Ralph Lauren Q4 Earnings Coming Up: Is Now the Right Time to Buy?

Core Viewpoint - Ralph Lauren Corporation is expected to report fourth-quarter fiscal 2025 results on May 22, with revenue estimates of $1.63 billion, reflecting a 4.1$1.96 per share, indicating a 14.6% increase from the previous year [1] Group 1: Financial Performance Expectations - The consensus estimate for revenues indicates a growth of 4.1% from the prior year's quarter [1] - The earnings consensus has increased by a penny in the last 30 days, suggesting positive sentiment [1] - In the last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate by 7.6%, with a trailing four-quarter earnings surprise averaging 6.5% [2] Group 2: Factors Influencing Performance - Ralph Lauren's performance is likely to benefit from a strong brand presence, diverse product portfolio, and expanding e-commerce capabilities [2] - The company added 1.9 million consumers to its direct-to-consumer business in the preceding quarter, indicating effective customer acquisition strategies [3] - Management anticipates revenue growth of nearly 6-7% on a constant currency (cc) basis for the fiscal fourth quarter, with operating margin expected to expand by 120-140 basis points [4] Group 3: Currency Impact - The company faces challenges from international exposure, particularly due to fluctuating foreign exchange rates, with the stronger U.S. dollar expected to reduce revenues by approximately 100 to 150 basis points for fiscal 2025 [6][7] - In the fourth quarter, foreign exchange is projected to cut revenues by about 300 basis points, impacting both top-line and margin performance [7] Group 4: Valuation and Market Performance - Ralph Lauren's stock is trading at a premium valuation of 19.56X on a forward 12-month basis, compared to the industry average of 12.67X [9] - The stock has risen 29.1% in the past six months, contrasting with a 3.8% decline in the industry [9] Group 5: Earnings Prediction - The model predicts a likely earnings beat for Ralph Lauren, supported by a positive Earnings ESP of +2.72% and a Zacks Rank of 3 [8]