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Factors Likey to Influence Ralph Lauren (RL) in Q1 Earnings

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Ralph Lauren Corporation (RL - Free Report) is slated to release first-quarter fiscal 2021 results on Aug 4, before the opening bell. In the last reported quarter, the premium designer of lifestyle products delivered loss per share of 68 cents compared with the Zacks Consensus Estimate of a loss of 2 cents. Moreover, its bottom line delivered a substantial negative earnings surprise, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s fiscal first-quarter loss stands at $1.50 per share, against earnings of $1.77 delivered in  the year-ago quarter. The loss estimate for the fiscal first quarter has widened by 3 cents in the past 30 days. For fiscal first-quarter revenues, the consensus mark is pegged at $648.6 million, suggesting a 54.6% decline from the prior-year quarter’s reported figure.

Key Factors to Note

On its last earnings call, Ralph Lauren stated that it is likely to witness significant impacts from the coronavirus outbreak in the fiscal first-quarter, due to temporary store closures across all regions. Further, the persistence of protest-related business disruptions in Hong Kong is likely to have marred results in the to-be-reported quarter. Apart from these, adverse foreign currency rates remain a drag.

However, with the easing of restrictions, Ralph Lauren has been on track with store re-opening efforts across all markets. The reopening of stores is likely to have contributed to sales in the fiscal first quarter. Additionally, the company’s top line is expected to have benefited from the continuity of its digital business amid the pandemic. The company continues to operate online through capabilities like digital clienteling, Buy Online Ship From Store, Buy Online Pick Up From Store, curbside pickup and other initiatives.

Ralph Lauren Corporation Price and EPS Surprise

Zacks Model

Our proven model does not conclusively predict an earnings beat for Ralph Lauren this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ralph Lauren carries a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -68.89%.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Dollar General Corporation (DG - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Big Lots (BIG - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank #3.

Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3.

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