Core Insights - Ralph Lauren reported revenue of $1.7 billion for the quarter ended March 2025, reflecting an 8.3% increase year-over-year and a surprise of +3.83% over the Zacks Consensus Estimate of $1.63 billion [1] - The company's EPS for the quarter was $2.27, up from $1.71 in the same quarter last year, resulting in an EPS surprise of +13.50% compared to the consensus estimate of $2.00 [1] Revenue Performance - North America net revenues were $704.70 million, exceeding the average estimate of $690.73 million, with a year-over-year change of +5.5% [4] - Other Licensing net revenues were $35.50 million, slightly above the average estimate of $35.47 million, but down -3.3% year-over-year [4] - Asia net revenues reached $431.60 million, surpassing the average estimate of $424.40 million, marking a +9.5% year-over-year increase [4] - Europe net revenues were $525.50 million, exceeding the average estimate of $494.79 million, with a year-over-year change of +12% [4] - Retail net revenues totaled $1.06 billion, above the estimated $1.02 billion, representing an +11.4% change year-over-year [4] - Wholesale net revenues were $602.50 million, exceeding the average estimate of $585.58 million, with a +3.9% year-over-year change [4] Stock Performance - Ralph Lauren shares have returned +28.9% over the past month, outperforming the Zacks S&P 500 composite's +13.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Growth Strategy - The company has a long-term growth strategy for Fiscal 2023 to Fiscal 2025, focusing on brand elevation, core expansion, and winning in key cities[26]. - The company has a focus on returning the North America business to growth as part of its strategic goals[155]. Transformation Initiatives - The Next Generation Transformation Project is a multi-year initiative aimed at transitioning to a global direct-to-consumer model, with significant process improvements expected[36]. - The company has established a large-scale multi-year global project, the Next Generation Transformation project, aimed at transforming operations towards a direct-to-consumer model[121]. Financial Performance - Fiscal 2025 net revenues were approximately 57% generated outside the U.S., with North America contributing 43%, Europe 31%, and Asia 24%[57][61][62]. - The company incurred charges of $25.2 million and $5.1 million related to the NGT project during Fiscal 2025 and Fiscal 2024, respectively[37]. - Approximately 2% of Fiscal 2025 net revenues came from non-reportable segments, primarily from Ralph Lauren and Chaps branded royalty revenues[56]. Sustainability Efforts - The company emphasizes sustainability through initiatives like integrated circularity, sustainable materials, and waste management, aiming for zero waste principles[32]. - The company aims to reduce absolute greenhouse gas emissions and improve water stewardship across its operations and supply chain[32]. - The company is committed to advancing environmental sustainability in the fashion and textile industries through initiatives like the Fashion Pact[154]. Employee Well-being - The company is committed to enhancing employee well-being and fostering a culture of belonging and equity within its workforce[41]. - Starting January 2025, the company will provide free additional coverage for essential cancer screenings above national guidelines for U.S. employees[151]. - All part-time employees with one year of service will be eligible for benefits in calendar 2025, regardless of average hours worked[152]. - The company has a global wellness program, THRIVE, which includes access to physical and mental wellness support[146]. - The company is committed to competitive compensation and benefits, actively monitoring pay equity[149]. - The company aims to exceed an 80% employee survey score on "my manager creates a sense of belonging for the entire team"[141]. Product and Brand Portfolio - The company’s product portfolio includes luxury lifestyle products across five categories: apparel, footwear & accessories, home, fragrances, and hospitality[25]. - The brand portfolio includes well-known names such as Polo Ralph Lauren, Ralph Lauren Collection, and Double RL, reflecting a distinctive American lifestyle[39]. - The company’s products are designed to reflect a timeless and innovative interpretation of American style, contributing to brand strength and reputation[96]. Retail and Distribution - The retail business operates 564 retail stores and 671 concession-based shop-within-shops, totaling approximately 4.1 million and 0.7 million square