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Alsharq Tribune- Gina Issa
Ralph Lauren raised its annual revenue forecast on Thursday, signaling robust demand from affluent shoppers for its Polo shirts and cable-knit sweaters in North America, Europe and China.
Shares of the apparel maker rose 2% in premarket trading as it also beat first-quarter revenue and profit expectations. Ralph, which sells its popular Polo Bear sweater for up to $398 on its website, has relied on its loyal, high-income customers to fuel sales and profit growth, Reuters reported.
The company's strategy to ramp up marketing spend and product innovation, as well as reduce promotions have helped it gain market share in its core categories such as knitwear and handbags.
CEO Patrice Louvet said the company remains cautious about the global operating environment in the back half of the fiscal year.
"We're encouraged by RL's recent launches and believe the campaign can build on the brand's summer momentum, notably its presence at Wimbledon," Jefferies analyst Ashley Helgans wrote in a note. Ralph is an official outfitter for the tournament that began in mid-July.
The company's strong quarter underlines consumer preference for accessible luxury brands, similar to Tapestry, which has seen solid demand for its Coach handbags.
Tapestry will report quarterly earnings next week.
Ralph Lauren's upbeat forecast, however, is in contrast to bigger European rivals such as Gucci-owner Kering and Dior-parent LVMH, which have seen a sales slowdown.
The company expects fiscal 2026 revenue to rise low- to mid-single digits from last year, compared with its prior target of a low-single digits increase.
Operating margin is forecast to expand roughly 40-60 basis points after adjusting for currency fluctuations, up from its prior forecast of a modest growth.
Its net revenue in the first quarter came in at $1.72 billion, exceeding expectations of $1.66 billion, according to data compiled by LSEG.
On an adjusted basis, it earned $3.77 per share, above estimates of $3.50, aided by a 14% jump in average unit retail in its direct-to-consumer channel.
