Ralph Lauren Corp

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RL : NYSE : Consumer Goods
$107.88 -1.20 | -1.10%
Today's Range: 107.65 - 108.91
Avg. Daily Volume: 1,337,000
08/24/16 - 3:59 PM ET

Financial Analysis


RALPH LAUREN CORP's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. RALPH LAUREN CORP has average liquidity. Currently, the Quick Ratio is 1.24 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, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 6.33% 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.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)1552.01618.0
EBITDA ($mil)206.0215.0
EBIT ($mil)128.0141.0
Net Income ($mil)-22.064.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1088.01158.0
Total Assets ($mil)6118.06068.0
Total Debt ($mil)978.0693.0
Equity ($mil)3566.03807.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin61.1559.89
EBITDA Margin13.2713.28
Operating Margin8.258.71
Sales Turnover1.21.24
Return on Assets5.069.95
Return on Equity8.6915.86
Debt Q1 FY16 Q1 FY15
Current Ratio2.322.69
Debt/Capital0.220.15
Interest Expense3.04.0
Interest Coverage42.6735.25


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)82.385.7
Div / share0.50.5
EPS-0.270.73
Book value / share43.3344.42
Institutional Own % n/a n/a
Avg Daily Volume1344151.01171992.0

Valuation


HOLD. RALPH LAUREN CORP's P/E ratio indicates a premium compared to an average of 28.14 for the Textiles, Apparel & Luxury Goods industry and a premium compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 2.51 indicates a discount versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 6.41. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
RL 30.00 Peers 28.14   RL 9.68 Peers 39.06

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 significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
RL 18.41 Peers 23.48   RL 1.73 Peers 2.73

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 discount to its peers.

 

Discount. 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 significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
RL 2.51 Peers 6.41   RL -46.77 Peers 7.80

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 significant 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
RL 1.22 Peers 2.69   RL -2.54 Peers 8.01

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 significant 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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