Ralph Lauren announced on Thursday that sales in the first quarter of fiscal 2027 were up 13% year-on-year to $2 billion, on a constant currency basis, as it continues to beat internal and analyst expectations. Shares shot up 20% following the results.
“We are off to a strong start in the second year of our Next Great Chapter: Drive plan, with broad-based performance across geographies, channels, and consumer segments in the first quarter,” president and CEO Patrice Louvet said in the earnings release. “Our iconic brand is resonating around the world, and we continue to invest behind the long-term strategic priorities that will drive further sustainable growth and value creation into the future — from recruiting new and younger consumers to strengthening our core and high-potential categories and developing our key city ecosystems.”
By region, North America and Asia led growth, with revenues up 13% to $740.3 million and 25% to $589 million, respectively. Europe grew 5% to $594 million, led by Germany, Italy and Spain. Store traffic in Europe was impacted by the broader macro environment, according to CFO Justin Picicci, but the company continued to outperform market trends with increased conversion rates and basket sizes as a result of ongoing brand elevation and enhanced consumer engagement.
Growth in Asia was spurred by core markets like China, up 40% year-on-year and standing in contrast to the rest of the industry, where the market dragged on quarterly results. The brand unveiled the country’s first flagship store in Chengdu in April as part of long-term expansion plans. Beyond the China outpost, 21 new Ralph Lauren or partner stores opened in locations including The Grove in LA, Stanford Shopping Center in Palo Alto, and Istanbul.
Direct-to-consumer (DTC) sales increased 12% in Q1, driven by digital and bricks-and-mortar selling, while wholesale numbers rose 13% on “healthy underlying demand”. Ralph Lauren recruited 1.5 million new consumers through its DTC businesses and gained over 70 million social media followers, led by engagement on Instagram, Line, Douyin, and TikTok.
Louvet highlighted Ralph Lauren’s collaboration with the US Postal Service (USPS) on a series of commemorative stamps celebrating America’s 250th anniversary, as well as its global A Sporting Life campaign, among successful engagement drivers.
Looking to the full year, the company raised its revenue outlook to around 5-6% (4-5% previously) on a better-than-expected Q1, but “remains on offence” amid an uncertain geopolitical environment. Despite the brand’s 60th anniversary taking place in the second half of the year, gross and operating margin are anticipated to be stronger in H1, “largely due to the timing of key marketing activations relative to the prior year and our current tariff assumptions, which remain subject to change”, Picicci said during the call.
