Ralph Lauren said third-quarter revenues were up 11 per cent year-on-year to $2.1 billion. The results beat brand and analyst expectations, prompting the company to raise its full-year outlook. Shares shot up 14 per cent during Thursday trading.
“We entered this important quarter with a clear game plan and strong brand and product momentum,” CEO Patrice Louvet told investors on Thursday. “Our strong first-half brand momentum and strategic investments carried into the autumn holiday season, driving better-than-expected consumer demand in each channel. And the agility of our global supply chain enabled us to meet the upside to demand during the quarter.”
Louvet called out the brand’s direct-to-consumer (DTC) channels as a “strong indicator” of growing desirability. DTC makes up two-thirds of the Ralph Lauren business, with global DTC revenues up 12 per cent in Q3. This year-on-year increase beat expectations, up from a 9 per cent increase the year prior. Ralph Lauren also acquired 1.9 million new consumers, up low-single digits year-on-year. “This continued to be led by younger, higher value and less price sensitive cohorts,” Louvet said.
Wholesale also fared better than in past quarters. In North America, it returned to growth, with revenues up 6 per cent year-on-year. “We are especially encouraged by our return to growth in wholesale this quarter,” CFO Justin Picicci said on the call. It was “a little faster, a little stronger” than the company had anticipated, he added.
Overall, North America revenues were up 7 per cent to $998 million. “We’re encouraged that each of our North American channels is contributing to our growth,” Picicci said, referring to upticks in DTC, digital and wholesale.
Europe revenues increased 16 per cent to $604 million. All of Ralph Lauren’s key markets delivered growth in the quarter, Picicci said, led by double-digit revenue growth in Germany, France, Italy and Spain. The brand also returned to growth in the UK.
Asia revenues were up 14 per cent to $507 million. China was a standout, up over 20 per cent — bucking the region’s sluggish sales across luxury. “[This was] driven by comp growth, high-quality new customer recruitment and key marketing moments, including our Very Ralph event in Shanghai and Singles Day live-streaming activations,” Picicci said. Sales in Japan were also strong, growing low-double digits. The region also led the brand’s store growth, including in Hong Kong and Beijing (both stores feature Ralph’s Coffee).
Picicci briefly acknowledged the recently announced US tariffs on goods from China, Mexico and Canada (only the first of which have been implemented to date). “We currently anticipate a minimal impact,” he told investors. “Our teams continue to leverage our agile and diversified supply chain to manage through global industry disruptions.”
It echoed Tapestry’s response to the tariffs. The New York company hosted its call an hour before Ralph Lauren’s, wherein chief financial and operating officer Scott Roe said that the company expected tariffs to have “an immaterial impact on fiscal 2025 results”. Like Ralph Lauren, Tapestry reported strong results, up 5 per cent year-on-year (with Coach up 10 per cent), signalling continued momentum in the accessible luxury market.
Looking forward, Ralph Lauren expects fiscal 2025 revenues to increase 6 to 7 per cent — up significantly from the 3 to 4 per cent growth it projected last quarter (which, too, was raised from the quarter prior). For the fourth quarter, the brand also expects revenues to grow between 6 and 7 per cent.
“Our outlook remains based on our best assessment of the current geopolitical backdrop as well as the macroeconomic environment,” Picicci said. “This includes inflationary pressures, tariffs and other consumer spending-related headwinds, supply chain disruptions and foreign currency volatility, among other considerations.”
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