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Ralph Lauren’s revenues reached $1.7 billion in the first quarter of 2026, up 11 per cent year-on-year on a constant basis, driven by broad-based success across geographies, including China.
Revenues were above the company’s expectations of a high-single-digit sales growth. Gross margin was 72.3 per cent, also beyond expectations, thanks to the demand for full-price items and more discipline over expenses, which offset an increase in marketing expenses.
“We are encouraged by our strong start to the fiscal year, with first-quarter results that exceeded our expectations across the top and bottom line in the midst of a highly dynamic global operating environment,” said Ralph Lauren CEO Patrice Louvet in a call with analysts. “Our growing brand desirability, diversified drivers of growth and muscles of organisational agility and executional excellence are standouts as we continue to deliver on our long-term strategic priorities.”
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Ralph Lauren raised its full-year outlook for fiscal 2026: it now expects revenues to increase low to mid-single digits. In Q2, the company expects high-single-digit revenue growth. “Even as we remain cautious in the second half of the year due to the potential tariff-related pressures on broader consumer behaviour, despite macro headwinds we remain well positioned and we are on offense based on our continued commitment to invest behind our brands and market share gains,” said Louvet. Shares dropped nearly 7 per cent on Thursday morning in response to the pressure tariffs are expected to have on margins in the second half of the year.
First-quarter revenues were led by double-digit growth in Asia and Europe. Sales in Asia grew 19 per cent across all key markets, including China where sales were up more than 30 per cent. Ralph Lauren called out the success of its re-see event in Shanghai, its first-ever fashion show in China recreating its Spring/Summer 2025 Hamptons show, along with its live-shopping event hosted on Douyin. Japan, the company’s largest Asian market, saw high-teens growth. Sales in Europe increased 16 per cent year-on-year, led by Germany, France, Italy and Spain.
North America reported 8 per cent sales growth. Anticipating the challenges with the US tariff landscape, the company has been focusing on managing cost inflation headwinds, including its “significantly diversified supply chain and ability to flex across production countries while maintaining standards, partnering with suppliers to drive efficiencies in the cost of goods and broader supply chain operations, and taking selective pricing actions and strategic discount reductions”, CFO Justin Picicci said. The company noted it has been using AI for inventory and supply chain management. While Ralph Lauren has intentionally increased its inventory levels to protect from tariff-related headwinds, it expects inventory levels to moderate throughout the year.
Direct-to-consumer (DTC) comparable store sales grew 13 per cent in Q1. Wholesale sales increased 9 per cent. The company plans to exit 90 to 100 wholesale stores in 2026, approximately half of them related to Canadian retailer Hudson’s Bay, which was narrowly saved from liquidation earlier this year. The company acquired 1.4 million DTC customers, while average unit retail (AUR) increased 14 per cent across DTC, particularly among women and Gen Z consumers. Ralph Lauren’s core business, including polo shirts, knitwear, blazers, caps and button-down shirts which accounts for over 70 per cent of sales, saw sales increase 20 per cent year-on-year.
Louvet highlighted that the brand’s designs deliver a strong value proposition during a tougher consumer environment. The company will reveal its updated strategy at its investor day in September, but highlighted uncertainty around how sensitive the consumer will be to price throughout the year. “[The quality and timeless style of the products] is more important than ever, as consumers look to brands and styles that they know and trust, which will last and deliver a compelling value proposition. Our growing value perception, together with our strong pricing power gives us confidence in our ability to continue on our elevation journey,” Louvet said.
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