=Ralph Lauren (RL) reported 4Q earnings on Thur 4 Feb 2016 (before open)

** charts before earnings **




** charts after earnings **

Ralph Lauren beats by $0.16, misses on revs; guides Q4 revs below consensus (lowers FY16 outlook) :

• Reports Q3 (Dec) earnings of $2.27 per share, excluding non-recurring items, $0.16 better than the Capital IQ Consensus of $2.11; revenues fell 4.3% year/year to $1.95 bln vs the $2.03 bln Capital IQ Consensus; -1% ex-FX.
  • This was below the guidance provided in November of 0-2% reported revenue growth. While international net revenue grew 6% in constant currency in the third quarter, North America revenue declined 4% primarily due to above-average temperatures for most of the Fall and Holiday period, a decline in foreign tourist traffic and product assortment challenges in the Lauren brand. The decline in reported net revenues included ~300 basis points of negative impact from FX.
• Co issues downside guidance for Q4, sees Q4 revs of flat to -2% to ~$1.85-1.95 bln vs. $1.96 bln Capital IQ Consensus. Operating margin for the fourth quarter of Fiscal 2016 is expected to be ~400-450 basis points below the comparable prior year period, primarily due to proactive action the Company is taking to clear end-of-season inventories related to the sales challenges the Company faced in the third quarter, as well as infrastructure investments and negative foreign exchange impacts.
• Co expects consolidated net revenues for Fiscal 2016 to be up ~1% in constant currency and down ~3% on a reported basis. This compares to previous guidance of flat on a reported basis and up 3-5% in constant currency. Adj. operating margin for Fiscal 2016 is now expected to be down 290-320 basis points (from down 180-230 bps).