Ralph Lauren Raises Outlook as Asia Growth Lifts Revenue
Adjusted earnings rose 22% to $4.59 a share in the fiscal first quarter.
Luxury apparel company Ralph Lauren Corp. (RL) posted a 14% revenue increase as growth in Asia and higher full-price selling widened margins in its fiscal first quarter.
The quarter extended Ralph Lauren’s recent momentum while shifting more of the growth toward international markets. Reported revenue growth slowed from 17% in the fourth quarter, though constant-currency growth accelerated to 13% from 12% and 10% in the preceding two quarters.
Revenue reached $1.96 billion, while reported net income increased 19% to $262 million. Diluted earnings rose 22% to $4.28 a share. Gross margin expanded 1.4 percentage points to 73.7% as pricing and a favorable sales mix outweighed tariffs and other product-cost pressures.
Asia led the regional performance, with revenue rising 24% to $589 million and China growing more than 40%. Asia’s operating margin widened 2.8 percentage points to 33.5%. North America revenue increased 13% to $740 million, though about 15 percentage points of its 22% wholesale gain came from resumed shipments to a luxury account and shipment timing.
Europe remained the slowest-growing major region. Revenue increased 7% to $594 million, while comparable sales rose 1% as roughly flat store sales offset a 6% digital gain. Shipments pulled forward from the second quarter added about five percentage points to European wholesale growth.
Across the business, direct-to-consumer comparable sales grew 12%, easing from 17% in the fourth quarter. Average unit retail increased 15% as Ralph Lauren maintained full-price selling and reduced promotions, helping adjusted operating margin expand 1.7 percentage points to 18.7%. Inventory declined about 5% to $1.16 billion even as revenue grew.
Ralph Lauren raised its fiscal 2027 constant-currency revenue outlook to growth of 5% to 6% from an initial mid-single-digit forecast. It now expects constant-currency operating-margin expansion of 0.6 to 0.8 percentage point, with gains still weighted toward the first half.
The company expects second-quarter constant-currency revenue growth of 5% to 6% and operating-margin expansion of 0.8 to 1 percentage point, signaling a slower pace after the first quarter benefited from shipment timing and resumed wholesale deliveries.