2.21 | 1.20%
RALPH LAUREN CORP's gross profit margin for the third quarter of its fiscal year 2012 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. RALPH LAUREN CORP has average liquidity. Currently, the Quick Ratio is 1.44 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.
During the same period, stockholders' equity ("net worth") has increased by 6.79% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.
| Income Statement | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Net Sales ($mil) | 1846.1 | 1805.6 |
| EBITDA ($mil) | 379.0 | 330.5 |
| EBIT ($mil) | 318.4 | 273.7 |
| Net Income ($mil) | 215.7 | 169.0 |
| Balance Sheet | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Cash & Equiv. ($mil) | 1312.3 | 1216.5 |
| Total Assets ($mil) | 5489.2 | 5326.5 |
| Total Debt ($mil) | 274.1 | 265.6 |
| Equity ($mil) | 3769.7 | 3529.7 |
| Profitability | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Gross Profit Margin | 59.27 | 57.13 |
| EBITDA Margin | 20.52 | 18.3 |
| Operating Margin | 17.25 | 15.16 |
| Sales Turnover | 1.26 | 1.25 |
| Return on Assets | 13.06 | 12.38 |
| Return on Equity | 19.02 | 18.69 |
| Debt | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Current Ratio | 2.52 | 2.89 |
| Debt/Capital | 0.07 | 0.07 |
| Interest Expense | 5.6 | 6.3 |
| Interest Coverage | 56.86 | 43.44 |
| Share Data | Q3 FY12 | Q3 FY11 |
|---|---|---|
| Shares outstanding (mil) | 90.7 | 92.3 |
| Div / share | 0.4 | 0.2 |
| EPS | 2.31 | 1.78 |
| Book value / share | 41.56 | 38.24 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 595344.0 | 944811.0 |
BUY. The current P/E ratio indicates a discount compared to an average of 25.88 for the Textiles, Apparel & Luxury Goods industry and a premium compared to the S&P 500 average of 18.80. For additional comparison, its price-to-book ratio of 4.42 indicates a significant premium versus the S&P 500 average of 2.40 and a discount versus the industry average of 5.56. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. Upon assessment of these and other key valuation criteria, RALPH LAUREN CORP proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RL 24.10 | Peers 25.88 | RL 16.77 | Peers 21.80 | |||||||||||||||||||||
|
Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation. RL is trading at a valuation on par with its peers. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. RL is trading at a discount to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| RL 19.70 | Peers 33.25 | RL 1.90 | Peers 1.87 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. RL is trading at a significant discount to its peers. |
Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. RL trades at a valuation on par to its peers. |
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| Price/Book |
|
Earnings Growth |
|
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| RL 4.42 | Peers 5.56 | RL 10.75 | Peers 73.02 | |||||||||||||||||||||
|
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. RL is trading at a discount to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, RL is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| RL 2.41 | Peers 2.71 | RL 3.91 | Peers 39.52 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. RL is trading at a discount to its industry on this measurement. |
Lower. A sales growth rate that trails the industry implies that a company is losing market share. RL significantly trails its peers on the basis of sales growth |
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