At 8:00 a.m. Eastern Time on August 6, American fashion and luxury group Ralph Lauren Corp. (hereinafter “Ralph Lauren”) (NYSE: RL) announced its results for the first quarter of fiscal 2027 ended June 27, 2026: revenue rose 14% year-on-year to $1.96 billion (+13% in constant currency), exceeding market expectations.
Asia led growth across regions, with first-quarter revenue reaching $589 million, up 24% year-on-year (+25% in constant currency), while revenue in China grew by more than 40% year-on-year.
Ralph Lauren Chief Financial Officer Justin Picicci noted during the analyst conference call that China continued to lead overall growth, driven by healthy comparable sales performance and strong acquisition of high-quality new customers. President and Chief Executive Officer Patrice Louvet said that strong sales in China were primarily supported by localised marketing initiatives such as the inaugural Ralph Lauren Polo Cup, the continued expansion of the company’s store network across six key city clusters in China, and increased investment in digital channels.
Following the earnings release, Ralph Lauren shares closed approximately 4% higher than the previous trading day at $395.83 per share, with the stock up approximately 32% over the past year. The company’s latest market capitalisation stands at approximately $23.5 billion.
Ralph Lauren Executive Chairman and Chief Creative Officer Mr. Ralph Lauren said, “As we celebrate America’s 250th anniversary and look ahead to important milestones for our Company over the coming year, I’m reminded of what has inspired us for nearly 60 years — optimism and aspiration, authenticity and the belief that we all can step into our dreams. These are the values that our teams around the world embrace every day, that will endure as we continue to grow and evolve.”
Patrice Louvet said, “We are off to a strong start in the second year of our Next Great Chapter: Drive plan, with broad-based performance across geographies, channels and consumer segments in the first quarter — exceeding our expectations and driving an increase in our full year Fiscal 2027 outlook. Our iconic brand is resonating around the world, and we continue to invest behind the long-term strategic priorities that will drive further sustainable growth and value creation into the future – from recruiting new and younger consumers to strengthening our core and high-potential categories and developing our key city ecosystems in every region.”
Key highlights across Ralph Lauren’s strategic priorities in the first quarter of fiscal 2027 were as follows:
– Elevate and Energize Our Lifestyle Brand
New customer acquisition and loyalty continued to strengthen during the first quarter, with 1.5 million new consumers added through DTC (direct-to-consumer) channels. Brand awareness, purchase intent and Net Promoter Score all increased, while the brand’s total social media following surpassed 70 million, representing high-single-digit growth versus the previous fiscal year.
The brand engaged consumers through powerful and authentic brand connections and cultural storytelling, with key initiatives including the Spring 2026 global campaign A Sporting Life, the American Icons commemorative stamps celebrating America’s 250th anniversary, the Spring 2027 men’s runway show in Milan, the inaugural Ralph Lauren Polo Cups in Beijing and Sydney, and the new book Ralph Lauren Catwalk, featuring iconic womenswear runway looks spanning more than 50 years of the brand’s history.
– Drive the Core and Expand for More
Revenue from the core business maintained mid-teens growth in constant currency, while revenue from high-potential categories including womenswear, outerwear and handbags increased by more than 20% year-on-year in constant currency, outpacing the company’s overall revenue growth.
Key product launches during the quarter included the Spring 2026 collection, featuring fluid and refined silhouettes in womenswear and a modern travel-inspired aesthetic in menswear; the Wimbledon capsule collection; and a new home collection unveiled during Milan Design Week 2026.
During the quarter, average unit retail (AUR) across DTC channels increased by 15%, exceeding expectations and reflecting the continued premiumisation of the brand’s positioning, strong full-price selling trends and lower-than-planned promotional activity.
– Win in Key Cities with Our Consumer Ecosystem
By market, Asia and North America led growth, both delivering double-digit increases, while Europe recorded high-single-digit growth. Revenue in Asia rose 24% year-on-year, driven by all key markets including China, where revenue increased by more than 40% year-on-year.
The company continued to expand its key city ecosystems, opening 22 directly operated and partner stores during the first quarter. Key openings included a store at The Grove in Los Angeles, California; a store at Stanford Shopping Center in Palo Alto, California, including the state’s second Ralph’s Coffee; a store in Istanbul, Türkiye; and new Polo stores in Sydney and Perth, Australia.
Ralph Lauren’s key financial results for the first quarter of fiscal 2027 were as follows:
- Revenue increased 14% year-on-year to $1.96 billion (+13% in constant currency);
- Gross profit was $1.44 billion, with gross margin of 73.7%, up 140 basis points year-on-year;
- Operating profit was $342 million, with an operating margin of 17.5%;
- Adjusted operating profit was $366 million, with an adjusted operating margin of 18.7%, up 170 basis points year-on-year;
- Net income was $262 million, while adjusted net income was $281 million;
- Diluted earnings per share were $4.28, while adjusted diluted earnings per share were $4.59.
By region:
- North America: First-quarter revenue was $740 million, up 13% year-on-year. Comparable retail sales increased 9% year-on-year, including a 10% increase in brick-and-mortar store sales and an 8% increase in digital commerce sales. Wholesale revenue increased 22% year-on-year, including approximately 15 percentage points of growth from the resumption of shipments to a luxury wholesale customer and the delayed delivery of orders originally scheduled for the fourth quarter of fiscal 2026.
- Europe: First-quarter revenue was $594 million, up 7% year-on-year (+5% in constant currency). Comparable retail sales increased 1% year-on-year, with brick-and-mortar store sales increasing slightly and digital commerce sales rising 6%. Wholesale revenue increased 11% year-on-year (+8% in constant currency), including approximately 5 percentage points of growth from the earlier delivery of orders originally scheduled for the second quarter of fiscal 2027.
- Asia: First-quarter revenue was $589 million, up 24% year-on-year (+25% in constant currency). Comparable sales increased 23% year-on-year, including a 22% increase in brick-and-mortar store sales and a 32% increase in digital commerce sales.
By channel:
- Retail revenue was $1.369 billion in the first quarter, compared with $1.201 billion in the same period last year;
- Wholesale revenue was $555 million in the first quarter, compared with $484 million in the same period last year;
- Licensing revenue was $35.8 million in the first quarter, compared with $34.4 million in the same period last year.
Fiscal 2027 second-quarter outlook:
- Revenue in constant currency is expected to increase by 5%-6% year-on-year;
- Operating margin in constant currency is expected to expand by 80-100 basis points.
Fiscal 2027 full-year outlook:
- Full-year revenue in constant currency is expected to increase by 5%-6% year-on-year;
- Operating margin in constant currency is expected to expand by 60-80 basis points.
| Source: Original earnings report
| Image Credit: Original earnings report
| Editor: Luxeplace
