Ralph Lauren Lifts Outlook After Q2 Revenue Rises 9% to $2.2B

Asia powered Ralph Lauren Corporation’s fiscal second quarter, lifting company revenue 9% to $2.2 billion and prompting another raise to the New York apparel maker’s full-year outlook, the company said Thursday.

Net revenue for the quarter ended Sept. 26 was $2,193.3 million, up from $2,010.7 million a year earlier, and rose 10% in constant currency. Diluted earnings were $4.87 a share, up 47% from $3.32. Adjusted diluted earnings, which exclude restructuring-related and other net items, were $4.64, up 22% from $3.79, according to the release.

Sales by region and channel

Asia revenue jumped 28% to $571 million on both a reported and constant-currency basis, with comparable store sales up 24%. China sales rose more than 35%, the company said. North America revenue increased 6% to $885 million, and Europe rose 1% to $696 million, or 3% in constant currency.

Global direct-to-consumer comparable store sales rose 10%, with average unit retail up 9%. North America comps rose 6%; Europe comps fell 1%; Asia comps rose 24%. Ralph Lauren opened 22 new owned and partnered stores in the quarter.

Margins, cash and guidance

Reported operating income was $364 million, or a 16.6% margin. On an adjusted basis, operating income was $345 million and the margin was 15.7%, up 160 basis points from a year earlier. Adjusted gross margin reached 70.5%, up 250 basis points, the company said. Cash and short-term investments were $1.8 billion at quarter-end; inventory fell 9% to $1.2 billion. Share repurchases totaled about $250 million in the quarter and $500 million fiscal year-to-date, completing the Fiscal 2027 buyback plan.

Ralph Lauren now expects Fiscal 2027 constant-currency revenue growth of about 6% to 7% on a 52-week comparable basis, up from a prior 5% to 6% range, and operating-margin expansion of roughly 80 to 100 basis points in constant currency. For the third quarter, it guided to about 3% to 4% constant-currency revenue growth. President and Chief Executive Patrice Louvet said the results let the company “raise our Fiscal 2027 outlook once again.”

Luxury peer Tapestry also raised its outlook this week after Coach-led sales growth.

Sources: Ralph Lauren Corporation, Nasdaq