feet respectively[59][62]. - During Fiscal 2025, 30 new Ralph Lauren stores were opened while 10 were closed, resulting in a total of 252 Ralph Lauren stores[60][62]. - The wholesale business sold products through over 9,400 doors worldwide, with approximately 3,000 in North America, 5,600 in Europe, and 850 in Asia[70][73]. - The company opened 6 new outlet stores and closed 26 during Fiscal 2025, resulting in a total of 312 outlet stores[63][64]. - The company’s distribution network includes multiple global facilities, ensuring efficient shipping and inventory management[115]. Digital Commerce Strategy - The digital commerce strategy includes direct sales through various websites and third-party partners, with a focus on expanding accessibility and localizing offerings[67][68]. - The company continues to invest in its digital ecosystem as a key component of its global omni-channel strategy, which includes owned and partnered channels across physical and digital platforms[87]. - Directly-operated digital commerce sites and mobile applications serve as digital flagships, enhancing consumer experience through new payment methods and improved search capabilities[88]. - The company continues to invest in Connected Retail capabilities, including features like Same-Day Delivery and Mobile Point of Sale[59]. Leadership and Management - Ralph Lauren has been the Executive Chairman and Chief Creative Officer since November 2015, and has been with the company since its founding in 1967[154]. - Patrice Louvet has served as President and CEO since July 2017, previously holding senior leadership roles at Procter & Gamble[154]. - Robert Ranftl became Chief Operating Officer in April 2025, previously leading operations in Asia Pacific and North America[155]. - Justin Picicci has been Chief Financial Officer since May 2024, overseeing internal finance functions and previously serving as CFO of North America[155]. - David Lauren, Chief Branding and Innovation Officer since April 2022, has been instrumental in growing the company's global digital commerce business[155]. - Halide Alagöz has been Chief Product Merchandising Officer since March 2025, responsible for the end-to-end product life cycle[155]. Marketing and Consumer Engagement - The company’s marketing strategies increasingly leverage digital and social media platforms to engage younger consumers and enhance brand recognition[100]. - The company collaborates with wholesale customers to deliver tailored content and leverage consumer insights for a holistic view of the consumer[89]. Market and Risk Management - The company continues to face challenges with trademark enforcement in certain parts of Asia[127]. - The company maintains a program of intensive monitoring of import restrictions and opportunities to minimize exposure to import-related risks[132]. - Market risk management strategies are discussed in the Annual Report on Form 10-K[422].

Group 1: Earnings Performance - Ralph Lauren reported quarterly earnings of $2.27 per share, exceeding the Zacks Consensus Estimate of $2 per share, and up from $1.71 per share a year ago, representing an earnings surprise of 13.50% [1] - The company posted revenues of $1.7 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.83%, compared to $1.57 billion in the same quarter last year [2] - Over the last four quarters, Ralph Lauren has consistently surpassed consensus EPS estimates [2] Group 2: Stock Performance and Market Comparison - Ralph Lauren shares have increased by approximately 18.6% since the beginning of the year, while the S&P 500 has declined by 0.6% [3] - The company's current Zacks Rank is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Group 3: Future Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.03 on revenues of $1.57 billion, and for the current fiscal year, it is $13.61 on revenues of $7.3 billion [7] - The trend of estimate revisions for Ralph Lauren is mixed, which could change following the recent earnings report [6] Group 4: Industry Context - The Textile - Apparel industry, to which Ralph Lauren belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Ralph Lauren's stock performance [5]

