Ralph Lauren(US:RL)2025-11-06 13:13Financial Performance - Earnings per diluted share for Q2 Fiscal 2026 were $3.32, up 44% year-over-year on a reported basis, and $3.79, up 49% on an adjusted basis[2] - Revenue for Q2 Fiscal 2026 increased 17% to $2.0 billion on a reported basis, with a 14% increase in constant currency[7] - Net revenues for the three months ended September 27, 2025, were $2,010.7 million, a 16.5% increase from $1,726.0 million for the same period in 2024[31] - Net income for the three months ended September 27, 2025, was $207.5 million, up 40.3% from $147.9 million in the same period of 2024[31] - Basic net income per share for the three months ended September 27, 2025, was $3.39, compared to $2.36 for the same period in 2024, representing a 43.6% increase[31] - Total net revenues for the six months ended September 27, 2025, reached $3,729.8 million, a 15.2% increase compared to $3,238.2 million in the prior year[38] - Operating income for the six months ended September 27, 2025, was $519.3 million, up from $387.4 million in the same period of 2024, reflecting a 34.0% increase[35] - Operating income for the three months ended September 27, 2025, was $245.7 million, reflecting an increase from $178.9 million in the same period last year[45] Revenue Growth by Region - North America revenue increased 13% to $832 million, with comparable store sales also up 13%[12] - Europe revenue rose 22% to $688 million, with a 10% increase in comparable store sales[12] - Asia revenue increased 17% to $446 million, with comparable store sales up 16%[12] - North America segment net revenues increased by 10.5% to $1,488.6 million for the six months ended September 27, 2025, compared to $1,347.7 million in 2024[38] - Digital commerce sales in Asia grew by 36% for the three months ended September 27, 2025, indicating strong online performance[37] Shareholder Returns and Investments - The company returned approximately $420 million to shareholders through dividends and stock repurchases year-to-date[4] - The company repurchased $435.9 million of common stock during the six months ended September 27, 2025, compared to $330.2 million in the same period of 2024[33] - Capital expenditures for the six months ended September 27, 2025, were $281.1 million, significantly higher than $75.1 million in the prior year[33] - The company is investing $100 million in new product development, focusing on sustainable materials and innovative designs[54] Financial Position - The company ended Q2 Fiscal 2026 with $1.6 billion in cash and short-term investments, and $1.2 billion in total debt[15] - Total assets as of September 27, 2025, were $7,347.7 million, an increase from $6,800.0 million as of September 28, 2024[29] - Total liabilities as of September 27, 2025, were $4,765.5 million, compared to $4,357.7 million as of September 28, 2024[29] - Cash and cash equivalents as of September 27, 2025, were $1,443.0 million, a decrease from $1,922.5 million as of March 29, 2025[29] - The company reported a total current liability of $1,840.0 million as of September 27, 2025, down from $2,092.4 million as of September 28, 2024[29] Strategic Initiatives - The company plans to continue expanding its direct-to-consumer presence and enhance its digital capabilities[27] - The company is focused on managing inventory levels effectively to mitigate margin pressures in a highly promotional retail environment[27] - The company is undergoing a Next Generation Transformation project aimed at significantly transforming its operations towards a direct-to-consumer model[51] - Ralph Lauren plans to expand its presence in Asia, targeting a 20% increase in market share over the next three years[54] - The company announced a strategic partnership with a leading technology firm to enhance customer experience through AI[54] - Ralph Lauren is exploring potential acquisitions to bolster its portfolio and expand into new markets[54] Future Guidance - Full year Fiscal 2026 revenue is now expected to increase 5% to 7% on a constant currency basis[18] - Operating margin for Fiscal 2026 is expected to expand approximately 60 to 80 basis points in constant currency[19] - Future guidance for Fiscal 2026 excludes potential restructuring-related charges, with uncertainty regarding the timing and amount of such charges[53] - Future guidance indicates expected revenue growth of 8-10% for the upcoming fiscal year[54] Profitability Metrics - Gross profit for the six months ended September 27, 2025, was $2,608.7 million, compared to $2,221.5 million for the same period in 2024, reflecting a 17.4% increase[31] - Gross margin improved to 60%, up from 58% in the previous year, reflecting better pricing strategies and cost management[54] - The effective tax rate for the three months ended September 27, 2025, was 14.6%, compared to 21.4% in the previous year[46] - The company incurred total other operating expenses of $1,120.7 million for the three months ended September 27, 2025, compared to $976.8 million in the prior year[45]