Yahoo Finance Ralph Lauren Beat Earnings Estimates but Missed on Revenue
Why 4Q15 Results Disappointed Ralph Lauren Investors
3Q16 earnings
Ralph Lauren (RL) released its earnings for fiscal 3Q16. Its adjusted EPS (earnings per share) came in around $2.27, which was a decline when compared to $2.41 in 3Q15. The company did manage to exceed the pessimistic consensus market estimate of $2.13. The company’s revenue fell by 1.0% on a constant currency basis and 4.0% on a reported basis to $1.9 billion, which was 4.0% lower than the consensus.
What caused revenue to dip?
Ralph Lauren (RL) has been struggling to generate top-line growth due to micro and macroeconomic factors. In the last 12 months, the revenues of the company fell by 2.4%. The wholesale and retail segment have been affected by the decline in organic growth and a similar trend was seen in 3Q16 where the wholesale sales fell by 3.0% on a constant currency basis in North America and comparable sales in the retail segment fell by 5.0% on a constant currency basis.
The revenues in 3Q16 were below expectations mainly because of an overall decline in traffic, not up-to-the-mark product assortments, and a warmer-than-usual winter, which had an impact on the winter wears sales. Ralph Lauren’s (RL) peers like Michael Kors (KORS) and Hanesbrands (HBI) have been able to pull off decent results in the current difficult economic scenario for the apparel and accessories industry (XLY) while some of its other peers in the industry like VF (VFC) and Kate Spade & Co. (KATE) are yet to declare their quarterly earnings.
In the next article, we will have a look at how the company’s stock is performing.
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