How Ralph Lauren Plans To Expand Its Luxury Empire

Group 1 - Ralph Lauren outlined new three-year targets for mid-single-digit sales growth and 100–150 basis points of operating margin expansion, with a 16% margin outlook not seen as a ceiling [1] - Growth is expected to be driven by strong performance in Asia and Europe, along with gains in women's apparel, handbags, and an expanded store footprint in APAC and EMEA [1] - Bank of America Securities noted that the updated plan reflects the company's previous successful strategy and highlights potential for gross margin improvement [2] Group 2 - Key drivers for growth include continued pricing power through higher average unit retail (AUR), easing input costs like cotton, and productivity gains in supply chain and inventory management [3] - A new $400 million cost savings program has been initiated, split between gross margin and SG&A, following a similar initiative from fiscal 2022 to 2025 [4] - Ralph Lauren's second-half guidance may be conservative, with stable consumer demand trends and opportunities in the women's category, particularly in handbags [5] Group 3 - In the first quarter of fiscal 2026, Ralph Lauren reported a 14% increase in revenue to $1.72 billion, exceeding the consensus estimate of $1.64 billion, and adjusted EPS of $3.77, surpassing forecasts of $3.43 [6] - For fiscal 2026, the company projects low- to mid-single-digit revenue growth at constant currency [6] - Analyst Christopher Nardone identified upside risks from faster sales recovery and cost savings, while downside risks include weakness in wholesale and global macro headwinds [7]