Ralph Lauren Q3 smashes expectations; raises outlook

Ralph Lauren Corp. reported third-quarter results that blew past expectations as its efforts to transform its business showed big results.

The luxury fashion brand reported net income of $217.7 million, or $2.93 per share, for the quarter ended Dec. 25. up from $119.8 million, or $1.61 per share, in the year-ago period. Adjusted EPS of $2.94 easily topping analysts’ estimates for $2.18.

Revenue rose 26.7% to $1.8 billion, way ahead of estimates for $1.645 billion. All regions reported double-digit revenue growth. North America revenue increased 30% to $929 million. Comparable store sales in North America were up 38%, with a 40% increase in physical stores and a 32% increase in digital commerce.

The company said its “digital ecosystem” revenues grew more than 40% during the quarter, with strong momentum across both owned and wholesale digital channels globally. During the holiday period, the brand ran a holiday-themed digital promotion on the popular gaming site Roblox.

“Our better-than-expected results across all three regions are a testament to the outstanding work our teams have done to fundamentally reposition our business, elevate our brand and pivot to offense — including in North America, where our turnaround is well underway,” stated president and CEO Patrice Louvet. “With our significant reset work behind us, we are encouraged that our long-term growth is supported by multiple engines - from geographic and channel expansion to recruiting new high-value consumers and developing high-potential product categories.”

Earlier this week, Ralph Lauren entered into a limited partnership with asset manager Franklin Templeton to invest in innovative consumer technology companies, with a focus on women-led firms.

The company's board authorized a new $1.5 billion share repurchase program, adding to the $280 million available and bringing the total to $1.78 billion.

For fiscal 2022, Ralph Lauren now expects constant currency revenue