Changes at Ralph Lauren come at cost investors are OK with

NEW YORK (AP) — Ralph Lauren swung to a first-quarter loss as it spends heavily to turn itself around, but the damage was not as bad as many had expected and its shares rose faster than any other Wednesday on the Standard & Poor’s 500.

Just months after taking over as CEO for founder Ralph Lauren late last year, Stefan Larsson initiated significant changes. He is the first person other than Lauren to hold the title.

In addition to slashing costs to right the company’s balance sheet, Larsson tightened its focus on the brands that made Ralph Lauren known worldwide.

While the company is shutting 10 percent of its stores, it is pushing the core brand aggressively, which has been prominent at some very high-profile events.

“One of those proud moments was our presence at Wimbledon earlier this summer and another was the Olympic ceremony this last Friday,” Larsson said in a conference call Wednesday. “Where we could see team U.S.A. walking to the stage and demonstrating the strength of American iconic style.”

The blazer worn by U.S. flag bearer Michael Phelps, who won his 20th and 21st gold medals in rapid succession Tuesday, was lit up with electroluminescent panels spelling U-S-A across his back.

The jacket made a huge splash.

Changes at Ralph Lauren, however, have come at a cost.

The New York company lost $22 million, or 27 cents per share, after reporting a profit in the same period a year earlier. Earnings, adjusted for restructuring costs, were $1.06 per share.

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Yet that was far better than the per-share earnings of 89 cents that Wall Street had been expecting, according to the analysts surveyed by Zacks Investment Research.

Revenue fell 4 percent to $1.55 billion, but that too edged out expectations.

The company also stuck by earlier revenue guidance and shares bolted 8.5 percent higher to $103.14. Still the stock is down 7.5 percent in the year to date.

The company expects fiscal 2017 restructuring charges of up to $400 million, along with an inventory charge of up to $150 million.

Could Ralph Lauren Corp Decline After Today’s Huge Increase?

The stock of Ralph Lauren Corp (NYSE:RL) is a huge mover today! The stock increased 8.49% or $8.07 during the last trading session, hitting $103.14. About 3.77 million shares traded hands or 287.17% up from the average. Ralph Lauren Corp (NYSE:RL) has declined 14.26% since January 5, 2016 and is downtrending. It has underperformed by 22.44% the S&P500. The move comes after 7 months positive chart setup for the $8.50B company. It was reported on Aug, 11 by Barchart.com. We have $156.77 PT which if reached, will make NYSE:RL worth $4.42B more.

Out of 14 analysts covering Ralph Lauren (NYSE:RL), 6 rate it a “Buy”, 0 “Sell”, while 8 “Hold”. This means 43% are positive. Ralph Lauren has been the topic of 26 analyst reports since September 24, 2015 according to StockzIntelligence Inc.

 

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According to Zacks Investment Research, “Ralph Lauren Corporation is engaged in designing, marketing, and distributing men’s, women’s and children’s apparel, accessories, fragrances, and home furnishings. Its operations include Wholesale, Retail and Licensing. It offers its products under the Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Women’s Collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Rugby, Ralph Lauren Childrenswear, American Living, Chaps, and Club Monaco brand names. Ralph Lauren Corporation, formerly known as Polo Ralph Lauren Corporation, is based in New York, New York.”

Ralph Luaren Mens Vest institutional sentiment increased to 1.14 in Q1 2016. Its up 0.21, from 0.93 in 2015Q4. The ratio increased, as 38 funds sold all Ralph Lauren Corp shares owned while 131 reduced positions. 64 funds bought stakes while 128 increased positions. They now own 52.04 million shares or 8.63% less from 56.95 million shares in 2015Q4.

Hs Management Partners Llc holds 3.05% of its portfolio in Ralph Lauren Corp for 794,730 shares. Zuckerman Investment Group Llc owns 92,925 shares or 2.4% of their US portfolio. Moreover, Euclidean Technologies Management Llc has 1.92% invested in the company for 19,621 shares. The Connecticut-based Argus Investors’ Counsel Inc. has invested 1.78% in the stock. Bristol John W & Co Inc Ny, a New York-based fund reported 592,277 shares.

Ralph Lauren Reports 1st Quarter Profit Above Expectations, Shares Jump 4%

Multi-billion dollar luxury clothing company Ralph Lauren Corporation on Wednesday announced earnings for the 1st quarter of fiscal year 2017 that topped analysts’ forecasts.

The luxury brand declared a loss of $22 million (27 cents per share) after a net income of $64 million (73 cents per share) for the same period of the previous year.

Adjusted earnings, which exclude impairment, restructuring and costs related to inventory, reached a total of $1.06 per share. It broke the 89 cents per share based on the estimates made by FactSet Research Systems. Company revenue slipped from $1.62 billion to $1.55 billion for the quarter.

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Same-store sales dropped six percent as the company predicts 2nd quarter revenue decreasing by middle to high single digits. Shares have decreased Ralph Luaren Mens Vest percent during the year whilst Standard & Poor’s 500 Index (SPX) rose 3.7 percent for the same period. Restructuring efforts are believed to have more impact for the 2nd half of the fiscal year compared to the 2nd quarter.

This positive performance for the quarter is credited to the turnaround program of Ralph Lauren Corporation’s chief executive officer Stefan Larsson.

The New York City-based Corporation said profit was $1.06 per share which did not include certain items during the period ending July 2nd. Analysts were looking at an average of 89 cents per share.

