Ralph Lauren reported first-quarter financial results that outperformed analysts' expectations, driven by strong purchases of higher-end merchandise from younger and wealthier shoppers in Asia and North America. The company highlighted demand for items such as linen shorts and lightweight outerwear as contributors to the quarter's upside.
For the quarter, Ralph Lauren posted revenue of $1.96 billion, topping the $1.87 billion consensus compiled by LSEG. Adjusted earnings per share came in at $4.59, above the $4.32 per share estimate. Despite the better-than-expected results, the company's shares dipped marginally in premarket trading.
Ralph Lauren also raised its full-year revenue forecast to a range of 5% to 6% growth. The midpoint of that guidance, however, is below the analysts' forecast of a 6.2% increase, a discrepancy that could temper investor reactions despite the quarterly beat.
The New York-based fashion house, founded by designer Ralph Lauren in 1967, reported solid growth across multiple regions, including North America, even as the broader global luxury sector has shown signs of slowing. Management has spent the past decade executing a turnaround plan that began when the company appointed its first outside chief executive, a move credited with reviving sales and focusing the brand on higher-end apparel.
Part of the company's repositioning has involved refreshing key categories to appeal to younger consumers. Updated takes on fleece, sweatshirts and hoodies, along with elevated seasonal pieces such as linen shorts and lightweight outerwear, have been deployed to attract and retain a younger, affluent customer base.
While the quarterly results and raised revenue outlook signal continued momentum in Ralph Lauren's premium assortments, the company faces the dynamic of an uneven luxury market and investor scrutiny of guidance that falls short of some analysts' expectations. The company did not provide further commentary beyond the reported figures and guidance.
Summary of results
- Quarterly revenue: $1.96 billion (vs $1.87 billion LSEG estimate)
- Adjusted EPS: $4.59 (vs $4.32 estimate)
- Updated annual revenue guidance: 5% to 6% growth - midpoint below analysts' 6.2% estimate
- Shares: dipped marginally in premarket trading