Premium fashion retailer Ralph Lauren Corporation (RL) delivered solid fiscal first-quarter 2022 results, backed by rapid store re-openings in North America and Europe. Shares jumped 6.1% on the news and closed at $125.22 on August 3.
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The company reported adjusted earnings of $2.29 per share, compared to an adjusted loss of $1.82 per share reported in the year-ago period. The Street estimated earnings of $0.86 per share.
What’s more, revenue for the quarter grew 182% year-over-year to $1.38 billion and beat analysts’ estimates of $1.21 billion.
Notably, compared to the prior-year period, the company’s total comparable-store sales grew 108%. (See Ralph Lauren stock charts on TipRanks)
During the quarter, RL completed the sale of Club Monaco to Regent. It is also on track to transition the Chaps brand to a licensed business model in Q2 FY22.
Pleased with the quarterly results, Patrice Louvet, President and CEO of the company, 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 Q2 FY22, the company forecasts constant currency revenue growth of 20%-22%, compared to the year-ago period.
Following the results, Guggenheim analyst Robert Drbul maintained a Hold rating on the stock and said, “While we are positive on RL’s inventory management, cost discipline, and digital growth, we believe the environment remains uncertain in part due to COVID-19, and we await a return to sustainable top-line growth in North America before potentially becoming more constructive with our views.”
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 9 Buys and 5 Holds. The average Ralph Lauren price target of $137.62 implies 9.8% upside potential to current levels. Shares have gained 87.8% over the past year.
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