The results propelled an upbeat view that Ralph Lauren will be capable of revitalizing growth of earnings following two years of decreasing profits. The retail fashion company is getting rid of surplus inventory in department stores, shutting down shops and getting new executives as part of Mr. Larsson’s plan. It also eliminated some 1,000 job positions. The company will concentrate again on major brands Ralph Lauren, Lauren and Polo.

On the New York Stock Exchange (NYSE), Ralph Lauren shares increased 3.6 percent to $98.50 during early trading sessions.

Ralph Lauren, executive chairman gave the chief executive officer of the company his support as the company begins to implement its “Way Forward Plan.” “I am confident that we are capable of refocusing and transforming our core to get back the entrepreneurial spirit our company is famous for.”

According to Larsson, his plan is meant to breathe life into company’s core brand and become more in line with their customers.

Ralph Lauren Losing Battle for Preppies in America

The Olympic outfits were on full display during the opening ceremonies in Rio last week, but that does not mean Ralph Lauren’s superiority is not facing problems

The red, white and blue opening ceremony outfits worn by the U.S. when they walked into Maracana Stadium were nothing short of classic prep with huge Polo labels for the whole world to see.

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Ralph Lauren has built a multibillion-dollar empire and brand by becoming a deeply rooted American label. However, while the power of being prep continues, the brand lately has ceded some ground to newer competition that has put twists into the old prep look. Thus far, Ralph Lauren has failed in coping with those changes.

Now the clothing maker is Ralph Luaren Mens Swimwear to pull itself up from a current rough period. Sales fell 11% in North America during its most recently ended quarter. In June, during a presentation to analysts, CEO Stefan Larsson, who was hired away from Old Navy last year, outlined his plans for turning the company around.

He vowed Ralph Lauren would return to its roots by refocusing on its core items while slashing costs by up to $180 million.

Lauren, who is still the lead designer, conceded that the company’s management made some mistakes, as over the last three years, it has lost almost half its overall market value.

The fashion icon, who is 76, made it clear he was not happy about losing that much market value.

Preppiness, which is the stated uniform of wealth and class, was ruled for many years by a few old fashioned brand names. The look was defined by Ralph Lauren and the Brooks Brothers, while Lacoste brought it some sensibilities from Europe.

Although the preppy look may be long lasting for some, they eventually have come to realize the same old brands are not needed as some amount of staleness sets in.

Fashion upstarts start to gain ground as shoppers search for new alternatives. Smathers & Branson for example has won a niche in the prep market with its needlepoint belts and Southern Tide grew rapidly once it came onto the scene a decade ago and sold for over $85 million in early 2016.

Larsson is aware Ralph Lauren must regain relevance and said that by the spring of 2017 shoppers will be seeing the first results of the effort he is putting in to rework the proven and successful styles of the brand.

Can Ralph Lauren Corp (NYSE:RL) Continue to Deliver Results

[The Motley Fool] Ralph Lauren Corp (NYSE:RL) market eased lower on Wednesday, pulling away from the record highs it has set in recent days. Some market commentators blamed weakness in the oil market as a cause for the market’s pullback, but financial stocks also performed poorly as investors seemed ready for a pause after the big gains for the sector in recent weeks. Major market benchmarks held their losses to less than half a percent, however, and some stocks managed to post significant gains despite the downbeat mood. Among them were Ralph Lauren (NYSE:RL), Healthways (NASDAQ:HWAY), and Clean Energy Fuels (NASDAQ:CLNE).

Ralph Lauren makes profits fashionable again
Ralph Lauren jumped 8% after the upscale retailer gave investors more than they expected in its fiscal first-quarter financial report. Sales at Ralph Lauren fell 4% on a 6% slide in comparable-store sales, and the company noted that lower retail traffic hurt the company’s results. However, the company’s performance internationally was solid, and its restructuring efforts are already paying off in improved operating margin. Ralph Lauren is returning to its core brand roots, and its Polo brand in particular has gained exposure from major sporting events like the Rio Olympics and the Wimbledon tennis tournament. Guidance from the company suggests that further declines in sales are likely for the remainder of the fiscal year, but Ralph Lauren is taking steps to ensure its long-term survival and improve its chances for success down the Ralph Luaren Mens Swimwear.

Ralph Lauren Corp (NYSE:RL) stock is currently trading 24.92% below its 52-week-high, 25.55% above its 52-week-low. The 1-year stock price history is in the range of $82.15 – $137.38. Ralph Lauren Corp (RL) has a price to earnings ratio of 22.32 versus Consumer Goods sector average of 14.51. RL stock price has underperformed the S&P 500 by 14.6%. The Apparel Manufacturers company is currently valued at $8.55 billion, and its share price closed the last trading session at $103.14. The stock has a 50-day moving average of $95.29 and a 200-day moving average of $94.65.

Ralph Lauren Corp (RL) current short interest stands at 6.06 million shares. It has decreased by 14% from the same period of last month. Around 11% of the company’s shares, which are float, are short sold. With a 10-days average volume of 1.1 million shares, the number of days required to cover the short positions stand at 5.6 days.

RL is forecasted to report earnings per share of $0.89 and a revenue of $1.53 billion for the 1st Quarter of the fiscal year 2016. Ralph Lauren Corp (RL) declared last quarter earnings on August 10. The Apparel Manufacturers company announced last quarter earnings per share of $1.06 against a consensus Street estimate of $0.89, beating the average estimate by $0.17. The company posted a revenue of $1.55 billion compared to an estimation of $1.53 billion.