Ralph Lauren Corp

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RL : NYSE : Consumer Goods
$81.9 -1.07 | -1.29%
Today's Range: 81.685 - 83.58
Avg. Daily Volume: 1825700.0
03/30/17 - 4:02 PM ET

Financial Analysis


RALPH LAUREN CORP's gross profit margin for the third 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 strong liquidity. Currently, the Quick Ratio is 1.63 which shows the ability to cover short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 5.09% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)1714.01946.0
EBITDA ($mil)297.0342.0
EBIT ($mil)219.0266.0
Net Income ($mil)82.0131.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1390.01229.0
Total Assets ($mil)5966.06341.0
Total Debt ($mil)863.0900.0
Equity ($mil)3610.03804.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin58.1756.73
EBITDA Margin17.3217.57
Operating Margin12.7813.67
Sales Turnover1.171.17
Return on Assets2.447.55
Return on Equity4.0412.59
Debt Q3 FY16 Q3 FY15
Current Ratio2.642.84
Debt/Capital0.190.19
Interest Expense4.06.0
Interest Coverage54.7544.33


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)82.284.0
Div / share0.50.5
EPS0.981.54
Book value / share43.9245.29
Institutional Own % n/a n/a
Avg Daily Volume1795058.0843150.0

Valuation


HOLD. RALPH LAUREN CORP's P/E ratio indicates a significant premium compared to an average of 23.80 for the Textiles, Apparel & Luxury Goods industry and a significant premium compared to the S&P 500 average of 26.33. To use another comparison, its price-to-book ratio of 1.80 indicates a discount versus the S&P 500 average of 2.93 and a significant discount versus the industry average of 5.11. 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 45.27 Peers 23.80   RL 6.42 Peers 15.43

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

RL is trading at a significant premium to 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 15.38 Peers 20.73   RL 2.11 Peers 2.02

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
RL 1.80 Peers 5.11   RL -68.42 Peers 9.53

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 0.94 Peers 2.19   RL -6.22 Peers 5.97

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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