Financial Data and Key Metrics Changes - The company reported an 8% top line growth for the full year, with adjusted operating profits growing 24% [9] - Fourth quarter revenue growth was 10%, exceeding the 6% to 7% outlook, driven by strong performance in both direct-to-consumer and wholesale channels [26] - Total company adjusted gross margin expanded by 260 basis points to 69.2%, driven by average unit retail (AUR) growth and favorable mix shifts [27] Business Line Data and Key Metrics Changes - Core product sales grew low double digits in the fourth quarter, with notable growth in cable knit sweaters and outerwear [16] - High potential categories, including women's apparel, outerwear, and handbags, increased by high teens [17] - Direct-to-consumer (DTC) sales, which comprise two-thirds of the business, saw a 13% increase in comparable sales [18] Market Data and Key Metrics Changes - By region, Europe led performance with a 16% sales increase, followed by Asia at 13% and North America at 6% [26] - In China, sales grew more than 20%, supported by strong consumer engagement and marketing activations [34][110] - North America maintained healthy trends with mid-single-digit growth, despite exiting 60 department store doors [30] Company Strategy and Development Direction - The company is focused on elevating its lifestyle brand, driving core product growth, and expanding in key cities through a consumer ecosystem [10][18] - Investments will continue in brand desirability, market share, and technology to enhance consumer engagement [10] - The company plans to remain agile and prudent in resource allocation while pursuing long-term growth opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging global operating environment, including uncertainties around tariffs and consumer behavior [9][22] - Despite macro pressures, the company is well-positioned due to a transformed business model and strong balance sheet [9][10] - The outlook for fiscal 2026 anticipates low single-digit revenue growth, with a cautious view on the second half of the year due to macroeconomic indicators [37][38] Other Important Information - The company generated $1 billion in free cash flow, returning $625 million to shareholders through dividends and repurchases [25] - Marketing investments increased to 7.3% of sales, with plans to maintain this level in the upcoming fiscal year [28][76] - The company acquired its global Polo flagship location in SoHo, Manhattan, as part of its real estate strategy [36][80] Q&A Session Summary Question: How is the company thinking about the health of consumers across regions in today's uncertain backdrop? - Management noted strong brand momentum and resilience in their business model, with no change in the underlying trajectory across regions [49][52] Question: How should the company approach pricing strategy for fiscal 2026? - The company plans to assess pricing actions to offset tariff impacts while maintaining AUR growth [58][62] Question: Can you provide more detail on revenue expectations by geography for the first quarter? - The company expects high single-digit growth in Asia, mid-single-digit growth in Europe, and a cautious outlook for North America [71] Question: What are the plans for marketing spend and high-potential categories? - Marketing spend is expected to remain at 7.3% of revenue, with continued focus on women's apparel, outerwear, and handbags [76][78] Question: What is the outlook for the U.S. wholesale channel? - The company is encouraged by stabilization in the wholesale channel and plans to continue refining its distribution strategy [86][89] Question: How is the company performing in Europe and what is the outlook for operating margins? - Europe delivered strong growth with a focus on key city strategies, and management is optimistic about continued momentum [96][99]

Financial Data and Key Metrics Changes - The company reported a 10% revenue growth in Q4, exceeding the 6% to 7% outlook, driven by strong performance in both direct-to-consumer and wholesale channels [24][22] - For the full year, total revenue growth was 8%, with adjusted operating profits increasing by 24% [8][22] - Adjusted gross margin expanded by 260 basis points to 69.2%, supported by average unit retail (AUR) growth and favorable product mix [26][22] - Free cash flow for the year was $1 billion, with $625 million returned to shareholders through dividends and repurchases [23][22] Business Line Data and Key Metrics Changes - Core product sales grew low double digits in Q4, with notable growth in cable knit sweaters and outerwear [15][16] - High potential categories, including women's apparel, outerwear, and handbags, increased by high teens [16][15] - Digital ecosystem sales grew in the high teens, led by Europe [25][24] Market Data and Key Metrics Changes - North America revenue increased by 6%, with retail comps up 9% [28][30] - Europe saw a 16% revenue increase, with