During a downturn in the Chinese luxury market, Ralph Lauren has emerged as a dark horse:
According to the company’s latest financial report, for the second quarter of fiscal year 2025, ending September 28, Ralph Lauren’s revenue grew by 6% year-over-year on both a reported and constant currency basis, driven by performance in Europe and Asia, exceeding expectations. Growth in the Chinese market reached the low double digits.
Notably, Ralph Lauren has achieved 17 consecutive quarters of revenue growth in the Chinese market. The last quarterly decline dates back to the second quarter of 2020 during the COVID-19 pandemic. However, the proportion of revenue from China remains relatively small at 8%, signaling significant potential for future expansion.
Buoyed by steady growth, Ralph Lauren’s stock price has surged 74% over the past 12 months. As of market close on Wednesday, November 27, its share price stood at $222.67, with a market capitalization of $13.83 billion—close to that of Tapestry, the parent company of Coach and the largest publicly traded high-end fashion company in the US, which has a market cap of $14.2 billion. In comparison, Ralph Lauren’s direct competitor, PVH Group, the parent company of Calvin Klein and Tommy Hilfiger, currently has a market cap of $5.97 billion, less than half of Ralph Lauren’s.
During the earnings call following the report, President and CEO Patrice Louvet outlined several key drivers behind the growth in the Chinese market.
Patrice Louvet stated, “China is clearly a focal point for many, and we are very pleased with the momentum we have achieved there. We’ve maintained growth for 17 consecutive quarters despite challenges such as the pandemic, uncertainties in the luxury market, and consumer sentiment pressures.”
He highlighted that the low double-digit growth in the Chinese market came on top of last year’s growth of over 25%. This achievement was fueled by a double-digit increase in new customer acquisition, stable comparable sales growth, the opening of new full-price and franchise stores, and further expansion on emerging platforms like Douyin (China’s TikTok). The brand’s appeal in China continues to grow, as the company focuses primarily on building connections with Chinese consumers. Specifically:
Core Products Resonate with Chinese Consumers
Patrice Louvet noted that core products, such as polo shirts, knitwear, and sports jackets, are well-received in key cities like Tokyo, Seoul, Shanghai, and Milan.
“Ralph Lauren resonates strongly with the Chinese market, and our products connect well with Chinese consumers,” said Louvet. “I think in a time when global consumers are more cautious about their future and are more selective about their spending, they rely on brands they are familiar with and product categories they trust. Ralph Lauren clearly holds strong credibility in these categories. You see this reflected globally—not just for a single quarter but as part of a sustained trend. This is partly a result of our strategy: focusing on our core first, then expanding further.”
Focus on Six Key Cities in China
Patrice Louvet explained that Ralph Lauren’s ecosystem is thriving in six major Chinese cities, including Beijing, Shanghai, Shenzhen, and Chengdu.
This concept traces back to the strategic growth plan titled “Next Great Chapter: Accelerate,” unveiled at the company’s Investor Day in fiscal year 2023 in New York. As part of this strategy, Ralph Lauren identified three key growth drivers, one of which is “winning with consumer ecosystems in key cities.” The company emphasized building a cohesive, digitally-led ecosystem in its top 30 cities worldwide.
Expansion in Tier-1 and Tier-2 Cities
According to Luxe.CO Intelligence, Ralph Lauren has been steadily expanding its footprint in tier-1 and tier-2 cities in China this year, opening new stores in cities such as Hangzhou, Shijiazhuang, Beijing, Kunming, Wuhan, and Shenzhen. In Beijing’s China World Trade Center, the brand opened a Purple Label boutique, which features the exclusive, limited-edition Golden RL 888 handbag, available only in China. In Wuhan SKP, Ralph Lauren launched its first Ralph Lauren Home in Central China, where the company also debuted its first Ralph’s Coffee in the region. In Shenzhen’s MixC Mall, Ralph Lauren opened the largest brand store in the city, which is also South China’s first standalone Ralph Lauren Home.
