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ralph lauren

Ralph Lauren tops fiscal Q1 2022 expectations

Premium American fashion retailer Ralph Lauren posted solid FY2021 second-quarter results.

Ralph Lauren Corporation (RL) posted a solid fiscal first quarter 2022 report, boosted by a fast pace of store reopenings in North America and Europe. After the report was posted shares jumped more than 6% and closed at $125.22 on August 3rd.

The retailer reported adjusted earnings of more than $2 per share, compared to a loss of $1.82 per share reported in the same period last year. The Street expected earnings of just $0.82 per share. Meanwhile, revenue for the quarter grew almost 200% from last year to $1.38B and beat all analyst estimates of $1.21B.

Also, when compared to the prior year period, RL posted a store sales growth of 108%

During this quarter, RL finalized the sale of Club Monaco to Regent. And it is also on the way to transition the Chaps brand to a licensed business model in the next quarter.

After the better-than-expected quarterly results, Patrice Louvet, CEO of Ralph Lauren said “Our timeless brand is resonating strongly with consumers around the world, and the breadth of our lifestyle portfolio is enabling us to deliver products that meet evolving consumer tastes and demand as we progressively emerge from the pandemic.”

For the second quarter of fiscal year 2022, RL expects constant currency revenue growth of 20% compared to the same quarter the year before.

After the results, Guggenheim analyst Robert Drbul assigned the stock a hold rating. According to the analyst, while he is positive on RL’s inventory management, cost discipline and digital growth, he believes the environment for the company remains uncertain in part due to the pandemic. The analyst is awaiting a return to sustainable growth in North America before becoming more constructive with his views.

The Street community is optimistic about the stock, giving it a Moderate Buy rating. The average RL price target of 137.62 implies a 9.8 upside potential to current prices. Shares have gained more than 80% over the last year.

How do you see the fashion industry going this year? Let us know in the comments. For more news on the investment and finance world browse FlexInvest Academy.

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