Ralph Lauren’s sales increased 14% year-on-year on a constant currency basis to $2 billion in the second quarter of 2026, ended 27 September 2025, above its high-single-digit outlook. Growth was driven by a strong performance across all markets, including China.
Gross margin increased from 67% to 68%, driven by average unit retail (AUR) expansion, a favorable product mix and lower cotton costs, which offset tariff pressures. The company raised its outlook for fiscal 2026. It now expects revenue to increase between 5% and 7% in the full year, compared to its prior guidance of low to mid-single-digit growth, with Q3 revenues up mid-single digits.
“These results underscore our diversity of growth opportunities and the broad-based momentum of our iconic brand, which is resonating across generations, cultures and geographies,” said CEO Patrice Louvet on Thursday’s earnings call. “Our strong performance through the first half of this fiscal year also gives us confidence to take up our full-year guidance once again, even as we remain relatively cautious in the second half of the year due to potential consumer headwinds and general volatility, while we are watching the macro environment closely.”
In September, Ralph Lauren introduced its latest strategy, Next Great Chapter: Drive, which focuses on three pillars: elevate and energize the brand’s positioning to propel new customer acquisition and retention; drive core products while expanding into new categories; and win in 30 top cities while developing across 20 geographical targets. “When you look at our market share — less than 2% market share in a growing total addressable market of around $400 billion — building awareness is a vector of growth that will help us expand,” the executive said.
Sales grew double-digits in all geographies. Sales in Asia rose 16%, while sales in Europe grew 15%. In China, revenue increased more than 30% compared to the same period last year, driven by a favorable comparison basis and new customer recruitment. North American sales increased 13%, with balanced growth across direct-to-consumer (DTC) and wholesale.
“We still have a lot of distribution opportunities globally, whether that’s deepening our presence in the existing top 30 key cities in China or Western Europe, to what we’ve started doing by opening new stores in the Bay Area and the Pacific Northwest here in the US,” said Louvet. “Our consumer continues to show up for our brand, and even as we navigate the macros, our business model is resilient with multiple drivers of growth and we will continue to stay on the offense to deliver on our long-term Drive plan.”
Ralph Lauren acquired 1.5 million new consumers via its DTC business. AUR across DTC grew 12%, above analyst expectations, reflecting the company’s strong full-price sales, a result of its elevation strategy. The company opened 38 stores in the quarter, including owned stores and launches at third-party retailers.
The core business grew in the mid-teens, driven by strength in cable-knit wool, cashmere, cotton, sweaters, linen and seasonal Oxford shirts. Its high-potential categories — womenswear, outerwear, handbags — outperformed with strong double-digit growth.
Ralph Lauren introduced some “modest” price increases for fall and spring 2026 in response to tariffs, CFO Justin Picicci said. The company is continuing to sharpen its price value proposition in this context. “We have a proven multi-year elevation strategy that’s driven sustained AUR gains, which is driven by multiple levels — investing in our brand; attracting more full-price customers; elevating our product mix, stable channel mix and pulling back on discounts; and strategic pricing actions,” he added. “We continue to see customers recognize and respond to the value we’re delivering.”
