that beat Wall Street predictions following sales of their high end clothing at full price as well as keeping a close eye on costs which brought shares up more than 5%. The company has been keeping up with their two-year turnaround plan as revenue and margins have been increasing, leading to their increase in stock at 5.4% at $94.28.

As fast fashion apparel brands and extreme decline in traffic to malls and stores shift to online shopping and pushed established name brands to the side, Ralph Lauren has been struggling to compete in the retail sector while also hurt by allowing department stores and off price retailers such as T-J Maxx to discount items. Following this, the company came up with a two-year cost cutting plan that cut jobs, pulled back inventory from department stores and outlets, and streamlined their management layers.

Ralph Lauren reported a rise in adjusted gross margins of 3% and a 5% increase in revenue per unit sold from last year. Profit beat Wall Street predictions as well at $1.89 by 10 cents. 2018 operating margin forecasts were also raised by 9.5% to 10.5% from the previous estimate of 9% to 10.5%.

“We are focused on creating value for all of our stakeholders by continuing to drive productivity and re-igniting quality growth,” said Patrice Louvet, President and Chief Executive Officer. "While there is a lot of work to be done, I am encouraged by the early progress we are making across multiple fronts to strengthen our brand and better connect with consumers.”

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Ariana Cheong

Email: ariana@financialinsiders.com

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