Ralph Lauren Corp Earnings Cheat Sheet: Strong Revenue Helps Net Income

S&P 500 (NYSE:SPY) component Ralph Lauren Corporation (NYSE:RL) reported net income above Wall Street’s expectations for the second quarter. Polo Ralph Lauren designs and sells premium lifestyle products, including apparel, accessories, fragrances and home furnishings.

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Ralph Lauren Earnings Cheat Sheet for the Second Quarter

Results: Net income for the clothing company rose to $233 million ($2.46 per share) vs. $205.2 million ($2.09 per share) in the same quarter a year earlier. This marks a rise of 13.5% from the year earlier quarter.

Revenue: Rose 24% to $1.9 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: RL beat the mean analyst estimate of $2.24 per share. It beat the average revenue estimate of $1.84 billion.

Quoting Management: “Our momentum in the first half of the year demonstrates the incredible vitality of our brand and the growing desirability of our products around the world,” said Ralph Lauren, Chairman and Chief Executive Officer. “The progress we are making with our international development and the acceptance of our vibrant accessories merchandise confirms that we are paving important new avenues of growth. At the same time, demand for our products in more developed markets has been very strong. Customers around the world understand that Ralph Lauren stands for the highest quality products that withstand the test of time, and this is reflected in our strong performance over the last six months.”

Key Stats:

Gross margin shrank 1.4 percentage points to 56.5%. The contraction appeared to be driven by increased costs, which rose 28.2% from the year earlier quarter while revenue rose 24%.

Revenue has risen the past four quarters. Revenue increased 32.4% to $1.53 billion in the first quarter. The figure rose 6.7% in the fourth quarter of the last fiscal year from the year earlier and climbed 24.4% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of $1.90 versus a mean estimate of net income of $1.45 per share.

The company has now seen net income rise in two straight quarters. In the first quarter, net income rose 52.4% from the year earlier.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from $1.75 a share to $1.78 over the last ninety days. For the fiscal year, the average estimate has moved up from $6.36 a share to $6.84 over the last ninety days.

Competitors to Watch: Liz Claiborne, Inc. (NYSE:LIZ), The Warnaco Group, Inc. (NYSE:WRC), Maidenform Brands, Inc. (NYSE:MFB), Jones Apparel Group, Inc. (NYSE:JNY), Nordstrom (NYSE:JWN), Guess?, Inc. (NYSE:GES), Coach, Inc. (NYSE:COH),  Phillips-Van Heusen Corp. (NYSE:PVH), V.F. Corporation (NYSE:VFC). Frederick’s of Hollywood Group Inc. (AMEX:FOH), Vera Bradley, Inc. (NASDAQ:VRA), Tiffany & Co. (NYSE:TIF), Fossil, Inc. (NASDAQ:FOSL), Piquadro S.p.A. (NYSE:PQ), Wet Seal (NASDAQ:WTSLA), Abercrombie & Fitch (NYSE:ANF), Gap (NYSE:GPS), Express (NYSE:EXPR), Urban Outfitters (NASDAQ:URBN) and Limited Brands (NYSE:LTD)

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)