Dive Brief:
- Ralph Lauren Corporation posted a third quarter net revenue of $2.1 billion for fiscal 2025, up 11% year over year and beating the company’s estimates, according to a Thursday release.
- Global DTC sales were up nearly 12%, and global wholesale was up nearly 9% for the period. Revenue in Europe and Asia was up 16% and 14%, respectively, with China in particular up by more than 20%. North America revenue grew 7%.
- Due to the strong results, the company raised its fiscal 2025 outlook to 6% to 7% growth in constant currency, up from its second quarter projections of between 3% to 4% growth.
Dive Insight:
While competing luxury firms including LVMH and Burberry reported year-over-year single-digit revenue drops last month, Ralph Lauren has bucked the trend with robust holiday sales and improvements across every region.
“Our teams around the world executed very well across geographies, channels, and categories this holiday to deliver on our long-term, Next Great Chapter: Accelerate strategy,” Patrice Louvet, president and CEO, said in the release. “We are encouraged by this quarter’s strong performance, and we continue to be sharply focused on what’s ahead.”
Although the company has been outpacing the rest of the market for some time, this quarter’s results “represent a widening of the gap between the iconic brand and the rest of the pack,” Neil Saunders, managing director of GlobalData, said in emailed comments.
He attributed the success to several factors, including the brand’s ability to stay true to its heritage.
“This quieter approach to luxury is playing well as consumers are more amenable to investing in premium pieces that have longevity and which they will, therefore, get value out of,” Saunders said.
He added that consumers, especially in the U.S., are willing to invest in more expensive clothing and accessories, particularly around the holidays, and that Ralph Lauren “did an excellent job of interpreting this desire” by offering understated, elegant pieces that resonated with consumers.
Ralph Lauren has made its brand engagement a priority, Saunders said.
“Initiatives like holiday pop-up events in key cities worked well, as did the broader marketing and advertising campaigns,” Saunders said, adding that these efforts helped Ralph Lauren stay top-of-mind for consumers and increased DTC sales, especially with younger shoppers.
“Looking ahead, some of the heat of the holiday season will dissipate, so it is unreasonable to expect final quarter growth to be as punchy,” Saunders said. “However, this quarter’s gains will add to the satisfactory performance of prior quarters and will enable Ralph Lauren to round off its fiscal year in style.”
