Ralph Lauren Corp - Class A
Q1 2027 Earnings
Excludes $24.8 million in restructuring and other charges, net, including $20.8 million in Next Generation Transformation project charges, $3.0 million in restructuring plan charges, and $1.0 million in cease-use rent expenses, partially offset by $1.3 million in non-routine bad debt expense reversals
Market Reaction
Did RL Beat Earnings? Q1 2027 Results
Ralph Lauren delivered a standout first quarter of Fiscal 2027, beating Wall Street expectations on both the top and bottom lines and extending its EPS beat streak to five consecutive quarters. Adjusted EPS of $4.59 cleared the $4.32 consensus estimate by 6.15%, while revenue of $1.96 billion topped expectations by 5.19% and climbed 14.0% year over year, powered by an exceptional performance in Asia, where China alone surged more than 40% and comparable store sales for the region rose 23%. The engine behind the outperformance was disciplined pricing, with average unit retail up 15% and full-price selling trending well above plan, helping adjusted operating margin expand 170 basis points to 18.7%. Management responded to the strong start by raising its full-year constant currency revenue growth outlook to approximately 5%-6%, up from prior mid-single-digits guidance, and now expects adjusted operating margin to expand 60-80 basis points for the year, even as tariff pressures are expected to build in the second half. With peers across the apparel sector navigating their own cost headwinds, Ralph Lauren's pricing power and geographic diversification appear to be meaningful differentiators heading into the rest of the fiscal year.
- 15% Average Unit Retail (AUR) growth across DTC network driven by continued brand elevation and strong full-price selling
- Global DTC comparable store sales increased low-double-digits driven by both digital and brick-and-mortar channels
- Asia revenue led growth at 24% reported, with China up more than 40%
- North America wholesale accelerated to 22% growth including benefit from resumed luxury account shipments
- High-potential categories (Women's Apparel, Outerwear, Handbags) grew more than 20% in constant currency
- Core business up mid-teens
- 1.5 million new consumers acquired in DTC businesses
- Gross margin expansion of 140 basis points driven by AUR growth and favorable channel/geographic mix
“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 — exceeding our expectations and driving an increase in our full year Fiscal 2027 outlook.”
Ralph Lauren CEO, on the earnings call
Forward Guidance & Outlook
For full year Fiscal 2027, the company raised its constant currency revenue growth outlook to approximately 5%-6% on a 52-week comparable basis (up from prior mid-single-digits guidance), reflecting stronger-than-expected Q1 results. The 53rd week is expected to add approximately 1 point to revenue growth. Foreign currency is expected to negatively impact revenue growth by approximately 50-100 basis points. Adjusted operating margin is now expected to expand approximately 60-80 basis points in constant currency (increased from prior outlook), driven by gross margin expansion and operating expense leverage, with stronger expansion in the first half due to timing of marketing activations and a lower prevailing tariff rate. FX is expected to have a roughly neutral impact on margins. For Q2, revenue is expected to grow approximately 5%-6% in constant currency, with FX headwinds of 100-150 basis points. Q2 operating margin is expected to expand 80-100 basis points in constant currency. Full year tax rate is expected at 21%-22%, with Q2 at approximately 19%-20%. Capital expenditures are expected at approximately 4%-5% of revenue.
RL YoY Financials
RL Revenue by Segment
RL Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.