Ralph Lauren Q1 income, sales rise to top Street amid growth in Europe
Ralph Lauren maintained momentum in its first quarter with better-than-expected revenue and earnings, fueled largely by growth abroad.
The luxury brand reported net income of $168.6 million, or $2.61 a share, for the quarter ended June 29, up from $132.1 million, or $1.96 a share, in the year-ago period. Adjusted earnings were $2.70 per share, way ahead of analysts’ estimates of $2.48 per share.
Net revenue inched up 1% to $1.51 billion from $1.50 billion, also topping estimates. Same-store sales increased a better-than-expected 5%.
In North America, revenue decreased 4% to $608 million. Comparable store sales increased 1%, with a 3% increase in brick and mortar stores more than offsetting a 4% decrease in digital commerce, the company said.
North America wholesale revenue decreased 13%, driven by receipt timing shifts and a reduction in excess product sales to the off-price wholesale channel as planned.
In Europe, revenue increased 6% to $479 million on a reported basis and 7% in constant currency. Comparable store sales increased 8%, with a 7% increase in brick and mortar stores and a 14% increase in digital commerce. It ended the quarter with 103 directly operated stores in the region.
Europe wholesale revenue increased 5% to prior year on both a reported and constant currency basis, with stronger re-order trends more than offsetting negative impacts from previously disclosed timing receipt shifts.
In Asia, revenue increased 4% to $391 million. Comparable store sales in Asia increased 9%, with a 7% increase brick and mortar stores and a 21% increase in digital commerce.
Ralph Lauren ended the quarter with a total of 565 directly operated global stores and 697 concessions.
"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 CEO. "The powerful combination of our brand strength and diverse growth drivers – together with our culture of agility and operating discipline – gives us confidence that our long-term strategy will continue to deliver even through these dynamic times."
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For fiscal 2025, Ralph Lauren reaffirmed its guidance for revenue to increase approximately low-single digits year-over-year on a constant currency basis, to around 2% to 3%. Based on current exchange rates, foreign currency is now expected to negatively impact revenue growth by approximately 150 basis points in fiscal 2025, the company said.
For the second quarter, Ralph Lauren expects constant currency revenues to grow approximately low- to mid-single digits to last year, to around 3% to 4%.
