Factors Likely to Influence Ralph Lauren (RL) in Q2 Earnings

Ralph Lauren Corporation RL is likely to register top- and bottom-line declines when it reports second-quarter fiscal 2021 numbers on Oct 29, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $1,150 million, which indicates decline of 32.6% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for the bottom line is pegged at 77 cents per share, which suggests a decline of 69.8% from the year-ago quarter’s figure. The consensus estimate went up by 7 cents in the past 30 days. The apparel and lifestyle products company’s bottom line missed the Zacks Consensus Estimate by 18.9%, in the last reported quarter.

Aspects That May Impact Q2 Metrics

The COVID-19 pandemic has caused disruptions in Ralph Lauren’s supply operations. This is likely to have dented revenues across regions like North America, Europe and Asia, during the second quarter. Moreover, the company’s brick-and-mortar stores, in most regions, have continued to remain sluggish. In its last earnings call, management highlighted that pandemic- led adversities are likely to continue in the second quarter.

Also, any adverse movement in currency exchange rates as well as rise in operating expenses is likely to have been a headwind during the quarter under review.

Nevertheless, Ralph Lauren has been on track with store re-opening efforts across all markets. The reopening of stores is likely to have provided some cushion to the company’s performance in the second quarter. Additionally, the company is expected to have benefitted from consistent growth in its digital business amid the pandemic. In this respect, efforts to bolster services such as buy online pick up in store and curbside pickups are likely to have been upsides.

Ralph Lauren Corporation Price, Consensus and EPS Surprise


Ralph Lauren Corporation Price, Consensus and EPS Surprise

Ralph Lauren Corporation price-consensus-eps-surprise-chart | Ralph Lauren Corporation Quote


What the Zacks Model Unveils

Our proven model predicts an earnings beat for Ralph Lauren this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ralph Lauren carries a Zacks Rank #2 and an Earnings ESP of +6.22%.

Stocks Poised to Beat Earnings Estimates

Here are some more companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

News Corporation NWSA currently has an Earnings ESP of +75% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Crocs, Inc. CROX currently has an Earnings ESP of +2.56% and a Zacks Rank #1.

Deckers Outdoor Corporation DECK has an Earnings ESP of +0.95% and a Zacks Rank #2, at present.

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