Ralph Lauren Has 'Right Strategies In Place' For Growth, Says Analyst - Ralph Lauren (NYSE:RL)

Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on the shares of Ralph Lauren Corp RL with a price target of $140.00.
The company reported 3Q23 EPS of $3.35 (vs. $2.94 last year), above the consensus of $2.92.
The upside was driven by better-than-expected topline growth and expense leverage, while gross margin was roughly in-line, said the analyst.
On the topline, RL continues to expect high-single-digit constant currency revenue growth YoY on a 52-week comparable basis.
Considering global macro challenges during the quarter (China COVID disruptions, weak wholesale channel reorder trends, FX headwinds), RL’s earnings beat is impressive, according to the analyst, with positive reported revenue growth in each geographic region.
International remains a standout, with revenue growth and operating margin expansion in both Europe and Asia despite consumer concerns in those markets, said the analyst.
The success of the brand elevation strategy remains evident in ongoing AUR growth (up 10% in DTC on top of 19% growth last year) as the company continues to attract younger, high-value new customers, added the analyst.
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While the fourth quarter operating margin outlook is slightly below consensus as the company continues to invest in growth, the topline outlook for the period is slightly better than expected, the analyst remarked.
Despite ongoing macro challenges, the analyst believes that RL has the right strategies to deliver accelerated topline growth off a stronger foundation while driving expense leverage and expanding operating margins.
Price Action: RL shares are trading higher by 1.44% at $118.76 on the last check Thursday.

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