Ralph Lauren sees margin growth but weak revenues in Q1, appoints new CFO

Luxury fashion house Ralph Lauren Corp. (RL), while reporting higher fourth-quarter results, on Thursday issued first-quarter outlook, expecting increased margin but weak revenues. The company also issued fiscal 2025 forecast, and announced higher dividend.

Separately, Ralph Lauren announced the appointment of Justin Picicci as Chief Financial Officer, effective May 23.

In pre-market activity on the NYSE, Ralph Lauren shares were losing around 4.9 percent to trade at $156.13.

The newly appointed CFO Picicci succeeds Jane Nielsen, who has served as CFO and Chief Operating Officer since 2019. Nielsen will remain the Company's COO, continuing to lead key operational and strategy functions through March 2025.

Picicci holds 18-year track record at Ralph Lauren, most recently serving as Enterprise Chief Financial Officer.

Ralph Lauren also announced that its Board of Directors declared a 10 percent increase in the regular quarterly cash dividend of $0.825 per share for a total annual dividend amount of $3.30 per share. The next quarterly dividend will be paid on July 12, to shareholders of record at the close of business on June 28.

Revenue growth anticipated for FY25

Looking ahead for the first quarter, the company expects operating margin to expand approximately 60 to 80 basis points in constant currency, and gross margin to expand around 140 to 180 basis points.

The company expects revenues to be down slightly to prior year on a reported basis due to negative foreign currency impact, but up slightly to last year on a constant currency basis.

For fiscal 2025, the company expects operating margin to expand approximately 100 to 120 basis points, and gross margin to increase about 50 to 100 basis points, both in constant currency.

Annual revenues are expected to increase low-single digits to last year on a constant currency basis, centering on about 2 percent to 3 percent. Based on current exchange rates, foreign currency is expected to negatively impact revenue growth by approximately 90 basis points in fiscal 2025.

In its fourth quarter, the company's earnings increased from last year and beat the Street estimates.

The company's bottom line came in at $90.7 million or $1.38 per share, compared to $32.3 million or $0.48 per share last year.

Adjusted earnings were $111.8 million or $1.71 per share for the period, compared to last year's $61 million or $0.90 per share. Analysts on average had expected the company to earn $1.66 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

The company's revenue for the quarter rose 1.9 percent to $1.57 billion from $1.54 billion last year.(DPA)