On November 5, US luxury fashion group Ralph Lauren Corporation (NYSE: RL) reported results for the second quarter of fiscal 2027, ended September 26, 2026. Global revenue rose 9% year on year to $2.19 billion, up 10% at constant currency, exceeding market expectations.
During the quarter, global direct-to-consumer comparable store sales increased 10% year on year, with balanced growth across online and physical stores, while average unit retail (AUR) rose 9%. Strong demand at full price and disciplined cost control drove greater-than-expected expansion in adjusted gross and operating margins, more than offsetting continued investment in marketing and long-term growth initiatives.
Revenue grew in every region. Asia led the way, with revenue rising 28% year on year to $571 million (up 23% at constant currency), while revenue in China grew more than 35%.
Ralph Lauren Chief Financial Officer Justin Picicci said on the earnings call that China continued to lead growth, supported by solid comparable store sales and the successful acquisition of high-quality new customers.
The group’s Executive Chairman and Chief Creative Officer Ralph Lauren said, “As we enter the Holiday season, I’m reminded of what has always inspired me — the beauty of the world around us, the warmth of family and the optimism and sense of possibility that have guided us for nearly 60 years. These values are deeply personal to me and remain at the heart of our Company and everything we create.”
The group’s President and Chief Executive Officer Patrice Louvet said, “We delivered strong second quarter performance, enabling us to raise our Fiscal 2027 outlook once again. Through a dynamic global operating environment, we continue to invest in the strategic priorities that are bringing our Next Great Chapter: Drive plan to life — strengthening our brand desirability and delighting multi-generational customers in every geography around the world to drive sustainable long-term growth and value creation. We remain confident in the strength of our brand, our teams and our diversified engines of growth through this fiscal year and beyond.”
Ralph Lauren shares fell 7.5% from the previous session to close at $381.78 on November 5 after its third-quarter outlook fell short of analysts’ expectations. The shares were still up 20.5% over the past year. The company’s market capitalisation stood at approximately $22.75 billion.
Ralph Lauren’s key achievements across its strategic priorities in the second quarter of fiscal 2027 included the following.
— Elevate and Energize Our Lifestyle Brand
Customer acquisition and loyalty continued to improve. The direct-to-consumer (DTC) business added 1.7 million new customers, while brand awareness, purchase intent and Net Promoter Score all rose. Total social media followers surpassed 72 million, up by a mid-single-digit percentage year on year.
Ralph Lauren reached consumers through meaningful brand connections and in-person events. Highlights included sponsorships of iconic sporting events such as Wimbledon, the US Open Tennis Championships and Goodwood Revival, as well as its Spring 2027 women’s collection show in New York and a screening of the documentary Very Ralph in Seoul. Celebrity looks that drew attention included those worn by BTS at MetLife Stadium, Elle Fanning and Matt Damon, as well as Karl-Anthony Towns’ wedding look.
— Drive the Core and Expand for More
The core business continued to grow, rising 10% year on year. High-potential categories, including womenswear, outerwear and handbags, grew by a low double-digit percentage at constant currency, outpacing the company as a whole.
Product highlights for the quarter included Ralph Lauren x Gee’s Bend and the second Polo Ralph Lauren x TÓPA capsule collection, both part of the brand’s pioneering Artist in Residence programme. The brand also presented its US Open collection, inspired by the heritage of tennis and the spirit of New York, and officially launched Polo Blaze, its newest handbag collection.
Average unit retail across all DTC channels increased 9% in the second quarter, exceeding expectations. This reflected continued brand premiumisation, strong full-price sales trends and a favourable mix across regions and channels.
— Win in Key Cities with Our Consumer Ecosystem
Asia led regional growth at 28%, followed by mid-single-digit growth in North America and low-single-digit growth in Europe. Revenue in China rose more than 35% on both a reported and constant-currency basis, driven by continued growth in comparable store sales and an expanded distribution network.
The group continued to expand its retail presence in key cities, opening 22 new company-operated and partner-operated stores during the quarter and launching the Ralph Lauren mobile app in Japan. Key openings included the Boston Seaport store, which houses the first Ralph’s Coffee in Massachusetts, separate men’s and women’s standalone stores in London’s Sloane Square, a store in Saint-Tropez, France, and a store at Beijing Chaoyang Hopson One, among others.
