Ralph Lauren reported second-quarter revenues of US $ 1.7 billion, up 6 per cent year over year and exceeding analyst and company projections.
CEO Patrice Louvet informed investors, “We are entering the crucial holiday season with continued momentum across our brand product assortments, geographies and channels after delivering a strong second-quarter performance.”
CFO Justin Picicci discussed the possible effects of tariffs that President-elect Donald Trump has stated he intends to apply as he starts his second term in light of the results of this week’s election. “We have a flexible and strategically located worldwide sourcing and supply network. Through the epidemic and beyond, our solid global alliances have been a crucial distinction for us,” he added.
Following a 4 per cent decline in the previous quarter, North America’s revenues increased 3 per cent to US $ 739 million in the second quarter. A “modest, planned decline” in the wholesale channel was countered by retail momentum, according to Picicci.
Revenues in Europe increased 7 per cent to US $ 566 million. Picicci attributes this to Ralph Lauren’s efforts to elevate its brand. He cited the influence of the Olympics, in which Ralph Lauren served as Team USA’s official outfitter, on brand performance this quarter and singled out France and Germany as growth engines for direct-to-consumer sales.
Revenues in Asia increased by 9 per cent to US $ 380 million, exceeding the brand’s projections. China, rising 13 per cent for the quarter, was a bright spot. Louvet pointed out that although China only accounts for 8 per cent of the company’s overall sales, he sees a lot of room for expansion. Additionally, Picicci highlighted Shanghai, Seoul and Tokyo as places where the brand’s core is truly connecting.
Louvet emphasised the importance of less price-sensitive consumers, pointing out that younger, more valuable and less price-sensitive consumers drove the brand’s new customer acquisition. According to Picicci, this will continue to be the approach going ahead.
Ralph Lauren now projects constant currency revenues to rise by roughly 3 to 4 per cent for fiscal 2025, which is an improvement above its previous estimate of 2 to 3 per cent. Picicci also said that the timing of this year’s Thanksgiving and Christmas holidays, including a shortened holiday selling window and a change in the dates of post-Christmas sales at North American shops, is anticipated to have a negative effect on the third quarter.
