Ralph Lauren (NYSE:RL) reported Q4 EPS of $0.49, $0.11 better than the analyst estimate of $0.38. Revenue for the quarter came in at $1.5 billion versus the consensus estimate of $1.46 billion.
GUIDANCE:
Full Year Fiscal 2023 and First Quarter Outlook
The Company's outlook is based on its best assessment of the current macroeconomic environment, including global supply chain, inflationary pressures, the war in Ukraine, COVID-19 variants and other COVID-related disruptions. The Company continues to note the ongoing uncertainty and evolving situation surrounding COVID-19 impacting the timing and path of recovery in each market, including the potential for further outbreaks or resurgences of the pandemic across various markets as well as potential global supply chain disruptions. The full year Fiscal 2023 and first quarter guidance excludes restructuring-related and other net charges, as described in the "Non-U.S. GAAP Financial Measures" section of this press release.
For Fiscal 2023, the Company expects constant currency revenues to increase approximately high single digits to last year on a 52-week comparable basis, with our current outlook at around 8%. Based on current exchange rates, foreign currency is expected to negatively impact revenue growth by approximately 400 basis points in Fiscal 2023. On a 53-week comparable basis, Fiscal 2023 revenue growth is also expected to be negatively impacted by approximately 100 basis points due to the absence of the 53rd week compared to the prior year.
The Company expects operating margin for Fiscal 2023 in a range of approximately 14.0% to 14.5% in constant currency. Foreign currency is expected to negatively impact operating margin by approximately 130 basis points in Fiscal 2023. This compares to operating margin of 13.1% on a 52-week comparable basis and 13.4% on a 53-week basis in the prior year, both on a reported basis. Gross margin is expected to increase 30 to 50 basis points in constant currency on a 52-week comparable basis, with stronger AUR and favorable product and channel mix more than offsetting higher freight and product cost inflation. Foreign currency is expected to negatively impact gross margins by approximately 110 basis points in Fiscal 2023.
For the first quarter, the Company expects revenue growth will be in a range centered around 8% in constant currency to last year. Foreign currency is expected to negatively impact revenue growth by approximately 480 to 500 basis points. The first quarter outlook reflects confirmed government-mandated lockdowns and other COVID-related restrictions, notably in China.
Operating margin for the first quarter is expected to be in a range centered around 13.5% in constant currency, reflecting increased headwinds from higher freight and marketing expense, which are expected to normalize in the second half of the year when the Company laps cost increases from the prior year. Foreign currency is expected to negatively impact first quarter operating margin by approximately 130 basis points in the first quarter. Gross margin is expected to be down slightly to last year in constant currency with continued AUR growth offset by industry-wide increases in freight and product costs. Foreign currency is expected to negatively impact gross margins by approximately 100 basis points in the first quarter.
The full year Fiscal 2023 tax rate is expected to be in the range of 25% to 26%, assuming a continuation of current tax laws. First quarter of Fiscal 2023 tax rate is expected to be about 24% to 25%.
The Company is planning capital expenditures for Fiscal 2023 of approximately $290 million to $310 million.