Benzinga | Aug 3, 2021 09:38AM EDT

Ralph Lauren Shares Rally On Q1 Earnings Beat, Upbeat Outlook

* Ralph Lauren Corp (NYSE:RL) reported first-quarter FY22 revenue growth of 182% year-on-year, to $1.38 billion, beating the analyst consensus of $1.21 billion.

* Revenues from North America increased 301% Y/Y to $662 million, Europe rose 194% to $355 million, and Asia grew 68% to $288 million.

* Comparable store sales increased 108%.

* Gross profit improved to $968 million, and gross margin was 70.3%. Adjusted gross margin contracted 200 basis points to 69.8% on a reported basis and down 260 basis points in constant currency.

* Adjusted operating expenses were $729 million, up 39% Y/Y.

* The operating margin was 16%, and operating income for the quarter was $220.6 million. Adjusted operating income was $231 million, and operating margin expanded 5,250 basis points to 16.8%.

* Inventories rose 3.9% Y/Y to $803 million.

* Net cash provided by operating activities for the quarter amounted to $247.6 million. The company held $2.6 billion in cash and equivalents as of June 26, 2021.

* EPS of $2.29 beat the analyst consensus of $0.86.

* "Against the backdrop of stronger than expected re-openings across North America and Europe, our teams delivered exceptional performance this quarter," said CEO Patrice Louvet.

* Outlook: Ralph sees Q2 constant currency revenue growth of 20% - 22%, operating margin of 13.0%-14.0%, and gross margin to be flat to up 20 basis points.

* For FY22, it sees constant currency revenue growth of 25% - 30% and an operating margin of 12.0%-12.5%. It sees gross margin increase 50-70 basis points (prior view of 40-60 basis point decline).

* Price action: RL shares are trading higher by 9.43% at $129.12 on the last check Tuesday.