Shares of Ralph Lauren (RL 1.39%) rose 16.8% on Thursday after the fashion and apparel company announced strong quarterly results.
NYSE: RL
Key Data Points
Ralph Lauren had a fantastic holiday season
For its fiscal third-quarter 2024 (ended Dec. 30, 2023), Ralph Lauren's quarterly revenue grew 6% year over year (5% at constant currency) to $1.934 billion. That translated to a 24% increase in adjusted (non-GAAP, or generally accepted accounting principles) net income to $275 million, or $4.17 per share. Analysts, on average, were only expecting earnings of $3.54 per share on revenue of $1.87 billion.
Ralph Lauren CEO Patrice Louvet called it "a strong holiday," noting that results exceeded expectations, with particular outperformance in the company's direct-to-consumer business (where comparable-store sales grew 9%). Ralph Lauren also saw better-than-expected performance in all regions, led by 16% constant-currency growth in Asia.
What's next for Ralph Lauren stock?
Looking ahead to the full fiscal year 2024, Ralph Lauren reiterated guidance for revenue growth in the low-single-digit range -- albeit now "centering around 2%" growth versus a range of 1% to 2% previously. The company also reiterated guidance for operating margin to expand 30 to 50 basis points year over year to a range of 12.3% to 12.5%.
All told, this was a modest beat and raise highlighting Ralph Lauren's relative outperformance in the crucial holiday season -- and despite continued macroeconomic uncertainty and higher inflation that has plagued many other fashion and apparel names in recent quarters. Coupled with steady margin expansion and a healthy dividend yielding around 1.75% annually at today's prices, it's hardly surprising to see Ralph Lauren stock popping in response today.
