Increasing demand for Ralph Lauren’s Polo T-shirts and tweed jackets in China is helping the high-end retailer gain higher profits.
The company announced that it beat quarterly profit estimates which resulted in the share prices rising by a whopping 14 per cent.
Luxury and high fashion brands from all over the world are expanding in China as weakening of Yuan is refraining them from travelling abroad and shopping.
Ralph Lauren has also partnered with Chinese e-commerce giants such as Alibaba’s Tmall and WeChat to boost online sales.
The company says that the earnings from Asia, which rose by 4 per cent, were a result of their efforts for online expansion, increasing store count and marketing initiatives featuring local celebrities.
Although revenue in the Chinese mainland grew by 22 per cent, Hong Kong fell behind with a 27 per cent lower revenue in the second quarter due to ongoing protests.
Ralph Lauren has revamped their marketing strategies to focus more on Instagram and new pop-culture-based apparel, including a collection celebrating the 25th anniversary of the hit TV show ‘Friends’.
These have helped Ralph Lauren tap a new generation of customers and boost sales.
The company’s adjusted net income rose 6.5 per cent to US $ 198 million, or US $ 2.55 per share, in the quarter ended 28 September. Analysts had expected a profit of US $ 2.39 per share, according to IBES data from Refinitiv.
Net revenue rose about 1 per cent to US $ 1.71 billion, beating analysts’ average estimate of US $ 1.69 billion.