retail comps up 18% [30][31] - Asia's revenue grew by 13%, with China leading at over 20% growth [32][33] Company Strategy and Development Direction - The company is focused on elevating its lifestyle brand, driving core product sales, and expanding in key cities [10][11] - Investments in technology, data, AI, and analytics are prioritized to enhance consumer engagement and operational efficiency [10][21] - The company aims to maintain a strong balance sheet while navigating macroeconomic challenges [21][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging global operating environment but expressed confidence in the brand's resilience and growth potential [8][21] - The outlook for fiscal 2026 anticipates low single-digit revenue growth, with a cautious view on the second half of the year due to macroeconomic pressures [35][36] - The company plans to assess additional pricing actions to mitigate tariff impacts [37][38] Other Important Information - The company opened 83 new stores globally, focusing on key cities, particularly in Asia [18][30] - Marketing investments increased to 7.3% of sales, with plans to maintain this level in the upcoming fiscal year [27][72] - The acquisition of the global Polo flagship location in SoHo is part of a strategy to enhance key city ecosystems [34][76] Q&A Session Summary Question: How is the company thinking about the health of consumers across regions in today's uncertain backdrop? - Management noted strong brand momentum and resilience among elevated consumers, despite general consumer pressure from the geopolitical and economic environment [48][49] Question: How should the company approach pricing strategy for fiscal 2026? - The company plans to assess pricing actions and leverage its diversified supply chain to manage cost headwinds effectively [56][58] Question: What is the outlook for the U.S. wholesale channel? - The company is encouraged by stabilization in the wholesale channel and plans to continue refining its distribution strategy [82][84] Question: Can you discuss the strong performance in China? - China delivered a strong quarter with over 20% growth, supported by effective marketing activations and expanding store footprint [100][104] Question: What are the expectations for gross margin in fiscal 2026? - The company expects gross margins to be flat for the year, with a stronger first half due to durable tailwinds from AUR growth and discount reductions [106][106]

Financial Performance - Fourth quarter revenue increased 8% to $1.7 billion on a reported basis and 10% in constant currency, while full year revenue rose 7% to $7.1 billion[4][15]. - Net revenues for the three months ended March 29, 2025, increased to $1,697.3 million, a rise of 8.3% compared to $1,567.9 million for the same period in 2024[46]. - Gross profit for the twelve months ended March 29, 2025, reached $4,852.9 million, up from $4,431.8 million in 2024, reflecting a strong performance[46]. - Operating income for the three months ended March 29, 2025, was $155.0 million, compared to $107.8 million in the prior year, marking a significant increase[46]. - Net income for the twelve months ended March 29, 2025, was $742.9 million, an increase of 14.9% from $646.3 million in 2024[44]. - Total segment operating income for the twelve months ended March 29, 2025, was $1,745.3 million, up from $1,478.3 million in 2024, indicating robust growth across segments[46]. - Retail sales for the twelve months ended March 29, 2025, reached $4,770.1 million, up from $4,351.0 million in the previous year, reflecting a growth of 9.6%[57]. - For the three months ended March 29, 2025, net income was reported at $129.0 million, compared to $90.7 million for the same period in 2024, representing an increase of 42.2%[60]. - The adjusted net income for the twelve months ended March 29, 2025, was $788.9 million, up from $685.8 million in the previous year, reflecting a growth of 15.1%[60]. Revenue Growth by Region - North America revenue in the fourth quarter increased 6% to $705 million, with comparable store sales up 9%[11][18]. - Europe revenue in the fourth quarter increased 12% to $526 million on a reported basis, with comparable store sales up 18%[11][18]. - Asia revenue in the fourth quarter increased 9% to $432 million on a reported basis, with comparable store sales up 15%[11][18]. Shareholder Returns - The company returned a total of $625 million to shareholders through dividends and stock repurchases in Fiscal 2025, with a 10% dividend increase approved[4][24][25]. - The company