Ralph Lauren shares weighted by quarterly results

ANALYSIS_ Projected lower-than-expected revenue for the current quarter - three months through March 29th - cost Ralph Lauren a 6 percent intraday loss on the trading floor. Additionally, Roger Farah, the company’s executive vice-chairman, announced he will retire at the end of the

month.

The US retailer reported net profit for the fiscal fourth quarter ended March 29th that came in at 153 million dollars or 1.68 dollars per share. Although these figures were better than those of the comparable period's a year earlier, they still fell short of analysists' consensus estimate of 1.63 dollars a piece.

On a positive note, revenue jumped by 14 percent to 1.87 billion dollars thanks to the strength on the European and American markets while retail sales advanced 5 percent to 845 million dollars, albeit same-store sales marked a minor fall, while wholesale sales were up by 24 percent to 983 million dollars, noted the company.

Credit Suisse downgraded its recommendation on the stock to "neutral" from "outperform", saying that it lowered its rating for the designer apparel company due to concerns over Ralph Lauren's earnings growth.

"Accelerated SG&A [spending] will persist longer than we had previously expected, and margin expansion will be delayed into FY'16 or even FY'17, suggesting sub-10 percent earnings growth for three years-running," Credit Suisse said in a report.

Ralph Lauren shares fall notably after weaker than estimated result

Despite the strong results, Ralph Lauren shares fell by nearly 6 percent hours after the company broke them to the public, settling the day little over 2 percent lower as the company predicted worse-than-expected performance in the current quarter.

Ralph Lauren forecast that operating margins were expected to decline due to large investments in new brands, e-commerce operations and the expansion of its global store network. In the recent years, the company has focused on the opening of new stores and diversifying its brand and product portfolios, which in terms led to shifts in management.

Likewise, revenue is expected to grow between 6 percent and 8 percent to around 1.75 billion dollars in the three months through June 30th, trailing analysts’ forecasts of 1.8 billion dollars.

According to CNN Money, the 19 analysts offering 12-month price forecasts for Ralph Lauren Corp have a median target of 180.00 dollars, with a high estimate of 215.00 dollars and a low estimate of 162.00 dollars. The median estimate represents a +20.96 percent increase from the last price of 148.81 dollars.

Angela González Rodríguez