Ralph Lauren Q1 Earnings Call Highlights

Ralph Lauren exceeded first-quarter expectations: Constant-currency revenue rose 13%, direct-to-consumer comparable sales increased 12%, and adjusted operating margin expanded 150 basis points to 18.5%. Asia led regional growth, with revenue up 25% and China sales increasing more than 40%; North America revenue rose 13%, while Europe grew 5% amid softer traffic and macroeconomic pressure. The company raised its fiscal 2027 outlook, now expecting 5%–6% constant-currency revenue growth and 60–80 basis points of operating-margin expansion, supported by stronger full-price selling, higher average unit retail and continued brand investment.

Ralph Lauren NYSE: RL reported first-quarter fiscal 2027 results that exceeded its expectations, with revenue rising 13% on a constant-currency basis and adjusted operating margin expanding 150 basis points to 18.5%. President and Chief Executive Officer Patrice Louvet said growth was broad-based across regions, channels and product categories, supported by increased full-price selling, brand activations and continued investment in the company’s “Next Great Chapter: Drive” strategy. Direct-to-consumer comparable sales rose 12%, while wholesale revenue increased 13%.

“Our first quarter performance exceeded our expectations on both the top and bottom line,” Chief Financial Officer Justin Picicci said. The company raised its full-year outlook while retaining what management described as a prudent view of consumer conditions in Europe.

Asia was Ralph Lauren’s fastest-growing region, with revenue up 25% in the quarter and retail comparable sales rising 23%. China sales increased more than 40%, driven by comparable growth and new customer recruitment, while Japan and Korea also delivered double-digit growth.

Louvet said Ralph Lauren’s China strategy centers on brand storytelling, expansion in six priority city clusters, core products and higher-potential categories such as women’s apparel and handbags. He cited a Ralph Lauren Polo Cup event in Beijing that drew 74 million livestream viewers. Management expects China growth of approximately mid-teens for the full fiscal year, noting that the company will face stronger comparisons in the back half. Ralph Lauren raised its fiscal 2027 outlook for Asia to high-single-digit to low-double-digit revenue growth, compared with its previous forecast for high-single-digit growth.

North America revenue increased 13%, including a 9% increase in retail comparable sales and 22% growth in wholesale. The wholesale result benefited from strong spring sellout trends, replenishment orders, resumed shipments to a luxury wholesale account and shipment timing. Picicci said timing shifts and resumed shipments contributed about 15 percentage points of North American wholesale growth in the quarter.

European revenue rose 5%, led by Germany, Italy and Spain. Retail comparable sales in the region increased 1% on top of a double-digit comparison a year earlier, while wholesale revenue rose 8%, including an approximately five-point benefit from earlier shipment timing. Management said European store traffic has been pressured by the broader macroeconomic environment, including elevated energy costs, weaker consumer sentiment, Middle East-related disruption to partner sales and tourism trends. However, Ralph Lauren said higher conversion rates and basket sizes helped offset softer traffic.

Adjusted gross margin expanded 130 basis points to 73.6%. Average unit reta...