Ralph Lauren Q4 And FY 2016 Earnings And Revenue Beat Expectations
Key Trends Highlighted:
1) Decline In Wholesale Revenues
- Wholesale revenues fell in Q4 and FY 2016 as a result of a decline in North America, where business trends have been challenging.
- Ralph Lauren is refining its product assortments and deliveries for FY 2017 to improve the declining trends.
- Operating margins were negatively impacted by measures taken to clear end of season inventories and foreign currency effects.
2) Improvement In The Retail Performance
- Retail segment sales increased 7% in Q4 in constant currency, aided by a 53rd week of sales, new store expansions, and e-commerce growth.
- Comparable store sales fell 5% in constant currency and sales to foreign tourists were down ~25% y-o-y in Q4, while international revenues were up.
- E-commerce revenue was up mid-single digits in Q4.
- The move to a new e-commerce platform later in the fiscal year will improve functionality of the site, improve customer engagement and satisfaction.
- Operating margins were impacted by end of season inventory clearance and foreign currency effects.
3) Restructuring Activities To Deliver Substantial Savings
- ~$125M of annual cost savings to be generated from the FY 2016 Global Reorganization Plan.
- This is higher than the $110 million expected earlier, driven by additional restructuring activities identified by the company.
- Activities undertaken include remodeling stores, reducing product count to keep inventory low, and improving the supply chain management.
- More information regarding the Plan to be provided at their Investor Day on June 7.
Have more questions on Ralph Lauren? See the links below:
- Why Have Ralph Lauren’s Licensing Revenues Been Declining In Recent Years?
- How Have The Number Of Ralph Lauren Stores Operated By The Company Changed Over The Past Five Years?
- Why Is The Online Market Place The Next Big Thing For Ralph Lauren?
- How Has Ralph Lauren Performed In Comparison To Its Peers?
- How Has Ralph Lauren’s Sales Breakdown According To Geographic Locations Changed Over The Past Five Years?
- How Will Ralph Lauren’s Retail Division Perform In The Next Five Years?
- How Did Just The Month Of February Make Ralph Lauren One Of The Worst Performing Companies, Amongst Its Peers?
- Why Did We Revise Our Price Estimate Of Ralph Lauren To $102?
- How Will Ralph Lauren’s Revenue And EBITDA Composition Change In The Next 3 Years?
- How Has Ralph Lauren’s Revenue And EBITDA Composition Changed In The Last 5 Years?
- By What Percentage Did Ralph Lauren’s Revenue & EBITDA Grow In The Last 5 Years?
- What Is Ralph Lauren’s Fundamental Value Based On Expected 2016 Results?
- What Is Ralph Lauren’s Revenue And EBITDA Breakdown?
- Ralph Lauren: Year 2015 In Review
- What To Expect From Ralph Lauren’s Fiscal Q2 After Stock Up 9% This Year?
- What’s Next For Ralph Lauren Stock?
- Will Ralph Lauren Stock Trade Lower Post Fiscal Q3?
- Ralph Lauren Q2 Preview: What Are We Watching?
- Ralph Lauren Stock To Trade Lower After FY Q4 Results?
- Ralph Lauren Stock Slumped 14% In Last Ten Days, What’s Next?
Notes:
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
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