Ralph Lauren shares surged 6.7% on Thursday following the company's fiscal second-quarter earnings, which exceeded Wall Street expectations and prompted an increase in its full-year revenue forecast.
For the quarter ending Sept. 28, the New York-based fashion house reported net income of US$147.9 million (A$221.5 million), up from $146.9 million during the same period last year.
Excluding one-time items, adjusted earnings per share (EPS) reached $2.54, topping the $2.42 expected.
Revenue rose to $1.73 billion from $1.633 billion a year ago, also surpassing expectations of $1.68 billion.
North American same-store sales grew 6%, exceeding the expected 2.8% increase.
Chief Executive Patrice Louvet highlighted the company’s momentum despite global economic challenges, stating, "Our teams are executing well on our long-term strategy, injecting energy and excitement behind our storied brand, through what continues to be a choppy global operating environment."
"Our strong business performance across every geography this quarter underscores the resilience of our diversified growth drivers and our elevated consumer base, giving us confidence to take up our financial outlook for the full fiscal year ahead of the all-important holiday season."
Global direct-to-consumer same-store sales rose 10%, with all regions posting positive results. Ralph Lauren’s profile received an added boost from its role as the official outfitter of Team USA at the Paris Summer Olympics and sponsorships of Wimbledon and the U.S. Open Tennis championships.
Average unit retail (AUR) rose 10% across the direct-to-consumer network, beating company forecasts.
In geographic performance, Asia led with a 9% revenue increase, with China posting growth in the low teens. European sales climbed 7%, while North American sales rose 3%, with strong direct-to-consumer sales offsetting an expected decline in wholesale.
The company ended the quarter with $1.7 billion in cash and short-term investments, along with $1.1 billion in total debt.
Ralph Lauren now anticipates fiscal 2025 revenue to increase by 3% to 4% in constant currency, up from its prior guidance of 2% to 3%. For the third quarter, it projects similar revenue growth of 3% to 4% in constant currency.
Operating margin is expected to expand by 110 to 130 basis points, revised upward from previous guidance of 100 to 120 basis points.
Year-to-date, Ralph Lauren’s stock has gained 54%, outperforming the S&P 500's 24% gain.
As at 7:10 am (AEDT), Friday, November 8, Ralph Lauren (RL) stock was trading at $221.89, showing a significant increase of 6.7% from the previous close of $208.04. The stock reached a day low of $216.87 and a day high of $237.16. Ralph Lauren's market cap stands at $13.75 billion.