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Ralph Lauren Declares Dividend of $0.50 Per Share

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Sep. 1 2016, Published 2:59 p.m. ET

Price movement

Ralph Lauren (RL) has a market cap of $8.6 billion. It fell by 0.84% to close at $103.62 per share on August 31, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -3.9%, 10.9%, and -6.0%, respectively, on the same day. RL is trading 0.69% below its 20-day moving average, 4.8% above its 50-day moving average, and 4.2% above its 200-day moving average.

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Related ETF and peers

The First Trust Large Cap Value AlphaDex ETF (FTA) invests 0.73% of its holdings in Ralph Lauren. The ETF tracks an index that selects and weights value stocks from the S&P 500 Value Index using fundamental factors including sales, book value, and cash flows. The YTD price movement of FTA was 11.2% on August 31.

The market caps of Ralph Lauren’s competitors are as follows:

  • VF Corporation (VFC) — $25.8 billion
  • HanesBrands (HBI) — $10.1 billion
  • PVH (PVH) — $8.7 billion

Ralph Lauren declares dividend

Ralph Lauren has declared a regular quarterly dividend of $0.50 per share on its common stock. The dividend will be paid on October 14, 2016, to shareholders of record at the close of business on September 30, 2016.

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Performance of Ralph Lauren in fiscal 1Q17

Ralph Lauren reported fiscal 1Q17 net revenues of $1.55 billion, a fall of 4.1% from the net sales of $1.62 billion in fiscal 1Q16. Revenue from its Wholesale, Retail, and Licensing segments fell by 5.5%, 3.0%, and 7.3%, respectively, between fiscals 1Q16 and 1Q17. The company’s gross profit margin fell by 3.4%.

Its net income and EPS (earnings per share) fell to -$22.0 million and -$0.27, respectively, in fiscal 1Q17, compared with $64.0 million and $0.73, respectively, in fiscal 1Q16. It reported adjusted EPS of $1.06 in fiscal 1Q17.

Ralph Lauren’s cash and cash equivalents and inventories rose by 0.22% and 10.4%, respectively, between fiscals 4Q16 and 1Q17. Its current ratio fell to 2.3x and its debt-to-equity ratio rose to 0.72x in fiscal 1Q17, compared with 2.5x and 0.66x, respectively, in fiscal 4Q16.

Projections

Ralph Lauren (RL) has made the following projections for fiscal 2Q17 :

  • consolidated net revenues to fall to mid-to-high single digits
  • tax rate of ~29%
  • operating margin to fall ~2.0%–2.5% from fiscal 2Q16

The company has made the following projections for fiscal 2017:

  • consolidated net revenues to fall at a low-double-digit rate, which includes a proactive pullback in inventory receipts, store closures, pricing harmonization and other sale initiatives, and a weak retail and high promotional environment in the United States
  • operating margin of ~10%
  • tax rate of ~29%
  • annualized expense savings of $180 million–$220 million from restructuring activities related to changes in the organizational structure and rightsizing its cost structure and real estate portfolio

In the next part, we’ll take a look at Gentex (GNTX).

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