Citigroup Reiterates Buy Rating, $180 PT on Ralph Lauren Corporation Ahead of Wednesday Fiscal Q3 Reports

In a report published Monday, Citigroup reiterated its Buy rating and $180.00 price target on Ralph Lauren Corporation RL. Citigroup noted, “Mgmt reduced Q3 revenue guidance in November to +2% - 3% (down from +MSD previously) over a difficult +16.6% comp last year. Top-line guidance includes 400-500bps of negative impact from strategic decisions (China store closures to reposition its distribution network, discont. of American Living, as well as unfavorable f/x). We are forecasting a -2.5% y/y decline in wholesale, +8-9% increase in retail (boosted by outlets & e-commerce), and +5% increase in licensing revenues. Though RL faces difficult y/y compares through the end of the year (+13.7% comp in Q4), we expect a return to +HSD growth in FY14, driven by DTC and category extensions.” Ralph Lauren Corporation closed on Friday at $161.54.