Ralph Lauren’s Key Financial Results for the Second Quarter of Fiscal 2027
- Revenue rose 10% year on year to $2.19 billion (up 9% at constant currency).
- Gross profit was $1.6 billion, and the gross margin rose 620 basis points year on year to 74.2%.
- Operating profit was $364 million, with an operating margin of 16.6%.
- Adjusted operating profit was $345 million, and the adjusted operating margin rose 160 basis points year on year to 15.7%.
- Net income was $297 million, and adjusted net income was $283 million.
- Diluted earnings per share were $4.87, and adjusted diluted earnings per share were $4.64.
By Region
- North America: Revenue rose 6% year on year to $885 million. Comparable retail sales increased 6% year on year, with sales at physical stores up 6% and e-commerce sales up 5%. Wholesale revenue rose 8% year on year, with shipments brought forward from the second half of fiscal 2027 contributing approximately 4 percentage points of growth.
- Europe: Revenue rose 1% year on year to $696 million (up 3% at constant currency). Comparable retail sales declined 1% year on year, with sales at physical stores down 4% and e-commerce sales up 9%. Wholesale revenue rose 3% year on year (up 4% at constant currency).
- Asia: Revenue rose 28% year on year to $571 million (up 28% at constant currency). Comparable store sales rose 24% year on year, with sales at physical stores up 23% and e-commerce sales up 31%.
Justin Picicci said, “Asia remains our strongest growth engine. We’ve raised our full-year growth outlook to the low double digits. For the third quarter, we expect high-single-digit to low-double-digit growth, which would make it another strong quarter. Year-on-year comparisons will become significantly tougher in the second half, with the fourth quarter presenting the toughest comparison of the year, especially in China.
“We’re confident in the momentum we’re seeing across Asia, and growth is broad-based. China is leading, and markets such as Japan and South Korea are also growing well. The brand continues to gain momentum, and we have room to expand in every key market in the region.
“For China specifically, our updated outlook calls for mid- to high-double-digit growth for the full year, a slight increase from our previous forecast. The underlying organic momentum in China remains very strong. Our second-half outlook reflects tougher comparisons and our deliberate approach to pacing growth and investment in the market. The underlying momentum and our confidence remain intact.”
Patrice Louvet added, “Growth is coming from across Asia, with particularly strong momentum in China. China stands out for its growth rate, and South Korea is also performing very well. Japan has good momentum, and Southeast Asia is growing strongly. Australia is going through a promising transformation that I believe will deliver encouraging results. We have an excellent management team overseeing the region. A few weeks ago, we visited Japan and South Korea with our board and saw how well our operations are being run there.
“Asia, particularly China, serves as an incubator for innovation across the group. We’re putting new ideas into practice here in clienteling, personalisation, social media engagement and on emerging platforms such as Douyin. As Justin said, we’re managing the pace of our growth. Underlying growth is strong and healthy, and we’re moving at a measured pace to keep the brand strong three, five and even ten years from now. We’re laying the foundations for the long term in these key markets. The response we’ve had from consumers across generations in China has been genuinely encouraging.
“We’re currently present in just six key cities in China. As I said earlier about North America, we’ve been in the market for some time and still have considerable room to grow. The same applies to China. That brings us back to our diversified growth model and the many opportunities we have to expand geographically.”
By Channel
- Retail: Revenue of $1.414 billion, compared with $1.265 billion a year earlier.
- Wholesale: Revenue of $739 million, compared with $702 million a year earlier.
- Licensing: Revenue of $40.4 million, compared with $44.4 million a year earlier.
Third-Quarter Fiscal 2027 Outlook at Constant Currency
- Revenue is expected to grow by a low- to mid-single-digit percentage, at approximately 3% to 4%.
- Operating margin is expected to expand by 50 to 70 basis points.
Fiscal 2027 Outlook on a Comparable 52-Week Basis at Constant Currency
- Revenue is expected to grow by a mid- to high-single-digit percentage year on year, at approximately 6% to 7%. The group raised its previous forecast of 5% to 6% following stronger-than-expected second-quarter results.
- Operating margin is expected to expand by approximately 80 to 100 basis points, above previous guidance, primarily due to gross margin expansion.
| Source: Official earnings release
| Image Credit: Brand social media accounts and official website
| Editor: Luxeplace
