How Did Just The Month Of February Make Ralph Lauren One Of The Worst Performing Companies, Amongst Its Peers?

-6.95%
Downside
188
Market
175
Trefis
RL: Ralph Lauren logo
RL
Ralph Lauren

Ralph Lauren’s continuous underperformance has had an effect on its stock price in the last 12 months, where it has fallen 33%. Besides Kate Spade, no other company in its peer group has performed as badly. This fall is primarily attributable to the decline in the month of February, after the Q3 results were declared. While announcing the massive 39% year-on-year decline in earnings, on a reported basis, and a sales decline to $1.9 billion from $2 billion, the company also lowered its fiscal 2016 guidance to a 3% revenue decline, from an earlier estimation of flat sales. This is primarily due to foreign currency translations, which are expected to have an approximate 400 basis points negative impact on the revenue growth. The poor results have forced the company to conduct a review of the entire company, in terms of pricing and distribution, including its business with department stores. One solution identified is better inventory management, in order to prevent goods from piling up on shelves and being marked down.

RL-SP 1 RL-SP 2

Relevant Articles
  1. What To Expect From Ralph Lauren’s Fiscal Q2 After Stock Up 9% This Year?
  2. What’s Next For Ralph Lauren Stock?
  3. Will Ralph Lauren Stock Trade Lower Post Fiscal Q3?
  4. Ralph Lauren Q2 Preview: What Are We Watching?
  5. Ralph Lauren Stock To Trade Lower After FY Q4 Results?
  6. Ralph Lauren Stock Slumped 14% In Last Ten Days, What’s Next?

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ralph Lauren.
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