Why Ralph Lauren's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of fashionista Ralph Lauren (NYSE: RL  ) were bouncing around today, rising as much as 10% in early trading before watching that gain slim down to less than 4% as of this writing.

So what: It was Ralph Lauren's turn to report earnings today, and the results from the company's fiscal fourth quarter were pretty darn impressive. Sales for the quarter jumped 14% from last year to $1.6 billion, which was roughly in line with what Wall Street analysts were looking for. On the bottom line, a higher gross profit margin and a lower tax rate helped drive a 34% increase in earnings per share. The $0.99 in per-share earnings that the clothier reported was easily better than the $0.83 that analysts expected.

Now what: While the quarterly results helped drive investors to Ralph Lauren's shares, the company's outlook may have done a lot to moderate that excitement. The company's retail operations have been doing very well, but the wholesale business has been soft. For the full year, management sees "a low single-digit decline" in the wholesale division. In addition, the company is looking at Europe as a potential source of headwinds as the economic picture in that region continues to look grim.

Want to keep up to date on Ralph Lauren? Add it to your watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1892282, ~/Articles/ArticleHandler.aspx, 10/23/2016 4:11:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
RL $96.63 Down -0.96 -0.98%
Ralph Lauren Corp CAPS Rating: ***