How Will Ralph Lauren Perform in Q4 And FY 2016?

-4.53%
Downside
183
Market
175
Trefis
RL: Ralph Lauren logo
RL
Ralph Lauren

Screen Shot 2016-05-13 at 5.13.51 pmScreen Shot 2016-05-10 at 3.10.47 pm

 

Key Trends In The Quarter:

1) Foreign Currency Headwinds

  • Ralph Lauren has been hit immensely by the strong Dollar.
  • The company now expects a 400 bps negative impact on its Fiscal 2016 results and 150 bps negative impact on its Q4 revenue growth.

2) Inventory Clearance And Lower Tourist Traffic

  • Ralph Lauren committed to taking proactive action to clear end of season inventories.
  • The fall and holiday season built-up inventory is to be cleared to start the spring selling holiday season in a strong position.
  • Lower foreign tourist traffic, particularly from China, will also have a negative impact on the results.

3) Financial Outlook Adjusted Downwards

  • During the Q3 2016 results presentation, the company revised its outlook downwards.
  • Growth in consolidated net revenues was reduced from flat on a reported basis to a decline of 3%, and from 3-5% growth in constant currency to 1%.
  • Due to negative foreign currency effects, the operating margin is expected to be lower by 290-320 bps, as compared to an earlier expected figure of a 180-230 bps decline.

Have more questions on Ralph Lauren? See the links below:

Relevant Articles
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  5. Ralph Lauren Stock To Trade Lower After FY Q4 Results?
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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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