Dive Brief:
- Ralph Lauren Corporation beat its previous forecast, with Q4 revenue of $1.7 billion, up 8% year over year, and full year fiscal 2025 revenue up 7% to $7.1 billion, according to a Thursday earnings report.
- Europe led the company’s sales growth with a 12% year-over-year increase to $526 million. Meanwhile, sales grew 9% to $432 million in Asia, with sales in China up more than 20%.
- In North America, sales increased 6% for the quarter, slowing slightly from Q3’s 7% rise in the region. Direct-to-consumer and wholesale channels drove fourth quarter growth.
Dive Insight:
Ralph Lauren has consistently reported revenue growth despite a wider luxury sector slowdown.
“Our strong performance in the third and final year of our Next Great Chapter: Accelerate plan underscores the growing desirability of our brand and our team's powerful execution as we navigated a dynamic global operating environment,” Patrice Louvet, president and CEO of Ralph Lauren, said in the release.
Comparable retail store sales in Europe increased 18% for the period, with brick-and-mortar up 16% and digital up 25%. Wholesale revenue rose 10%, which the company attributed in part to strong re-order trends.
Comparable retail store sales in Asia rose 15%, with brick-and-mortar sales for the region up 13% and digital up 27%. However, wholesale in Asia fell 33% for the period.
In North America, comparable store retail sales increased 9% in Q4, with brick-and-mortar sales up 9% and digital up 8%. North America wholesale revenue grew 1%, which the company said was in line with expectations.
The company forecasts a low-single-digit revenue increase for fiscal 2026, with growth weighted to the first half of the fiscal year. For the first quarter, Ralph Lauren expects revenue to increase approximately high-single digits year-over-year. The company added that based on current exchange rates, foreign currency is expected to have “a relatively minimal impact on revenue and gross and operating margins in Fiscal 2026.”
Evercore analysts led by Michael Binetti called that guidance “eye-wateringly conservative.”
In an emailed note, Binetti’s team said that Ralph Lauren “is baking in some tariff exposure, and likely has some ‘sticky’ China exposure (through categories like sweaters where it’s hard to move production out of China).” The company should have the most gross margin tailwind from foreign exchange, Binetti added.
Louvet said that Ralph Lauren was planning to remain on the offensive as it entered 2026, with a focus on “driving our multiple engines of growth” across lifestyle, as well as geography and all the company’s many channels. He added that the company “will stay agile and prudent — leaning into our diversified supply chain, operating discipline, and strong balance sheet as we manage through ongoing macroeconomic uncertainty.”
