What Happened?
Shares of fashion brand Ralph Lauren (NYSE: RL) jumped 15.9% in the morning session after the company reported strong fourth-quarter results, which blew past analysts' constant currency revenue expectations, reflecting better-than-expected holiday performance across all geographies. Looking ahead, its revenue guidance for 2025 of 6-7% growth is quite healthy. Overall, we think this was a decent quarter with some key metrics above expectations.
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What The Market Is Telling Us
Ralph Lauren’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Ralph Lauren and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 17% on the news that the company reported third-quarter results that blew past analysts' revenue and EPS expectations, driven by strong outperformance in its Europe ($522 million of revenue vs estimates of $471 million) and Asia ($446 million of revenue vs estimates of $428 million) segments. The company also beat Wall Street's same-store sales estimates, posting 9% growth (vs the forecasted 4.3% growth). Ralph Lauren repurchased approximately $103 million of its shares this quarter and guided to roughly 2% constant currency revenue growth for the full year 2024, and based on current exchange rates, it expects a modest benefit on overall revenue growth (a reversal from its 2-year trend). Overall, this was a really good quarter that should please shareholders.
Ralph Lauren is up 20.8% since the beginning of the year, and at $279.86 per share, has set a new 52-week high. Investors who bought $1,000 worth of Ralph Lauren’s shares 5 years ago would now be looking at an investment worth $2,303.
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