Ralph Lauren Breezes Past Q3 Estimates as AUR Jumps 18%

Core Viewpoint - Ralph Lauren Corp. has exceeded fiscal third-quarter earnings expectations and raised its outlook for the year, although investor expectations remain high, leading to a slight decline in share price [2][5]. Financial Performance - Net income increased by 21.6% to $361.6 million, with adjusted earnings per share rising to $6.22, surpassing analysts' projections of $5.81 by 42 cents [3]. - Adjusted operating margins improved by 220 basis points to 20.9% of sales, while net sales rose by 12% to $2.4 billion, reflecting a 10% gain in constant currencies [3]. Strategic Outlook - The company is focused on long-term growth rather than short-term results, with CEO Patrice Louvet emphasizing a broad strategy that is yielding positive performance across various markets, brands, and demographics [4][5]. - Louvet expressed confidence in the company's plan, highlighting the consistent performance across different product categories and regions [5]. Market Reaction - Despite strong quarterly results, shares of Ralph Lauren fell by 4.5% to $338.66, attributed to high investor expectations and some concerns regarding direct-to-consumer pricing and revenue growth [5][6]. - Analyst Tom Nikic from Needham & Co. suggested that investors consider buying the dip, noting the potential for another strong quarter ahead [6].