Ralph Lauren rises after topping analyst consensus estimates

© Reuters.

By Sam Boughedda

In another demonstration that high-end fashion demand has yet to be dented by inflation, Ralph Lauren (NYSE:RL) reported earnings before the open, with profit and revenue topping consensus estimates.

The fashion brand reported fiscal second-quarter earnings of $2.23 per share, $0.16 better than the analyst estimate of $2.07, while revenue for the quarter came in at $1.6 billion versus the consensus estimate of $1.56B.

Ralph Lauren shares have rallied over 5% during Thursday's session.

"At our investor day in September, we outlined our next phase of growth for our company, our Next Great Chapter: Accelerate plan, focused on ongoing brand elevation, category expansion and scaling our key city ecosystems around the world," said Patrice Louvet, President and Chief Executive Officer. "Our multiple engines of growth helped drive solid second quarter results with outperformance on both the top- and bottom-line as we continue to navigate a highly dynamic global operating environment with agility and a relentless focus on building our brand momentum."

Despite soaring prices, luxury and high-end fashion demand have remained resilient throughout, with several companies mentioning resilient demand in recent weeks.

Ralph Lauren maintained its full-year fiscal 2023 outlook in constant currency with net revenue expected to increase in the high-single-digits and adjusted operating margin at the low end of the prior range of 14% to 14.5%.

Reacting to the earnings release, BMO Capital Markets analysts told investors, "RL reported a slight top-line beat (led by Asia, as N.A. missed and Europe in line), with GM slightly below, but better SGA helping to drive an EPS beat (aided slightly by tax)."

"Management updated FY (reiterated CC revenue and GM, but lowered EBIT margin) and introduced 3Q guidance, with reported sales below Street. 2Q represented another quarter with reported EBIT rate below pre-pandemic, which will be worth monitoring," added the analysts, who have a Market Perform rating and a $96 price target on Ralph Lauren.