Ralph Lauren Corp. (RL), the prestigious luxury fashion house, reported stronger fourth-quarter results and shared its outlook for the first quarter, anticipating improved margins but weaker revenues. Additionally, the company provided its fiscal 2025 forecast and announced an increase in its dividend.
Separately, Ralph Lauren has appointed Justin Picicci as Chief Financial Officer, effective May 23. Pre-market activity on the NYSE saw Ralph Lauren shares decline by approximately 4.9 percent, trading at $156.13.
Picicci will take over from Jane Nielsen, who has been serving as CFO and Chief Operating Officer since 2019. Nielsen will continue in her role as COO, overseeing key operational and strategic functions until March 2025. Picicci brings 18 years of experience at Ralph Lauren, most recently serving as Enterprise Chief Financial Officer.
The Board of Directors has declared a 10 percent increase in the regular quarterly cash dividend to $0.825 per share, bringing the total annual dividend to $3.30 per share. The next quarterly dividend is scheduled for payment on July 12 to shareholders of record as of June 28.
Looking forward to the first quarter, Ralph Lauren projects an operating margin increase of approximately 60 to 80 basis points, and gross margin growth of around 140 to 180 basis points, both on a constant currency basis. However, the company expects a slight decline in revenues on a reported basis due to negative foreign currency impact but a slight increase on a constant currency basis compared to the previous year.
For fiscal 2025, Ralph Lauren anticipates an operating margin expansion of about 100 to 120 basis points and gross margin growth of approximately 50 to 100 basis points, again in constant currency terms. Annual revenues are expected to rise in the low single digits year-over-year on a constant currency basis, estimated to be around 2 to 3 percent. Current exchange rates are projected to negatively impact revenue growth by about 90 basis points.
In the fourth quarter, Ralph Lauren's earnings increased year-over-year, surpassing analysts' expectations. The company's net income was $90.7 million, or $1.38 per share, compared to $32.3 million, or $0.48 per share, in the previous year. Adjusted earnings amounted to $111.8 million, or $1.71 per share, up from $61 million, or $0.90 per share, last year. Analysts had been expecting earnings of $1.66 per share, as per Thomson Reuters. Analysts' estimates generally exclude special items.
For the quarter, Ralph Lauren reported a revenue increase of 1.9 percent, reaching $1.57 billion compared to $1.54 billion in the prior year.
