Shares of Ralph Lauren (RL 16.79%) rose 16.8% on Thursday after the fashion and apparel company announced strong quarterly results.
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.
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
