Ralph Lauren raised its annual revenue forecast on Thursday as the apparel maker bet on younger shoppers picking up its spring collection of dresses, floral dinner jackets and Polo shirts, sending its shares up 15 percent.
Unlike European fashion houses Hugo Boss and Kering, Ralph Lauren has enjoyed strong demand as its investments in brands such as Polo and Purple Label helped pull in wealthy shoppers, especially from the younger demographic in North America.
For the first time in the last couple of years, Louis Vuitton handbags owner LVMH had also hinted at seeing a stable US consumer and said in January it was considering widening its footprint in the region.
Ralph Lauren’s wholesale business in North America recorded a 6 percent growth in third-quarter revenue, underscoring a recovery after several quarters of muted sales.
According to Dana Telsey of Telsey Advisory Group, Ralph Lauren has the right strategies in place, including elevating the brand and winning in key cities while expanding in under-penetrated categories to deliver topline growth.
The company now expects 2025 revenue to increase between 6 percent and 7 percent, compared with its prior forecast for a 3 percent to 4 percent rise.
“With regards to the recently announced U.S. tariffs on goods from China, Mexico, and Canada, we currently anticipate a minimal annual impact,” CFO Justin Picicci said in a post-earnings call.
Quarterly sales jumped 10.8 percent to $2.14 billion, trumping analysts’ estimates of $2.01 billion, according to data compiled by LSEG.
Excluding items, it earned $4.82 per share, beating expectations of $4.49.
Ralph Lauren has also recorded robust demand from China over the last two years, with revenue in the region up more than 20 percent in the quarter owing to e-commerce expansion on the Douyin platform and the opening of full-price stores.
China accounts for about 8 percent of the company’s total sales.
Tabby handbag maker Tapestry also reported on Thursday that strength in China and North America had helped lift its annual forecasts.
By Ananya Mariam Rajesh; Editing by Devika Syamnath
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Ralph Lauren raised its annual revenue outlook to 3-4 percent, driven by strong sales in Europe, Asia, and robust growth in China, while forecasting a solid holiday season.
