Luxury clothing line Ralph Lauren reported a beat on Q4 and FY25 earnings by 8%, driven by double-digit growth in Europe and Asia and strong direct-to-consumer (DTC) sales.
Revenue beat expectations with an 8% year-over-year gain to $1.7 billion for the quarter, while full-year revenue grew 7% to $7.1 billion.
Adjusted earnings per share (EPS) came in at $2.27 for the quarter and $12.33 for the year - well ahead of analyst expectations.
Gross margin improved 200 basis points in Q4 to 68.6%
Adjusted operating margin expanded to 10.3% in Q4 and 14% for the full year - up 150 basis points from FY2024.
Sales:
- North American sales rose 6% in Q4, supported by a 9% increase in U.S. retail comparable sales
- Europe delivered 12% revenue growth, helped by tourism
- Asia sales rose 9%, led by China, Japan, and Korea
DTC comparable sales were up 13% in Q4 and 10% for the year, with the company adding 5.9 million new DTC customers over the year through targeted marketing campaigns.
The company returned $778 million to shareholders in FY2025, including $425 million in share buybacks, as well as increased its annual dividend by 10% to $3.65 per share.
Forecast
Looking ahead, the clothes brand expects FY2026 revenue to grow in the low-single-digits on a constant currency basis, with growth weighted toward the first half.
Gross margin is projected to remain roughly flat, while operating margin is expected to expand modestly.
For the next quarter, the company forecasts high-single-digit revenue growth and 150–200 basis points of margin improvement.
“As we enter Fiscal 2026, we remain on offense - with a focus on driving our multiple engines of growth across lifestyle categories, geographies, and channels,” Ralph Lauren President and CEO Patrice Louvet said.
“At the same time, we will stay agile and prudent - leaning into our diversified supply chain, operating discipline, and strong balance sheet as we manage through ongoing macroeconomic uncertainty."
Ralph Lauren (NYSE : RL) rose 1.29% on trade, swapping for US$277.42 per share.
