Ralph Lauren (RL) Surpasses Q2 Earnings & Sales Estimates

Ralph Lauren Corporation RL, a designer, marketer and distributor of lifestyle products, released second-quarter fiscal 2018 results, wherein adjusted earnings of $1.99 came ahead of the Zacks Consensus Estimate of $1.90, and climbed 4.7% from $1.90 earned in the year-ago quarter.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2018 has increased by a penny in the last 30 days. Moreover, Ralph Lauren’s performance over the trailing four quarters, excluding the quarter under review, remains encouraging with an average beat of 13.4%.

Revenues: Ralph Lauren’s net revenues dropped 8.6% to $1,664.2 million but surpassed the Zacks Consensus Estimate of $1,653.7 million. On a currency neutral basis, revenues fell 9%. Revenue decline was attributable to the exit of brand, promotional activity and soft consumer demand.

Outlook: The company continues to project currency neutral net revenues to decline 8–9% in fiscal 2018. For third-quarter fiscal 2018, management envisions currency neutral net revenue to decrease 6-8%. Foreign currency is estimated to favorably impact the top line growth by nearly 160-170 basis points in the second quarter. Further, the company adopted Accounting Standard Update (ASU) 2016-09 in the first quarter of fiscal 2018, which is likely to have an impact on its effective tax rate, among other things.

Zacks Rank: Currently, Ralph Lauren carries a Zacks Rank #2 (Buy), which is subject to change following the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stock Movement: Ralph Lauren’s shares are down nearly 1.1% during pre-market trading hours following the earnings release.

Check back later for our full write up on Ralph Lauren’s earnings report!

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