Ralph Lauren Shares Slide Despite Q3 Beat as Tariff Pressures Loom

Core Viewpoint - Ralph Lauren reported strong third-quarter earnings and revenue, exceeding Wall Street expectations, but shares fell due to margin pressure warnings from tariffs [1][3] Group 1: Earnings and Revenue Performance - The company posted earnings per share of $5.82, slightly above analyst estimates of $5.78 [1] - Revenue rose 12% year over year to $2.41 billion, surpassing expectations of $2.30 billion [1] - On an adjusted basis, earnings per share reached $6.22, up 29% from a year earlier, while reported EPS increased 25% from $4.66 [2] - Revenue grew 10% in constant currency terms, with foreign exchange contributing approximately 220 basis points to growth [2] Group 2: Consumer Demand and Product Performance - Sales were driven by demand for products such as Polo shirts and leather handbags, with affluent consumers continuing to spend on luxury goods despite economic pressures on lower- and middle-income households [2] Group 3: Future Outlook - The company expects fourth-quarter operating margin to contract by approximately 80 to 120 basis points due to higher U.S. tariffs [3] - For fiscal 2026, the company raised its outlook for constant-currency revenue growth to the high-single-digit to low-double-digit range, up from the previous forecast of 5% to 7% [4] - Operating margin expansion is projected at 100 to 140 basis points, compared to an earlier estimate of 60 to 80 basis points [4] - Fourth-quarter revenue is expected to grow at a mid-single-digit rate in constant currency [4]