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Ralph Lauren said sales in 2024 grew 3 per cent to $6.6 billion, exceeding expectations, thanks to its push upmarket and pull back on promotions. Shares were up 2.6 per cent on Thursday morning.
“Supported by our increasing brand desirability and multiple engines of growth, this year’s performance underscores the strength of our long-term strategy, even as we navigate a highly dynamic global operating environment,” president and CEO Patrice Louvet said.
The American brand expects revenue to grow 2 to 3 per cent on a constant currency basis in 2025, with Q1 revenues predicted to be up slightly on last year based on constant currencies. The company said gross and operating margins are on track to meet the long-term targets set out in its ‘Next Great Chapter: Accelerate’ plan, a three-year strategy formed in 2022 to deliver long-term growth and value creation, driven by both purpose and people.
The top-line guidance “falls short of consensus”, though the “operating margin is in line”, said Telsey Advisory CEO Dana Telsey in a note, adding that the expectations are “reasonable and attainable”.
“Looking ahead to fiscal 2025, we are staying on offence by continuing to invest in our brand, our portfolio of iconic core products and our consumer-centric ecosystems in top cities globally,” said Louvet. “This focus — combined with our culture of operating discipline and the agility and dedication of our passionate teams — will continue to fuel our sustainable growth and value creation into the future.”
The company also announced today that Justin Picicci has taken over as chief financial officer after a multi-year, strategic succession plan. Jane Nielsen, who served as CFO since 2016 and added the title of COO in 2019, will remain as COO until March 2025.
Fourth-quarter revenue was up 3 per cent in constant currency to $1.6 billion. Net income in Q4 increased from $61 million in 2023 to $91 million.
Asia led performance for the full year, growing 14 per cent in constant currency, with China delivering over a quarter of that growth. Europe saw a 3 per cent revenue increase on a constant basis, while North America dropped 2 per cent.
Direct-to-consumer (DTC) sales rose 6 per cent in the full year, driven by full-price sales and an 11 per cent growth in average unit retail (AUR). The brand recruited over five million new customers via its DTC channels this year, following record holiday customer acquisition and an increase in social media followings. Ralph Lauren’s core business delivered high single-digit growth in the full year driven by momentum across women’s, outerwear and home.
According to Telsey, the increase in AUR reflects the “success, in our view, of management’s efforts to invest in the brand and attract new, younger, high-value consumers”.
“Our brand has always been about inspiring people to live the life of their dreams,” said executive chairman and chief creative officer Ralph Lauren. “We marry elegance and style in aspirational worlds — from our recent fashion show featuring elevated classics to the vibrant home line we showcased last month in Milan — our teams around the world are delivering our vision with passion and care.”
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