Ralph Lauren results top estimates as shoppers snap up Polos, pricey sweaters
RALPH Lauren beat profit estimates and reported a surprise rise in fourth-quarter revenue on Thursday (May 25) as its new seasonal collections resonated with affluent shoppers at a time when luxury spending has cooled in the US.
The company’s shares rose nearly 8 per cent after it also posted a more than 30 per cent jump in sales in China, with demand in the key luxury market rebounding sharply.
While overall US luxury spending has taken a hit, Ralph Lauren’s moves to double down on its outdoor wear and women’s clothing collections have drawn more shoppers.
Strong demand for its cable-knit sweaters and Polos have also helped the company keep promotions minimal, with quarterly revenue in North America, its biggest market, decreasing a smaller-than-expected 3 per cent.
Ralph Lauren’s core higher-income customer base has been resilient, even in North America, chief executive Patrice Louvet said.
“(The) more value-oriented consumers are a smaller part of our customer base and getting smaller and smaller, as we bring in more higher-value consumers.”
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Meanwhile, luxury companies ranging from LVMH and Gucci-owner Kering to Coach handbag maker Tapestry have flagged softer demand in the US.
“Ralph Lauren has been running a really good business on all fronts, so even in a volatile sort of time, they’ve been able to have a decent performance,” said Jessica Ramirez, senior analyst at Jane Hali and Associates.
The company’s Asia segment revenue rose 13 per cent to US$390 million.
Fourth-quarter net revenue increased 1 per cent to US$1.54 billion, compared with analysts’ estimates of a drop to US$1.47 billion, according to Refinitiv IBES data.
Excluding items, Ralph Lauren earned 90 cents per share, beating estimates of 61 cents.
The company forecast fiscal 2024 revenue to increase in the low-single digit range, on a constant currency basis. Analysts are expecting a 5.6 per cent rise to US$6.73 billion. REUTERS
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