Timeless Style At Ralph Lauren Sees Brand Buck Luxury Sector Woes

In an ever changing and increasingly unpredictable world, classic American design and timeless heritage appears to have won the day, judging by some impressively solid figures from Ralph Lauren Corp.

The company bucked global luxury jitters yesterday as it reported that it had continued to maintain momentum in its second quarter, detailing growth across all regions and an increase in its average unit retail price.

Indeed, Ralph Lauren , who started his eponymous brand by selling ties at department store Bloomingdale's, New York not far from its current Madison Avenue offices, is achieving its best performance in years.

The retailer was especially boosted by a strong performance in Europe and Asia, plus bullish expectations over domestic holiday season sales, while it prepares to ramp up operations especially in China where – unlike many other luxury labels – it continues to see strong sales growth year-on-year.

Ralph Lauren now expects fiscal 2025 revenue to grow 3% to 4% on a constant currency basis, up from previous guidance of 2% to 3%.

Net income totaled $147.9 million for the quarter ended Sept. 28 , a small uptick from the $146.9 million it recorded for the year-ago period on revenues of $1.726 billion, better than the $1.681 billion analysts had forecast and up from the $1.633 billion reported last year. Sales increased 3% in North America and a healthy 7% in Europe, with stronger direct-to-consumer sales compensating for a widely expected decline in its wholesale division.

That came after the company wrested control of its distribution network by reducing its reliance on wholesale accounts in the U.S. and expanding its retail footprint, particularly in Asia. It also doubled its marketing budget to 7% of total revenues, which Ralph Lauren President and CEO Patrice Louvet said had enabled the company to "tell a much broader story on many different platforms".

Ralph Lauren Global Sales

At the same time, the company has also been on an "elevation journey" across its product, storytelling, and consumer experience in-store and online for the past several years, investing in quality and design, which has allowed it to launch new products at higher value.

Global same-store sales rose 10%, driven by positive numbers across all regions. Same-store sales rose 6% in North America, with a 9% jump in brick-and-mortar stores more than compensating for a 2% decrease in digital commerce.

But Asia was the star. Revenues were up by 9% to $380 million, while comparable store sales in Asia increased 11%, with a 10% increase in stores and a 19% increase in digital commerce, notably with sales in China up by what Ralph Lauren said was a low-teen percentage rise.

Revenue is still increasing in part because the brand has more room to grow as it currently only generates around 8% of global sales in China versus more than the circa 20% that many other premium global brands achieve, and the company plans to continue to expand its Chinese operations.

Ralph Lauren Stock Price

That's also good news for shareholders. While its stock value has dipped slightly after a spike immediately on the results announcement, at nearly $2.22 the share price is up by over half in the year to date and a stellar 90% compared with 12 months ago.

"Our teams are executing well on our long-term strategy, injecting energy and excitement behind our storied brand through what continues to be a choppy global operating environment," Louvet said. "Our strong business performance across every geography this quarter underscores the resilience of our diversified growth drivers and our elevated consumer base, giving us confidence to take up our financial outlook for the full fiscal year ahead of the all-important holiday season."

Ralph Lauren ended the second quarter with $1.7 billion in cash and short-term investments and $1.1 billion in total debt, compared with $1.5 billion and $1.1 billion, respectively, at the end of the second quarter of fiscal 2024.