Ralph Lauren (RL) 4Q16 Results: Beats Expectations, but Investor Day in June Looms Large

Executive Summary

• Ralph Lauren reported 4Q16 adjusted, diluted EPS of $0.88, beating the consensus estimate of $0.83 on stronger revenues and gross margins.
• Revenues were $1.87 billion, down 0.7% year over year but ahead of analysts’ expectations of a1.5% drop. Comps fell by 5% (excluding foreign exchange) and the EBIT margin contracted by 370 basis points; both results exceeded analysts’ expectations. Elevated levels of inventory raised some concerns during the company’s results call.
• The company will provide 1Q17 and FY17 guidance at its Investor Day on June 7.