Ralph Lauren reports positive Q1, maintains outlook

In the first quarter of fiscal 2025, revenue at Ralph Lauren increased 1 percent to 1.5 billion dollars on a reported basis and 3 percent in constant currency.

The company’s net income in the first quarter was 169 million dollars or 2.61 dollars per diluted share on a reported basis. On an adjusted basis, net income was 175 million dollars or 2.70 dollars per diluted share.

"We delivered a solid start to the year, with first quarter performance exceeding our expectations on the top and bottom-line led by our direct-to-consumer and international businesses," said Patrice Louvet, president and chief executive officer in a statement.

Ralph Lauren declines in North America but grows in other markets

The company said North America revenue in the first quarter decreased 4 percent to 608 million dollars. In retail, comparable store sales in North America increased 1 percent, with a 3 percent increase in brick and mortar stores more than offsetting a 4 percent decrease in digital commerce. Wholesale revenue decreased 13 percent.

The company’s revenue in Europe increased 6 percent to 479 million dollars on a reported basis and 7 percent in constant currency. In retail, comparable store sales increased 8 percent, with a 7 percent increase in brick and mortar stores and a 14 percent increase in digital commerce and wholesale revenue increased 5 percent to prior year.

Asia revenue increased 4 percent to 391 million dollars on a reported basis and 9 percent with comparable store sales increase of 9 percent. The company reported a 7 percent increase in brick and mortar stores and a 21 percent increase in digital commerce.

Gross profit for the quarter was 1.1 billion dollars and gross margin was 70.5 percent. Adjusted gross margin was also 70.5 percent, 170 basis points above the prior year.

Ralph Lauren maintains full year outlook

For fiscal 2025, the company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, centering on around 2 percent to 3 percent.

The company added that full year operating margin is expected to expand approximately 100 to 120 basis points and gross margin is expected to increase approximately 50 to 100 basis points.

For the second quarter, Ralph Lauren expects constant currency revenues to grow approximately low to mid-single digits, in a range centred around 3 percent to 4 percent.

The company forecasts operating margin o expand approximately 80 to 120 basis points in constant currency, with roughly 110 to 130 basis points of gross margin expansion.