Ralph Lauren Corporation reported net income of 216 million dollars or earnings per diluted share of 3.20 dollars on a reported basis and 226 million dollars adjusted net income or 3.35 dollars on an adjusted basis for the third quarter of fiscal 2023 compared to 2.93 dollars on a reported basis and 2.94 dollars on an adjusted basis for the same quarter last year.
Revenue for the quarter increased by 1 percent to 1.8 billion dollars on a reported basis and was up 7 percent in constant currency. According to Reuters report, analysts expected 1.76 billion dollars, based on Refinitiv IBES data.
"Our iconic lifestyle brand endures through both good and tough times because it stands for more than any single product or category," said Ralph Lauren, executive chairman and chief creative officer.
"Our core consumer remains resilient and our iconic products are resonating around the world — evidenced by our strong third quarter and year-to-date performance," said Patrice Louvet, the company’s president and chief executive officer in a statement.
Revenue performance of Ralph Lauren’s reportable segments
The company’s North America revenue in the third quarter increased 1 percent to 938 million dollars. In retail, comparable store sales in North America were up 2 percent, with a 9 percent increase in digital commerce partly offset by a 1 percent decrease in brick and mortar stores. The company’s revenue in the North America wholesale channel decreased 2 percent driven by a roughly 300 basis point headwind from a receipt delay, as expected.
Europe revenue increased 1 percent to 469 million dollars on a reported basis and 13 percent in constant currency. In retail, comparable store sales in Europe were up 11 percent, with an 11 percent increase in brick and mortar stores and a 12 percent increase in digital commerce. Europe wholesale revenue decreased 1 percent on a reported basis and increased 11 percent in constant currency.
Asia revenue increased 1 percent to 386 million dollars on a reported basis and 16 percent in constant currency. Comparable store sales in Asia increased 8 percent, with a 7 percent increase in our brick and mortar stores and a 21 percent increase in digital commerce.
Gross profit was 1.2 billion dollars and gross margin was 65 percent, while adjusted gross margin was 65.2 percent, 80 basis points below the prior year on a reported basis but up 80 basis points in constant currency.
Ralph Lauren expects FY23 revenue growth of about 8 percent
For fiscal 2023, the company continues to expect constant currency revenues to increase approximately high-single digits to last year, or about 8 percent, on a 52-week comparable basis.
On a 53-week comparable basis, revenue growth is still expected to be negatively impacted by approximately 100 basis points due to the absence of the 53rd week compared to the prior year.
The company expects operating margin in the range of 13.5 percent to 14 percent in constant currency, slightly below the previous outlook of approximately 14 percent on moderate gross margin expectations.