Patrice Louvet expressed his excitement about the performance of the new full-price store in Shenzhen’s MixC Mall, stating, “We are very excited about the Shenzhen MixC Mall store. It looks stunning and has had a very strong start.”
He further added, “We plan to open approximately 70 stores across Asia this year, some of which will be in China. However, we remain highly disciplined in our approach. I deeply appreciate the meticulous work our team has done in that market, particularly in selecting store locations and building connections with the ecosystem.”
Expansion on Platforms Like Douyin
Patrice Louvet also discussed Ralph Lauren’s efforts to expand its presence on new platforms like Douyin (China’s TikTok). “We are learning about Douyin and how to do it effectively. In fact, as we speak, our women’s Polo designer is in China collaborating with the team to determine the best way to showcase Polo womenswear on this platform.”
Ralph Lauren has already built a strong online presence on major e-commerce platforms like Tmall and JD.com, as well as on social media platforms like WeChat. During the last earnings call, Louvet mentioned that the company achieved double-digit sales growth during China’s 618 shopping festival, significantly outperforming competitors. He noted that these campaigns are not just about immediate sales but are part of long-term brand-building efforts, with a focus on high-quality sales and acquiring new customers.
“These are sustainable drivers of our company’s ongoing growth,” said Louvet. “Our ambitions for China remain unchanged. Currently, revenue from China accounts for about 8% of the company’s total, meaning it is still a relatively small share for Ralph Lauren but holds much greater potential.”
“We are not expanding for the sake of short-term gains. Instead, we are building the brand for the next five, ten, or fifteen years. In the current volatile environment, we see tremendous growth opportunities and are closely monitoring these. That said, we remain ambitious not only about China but also about other geographic regions like Europe and the Western US, aligning with our diversified growth strategy,” Louvet added.
Beyond China, Ralph Lauren is performing robustly in other international markets, including Japan, Germany, France, and Italy. The company is driving domestic demand by elevating its brand and engaging both new and loyal customers.
Additionally, Ralph Lauren has raised its full-year guidance, now forecasting revenue growth of 3%-4% year-over-year, compared to the previous estimate of 2%-3%.
Patrice Louvet outlined the core reasons behind Ralph Lauren’s potential for future growth.
Firstly, he emphasized the brand’s unique and timeless nature, which the company continues to nurture and invest in. He pointed to their impactful marketing and cultural campaigns, including partnerships with major events such as the Olympics, Wimbledon, the US Open, and the stunning fashion show in the Hamptons. “We remain committed to investing in our brand—not just during the summer or holiday season, but with a consistent mindset,” he said. This approach, according to Louvet, has brought great results globally.
Secondly, Louvet highlighted the company’s ability to design and deliver products that resonate across geographies and generations. He noted that Ralph Lauren’s timeless quality and style are key factors, with the brand’s core product lines—accounting for 70% of the business—delivering strong double-digit growth this quarter. These products, forming the foundation of the company, have continued to connect deeply with consumers. Louvet added that the breadth and depth of Ralph Lauren’s lifestyle product portfolio, combined with the company’s flexibility to adapt, are two competitive advantages in the ever-changing fashion market.
Thirdly, he discussed the company’s proven strategy for entering high-end markets. This strategy has been successfully implemented in tier-1 cities across China and Europe. A similar approach is now underway in North America, where the company is pleased to see momentum returning. Ralph Lauren achieved a 6% growth in same-store sales in North America during the latest quarter, building on five consecutive quarters of comparable sales growth. Louvet remarked, “Overall, I think we’ve seen strong performance in all major cities, starting with our physical stores.”
“In this volatile environment, Ralph Lauren is decisively going on the offensive,” he concluded. “We have momentum, and our diversified growth strategy is working. We will continue to execute with agility and excellence.”
| Source: Ralph Lauren Earnings Call
| Image Credit: Ralph Lauren Official Website, Official Weibo
| Editor: LeZhi