declared dividends of $0.825 per share for the three months ended March 29, 2025, compared to $0.75 per share in the same period last year[46]. Future Outlook - For Fiscal 2026, the company expects revenue growth of low-single digits on a constant currency basis, reflecting caution on the global operating environment[4][27]. - Operating margin for Fiscal 2026 is expected to expand modestly, with gross margin projected to be approximately flat in constant currency[4][28]. - The full year Fiscal 2026 tax rate is expected to be in the range of 20% to 22%[30]. - Capital expenditures for Fiscal 2026 are planned to be approximately 4% to 5% of revenue[30]. Customer Acquisition and Digital Strategy - The company recruited 5.9 million new customers in direct-to-consumer channels during Fiscal 2025, supported by growth in social media followers[4][8]. - The company is focused on enhancing its digital footprint and capabilities to expand its direct-to-consumer presence[36]. - The company is undergoing a Next Generation Transformation project aimed at significantly transforming its operations towards a global direct-to-consumer model[62]. Financial Position - Total assets increased to $7,047.3 million in March 2025 from $6,602.6 million in March 2024, representing a growth of approximately 6.7%[39]. - Current liabilities rose to $2,133.7 million in March 2025 from $1,467.2 million in March 2024, an increase of approximately 45.4%[39]. - Retained earnings increased to $7,590.1 million in March 2025 from $7,051.6 million in March 2024, reflecting a growth of approximately 7.6%[39]. - The company reported cash and cash equivalents of $1,922.5 million as of March 2025, up from $1,662.2 million in March 2024, a rise of approximately 15.6%[39]. - The company’s total liabilities increased to $4,458.8 million in March 2025 from $4,152.3 million in March 2024, an increase of approximately 7.4%[39]. - The company’s net cash and short-term investments amounted to $940.4 million in March 2025, compared to $642.7 million in March 2024, a growth of approximately 46.4%[39]. - The company’s total equity increased to $2,588.5 million in March 2025 from $2,450.3 million in March 2024, reflecting a growth of approximately 5.6%[39]. Operating Metrics - Fourth quarter adjusted gross margin was 68.6%, 200 basis points above the prior year, driven by favorable geographic, channel, and product mix[9][16]. - Digital commerce sales in North America increased by 8% for the three months ended March 29, 2025, while brick-and-mortar sales rose by 9%[48]. - In Europe, digital commerce sales surged by 25% for the three months ended March 29, 2025, with brick-and-mortar sales increasing by 16%[48]. - The gross profit margin for the three months ended March 29, 2025, was 68.6%, compared to 66.6% for the same period in 2024[57]. - The adjusted operating margin for the twelve months ended March 29, 2025, was 14.0%, compared to 12.5% for the same period in 2024[59]. Tax and Earnings Per Share - The effective tax rate for the three months ended March 29, 2025, was 20.5%, compared to 18.7% for the same period in 2024[60]. - The diluted earnings per share (EPS) for the three months ended March 29, 2025, was $2.03, an increase from $1.38 in the same period of 2024, marking a growth of 47.0%[60]. - The adjusted effective tax rate for the twelve months ended March 29, 2025, was 21.8%, compared to 19.1% for the same period in 2024[60]. Store Operations - The total number of directly operated stores globally remained stable at 564 as of March 29, 2025, compared to the same number in 2024[54]. - The company opened 20 new Ralph Lauren stores in Asia, increasing the total to 154 stores as of March 29, 2025, compared to 138 stores in 2024[54]. - Licensing revenues for the twelve months ended March 29, 2025, totaled $144.6 million, consistent with $146.3 million in the previous year[57]. Impairment Charges - The company recorded impairment charges related to the write-down of long-lived assets in connection with certain North America wholesale shops[62].

Note: Ralph Lauren's FY'25 concluded in March 2025. Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images SOPA Images/LightRocket via Getty Images Ralph Lauren (NYSE: RL) is set to disclose its fiscal fourth-quarter earnings on Thursday, May 22, 2025, with analysts estimating earnings of $2.40 per share on $1.65 billion in revenue. This would indicate a 45% year- over-year increase in earnings and a 5% rise in sales compared to last year's figures of $1.41 per share and $1.57 billion ...

