Ralph Lauren Beats on Q1 Earnings & Revenues, Raises FY26 Outlook

Core Insights - Ralph Lauren Corporation (RL) reported strong first-quarter fiscal 2026 results, with both revenue and earnings exceeding expectations, highlighting the company's brand strength and strategic execution [1][2][3] Financial Performance - Adjusted earnings per share reached $3.77, surpassing the consensus estimate of $3.48, marking a 39.6% increase from $2.70 in the same quarter last year [2][9] - Net revenues grew 14% year over year to $1,719 million, exceeding the Zacks Consensus Estimate of $1,651 million, with an 11% increase on a constant-currency basis [3][9] - Global direct-to-consumer comparable store sales increased by 13%, positively influenced by foreign currency rates [4] Regional Performance - North America: Revenues rose 8% to $656 million, with retail channel comps up 12% [7] - Europe: Revenues increased 16% to $555 million, with retail channel comps up 10% [8] - Asia: Revenues grew 21% to $474 million, with comps up 18% [10] Margin and Cost Analysis - Adjusted gross profit margin expanded by 180 basis points to 72.3%, driven by favorable product mix and lower cotton costs [11][9] - Adjusted operating income was $293 million, with an operating margin increase of 270 basis points to 17% [12] Balance Sheet and Capital Management - Cash and short-term investments totaled $2.3 billion, with total debt at $1.6 million and total shareholders' equity at $2.5 billion [13] - The company repurchased nearly $250 million of Class A Common Stock and returned about $300 million to shareholders through dividends and stock repurchases [14] Outlook - For fiscal 2026, RL expects low to mid-single-digit revenue growth on a constant currency basis, with operating margin expansion of approximately 40 to 60 basis points [17] - For the fiscal second quarter, revenue growth is anticipated in the high single digits on a constant currency basis, with operating margin expected to expand by 120 to 160 basis points [19]