On November 8, 2023, Ralph Lauren Corp (RL, Financial) reported its second-quarter fiscal 2024 results, which showcased revenue growth and margin expansion, surpassing expectations despite a challenging macroeconomic environment. The company's revenue increased by 3% on a reported basis and 2% in constant currency, led by continued momentum in Asia and robust direct-to-consumer sales.
Financial Highlights
Ralph Lauren Corp (RL, Financial) delivered a solid performance in the second quarter, with revenue reaching $1.6 billion. The company saw a 6% growth in global direct-to-consumer comparable store sales, driven by a 10% increase in average unit retail (AUR) growth. Gross and operating margins exceeded the company's outlook, reflecting brand elevation and disciplined expense management. The company's net income for the quarter was $147 million, translating to an earnings per share (EPS) of $2.19 on a reported basis and $2.10 on an adjusted basis, compared to $2.18 and $2.23, respectively, in the same quarter of the previous fiscal year.
Operational and Segment Performance
By region, Asia led the performance with a 10% reported revenue increase and 13% in constant currency. Europe's revenue grew 7% on a reported basis but was flat in constant currency. North America experienced a 1% decline, which was an improvement from previous quarters. The company managed its inventory effectively, ending the quarter with inventories down 5% compared to the prior year.
Strategic Initiatives and Outlook
Ralph Lauren Corp (RL, Financial) continues to focus on strategic investments, including marketing and digital initiatives, to drive long-term growth. The company reiterated its full-year fiscal 2024 outlook, expecting low-single-digit revenue growth around 1% to 2% and adjusted operating margin expansion in constant currency.
Balance Sheet Strength
The company ended the quarter with a strong balance sheet, having $1.5 billion in cash and short-term investments and $1.1 billion in total debt. Ralph Lauren Corp (RL, Financial) also returned approximately $275 million to shareholders through dividends and repurchase of Class A common stock in the fiscal year-to-date.
Management Commentary
"We inspire people to embrace their sense of individual style through a timeless, elegant way of living," said Ralph Lauren, Executive Chairman and Chief Creative Officer. "Our teams delivered solid second quarter performance ahead of our commitments with stronger top-line growth across all regions, supported by our iconic brand, pricing power and continued strategic investments," added Patrice Louvet, President and Chief Executive Officer.
Investor and Analyst Information
Ralph Lauren Corp (RL, Financial) will host a conference call and live online webcast to discuss the earnings report and outlook. Interested parties can access the call through the company's investor relations website or by dialing in directly.
This earnings summary provides a snapshot of Ralph Lauren Corp (RL, Financial)'s financial performance and strategic direction. For more detailed information, investors and analysts are encouraged to review the full earnings release and financial statements.
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Explore the complete 8-K earnings release (here) from Ralph Lauren Corp for further details.