Core Viewpoint - Analysts project Ralph Lauren (RL) will report quarterly earnings of $1.96 per share, a 14.6% increase year over year, with revenues expected to reach $1.63 billion, reflecting a 4.1% increase from the same quarter last year [1] Earnings Estimates - The consensus EPS estimate has been revised 0.2% lower over the last 30 days, indicating a collective reevaluation by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue Projections - Analysts estimate 'Net revenues- Retail' at $1.01 billion, suggesting a year-over-year increase of 6.7% [5] - 'Net revenues- Wholesale' are projected to reach $585.58 million, indicating a 0.9% increase from the previous year [5] - 'Geographic Net revenues- Other- Licensing' is expected to be $35.47 million, reflecting a decrease of 3.4% year over year [5] Geographic Revenue Estimates - 'Geographic Net revenues- North America' are anticipated to be $685.16 million, a 2.6% increase from the year-ago quarter [6] - 'Geographic Net revenues- Europe' are projected at $493.24 million, suggesting a 5.1% year-over-year increase [6] - 'Geographic Net revenues- Asia' are expected to reach $420.67 million, indicating a 6.7% increase year over year [6] Stock Performance - Ralph Lauren shares have returned 32.9% over the past month, outperforming the Zacks S&P 500 composite's 13.1% change [7] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [7]

Core Viewpoint - Ralph Lauren Corporation is expected to report fourth-quarter fiscal 2025 results on May 22, with revenue estimates of $1.63 billion, reflecting a 4.1% year-over-year growth, and earnings estimates of $1.96 per share, indicating a 14.6% increase from the previous year [1] Group 1: Financial Performance Expectations - The consensus estimate for revenues indicates a growth of 4.1% from the prior year's quarter [1] - The earnings consensus has increased by a penny in the last 30 days, suggesting positive sentiment [1] - In the last reported quarter, the company's earnings surpassed the Zacks Consensus Estimate by 7.6%, with a trailing four-quarter earnings surprise averaging 6.5% [2] Group 2: Factors Influencing Performance - Ralph Lauren's performance is likely to benefit from a strong brand presence, diverse product portfolio, and expanding e-commerce capabilities [2] - The company added 1.9 million consumers to its direct-to-consumer business in the preceding quarter, indicating effective customer acquisition strategies [3] - Management anticipates revenue growth of nearly 6-7% on a constant currency (cc) basis for the fiscal fourth quarter, with operating margin expected to expand by 120-140 basis points [4] Group 3: Currency Impact - The company faces challenges from international exposure, particularly due to fluctuating foreign exchange rates, with the stronger U.S. dollar expected to reduce revenues by approximately 100 to 150 basis points for fiscal 2025 [6][7] - In the fourth quarter, foreign exchange is projected to cut revenues by about 300 basis points, impacting both top-line and margin performance [7] Group 4: Valuation and Market Performance - Ralph Lauren's stock is trading at a premium valuation of 19.56X on a forward 12-month basis, compared to the industry average of 12.67X [9] - The stock has risen 29.1% in the past six months, contrasting with a 3.8% decline in the industry [9] Group 5: Earnings Prediction - The model predicts a likely earnings beat for Ralph Lauren, supported by a positive Earnings ESP of +2.72% and a Zacks Rank of 3 [8]

Group 1: Stock Performance - Ralph Lauren (RL) closed at $240.37, reflecting a +1.34% increase from the previous day, outperforming the S&P 500's daily gain of 0.44% [1] - Over the past month, Ralph Lauren's shares have increased by 30.08%, surpassing the Consumer Discretionary sector's gain of 13.89% and the S&P 500's gain of 10.62% [1] Group 2: Upcoming Earnings - Ralph Lauren is set to release its earnings report on May 22, 2025, with projected earnings of $1.96 per share, indicating a year-over-year growth of 14.62% [2] - The consensus estimate for revenue is $1.63 billion, which represents a 4.05% increase from the prior-year quarter [2] Group 3: Analyst Estimates - Recent changes to analyst estimates for Ralph Lauren reflect shifting business dynamics, with upward revisions indicating analysts' positive outlook on the company's operations and profit generation [3] - The Zacks Consensus EPS estimate has decreased by 0.24% over the past month, and Ralph Lauren currently holds a Zacks Rank of 3 (Hold) [5] Group 4: Valuation Metrics - Ralph Lauren has a Forward P/E ratio of 17.45, which is higher than the industry average of 13.55, suggesting that the company is trading at a premium [6] - The company has a PEG ratio of 1.27, compared to the average PEG ratio of 1.55 for the Textile - Apparel industry [7] Group 5: Industry Context - The Textile - Apparel industry is part of the Consumer Discretionary sector and currently holds a Zacks Industry Rank of 179, placing it in the bottom 28% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]