Q1 2027 Ralph Lauren Corp Earnings Call Transcript
Key Points
- Ralph Lauren Corp (RL) delivered strong first-quarter results with revenues up 13%, exceeding expectations, driven by double-digit growth in Asia and North America and mid-single-digit growth in Europe.
- The company continues to successfully execute its brand elevation strategy, with AUR increasing 15% and gross margin expanding 130 basis points, reflecting stronger full-price selling and reduced promotional activity.
- Ralph Lauren Corp (RL) added 1.5 million new customers to its DTC businesses and saw strong growth in high-potential categories like women's apparel, outerwear, and handbags, which increased more than 20%.
- The company raised its full-year revenue and operating margin outlook due to better-than-expected first-quarter results and continued brand momentum, with Asia now expected to grow high-single to low-double digits.
- Ralph Lauren Corp (RL) maintains a strong balance sheet with $1.9 billion in cash and returned over $300 million to shareholders through dividends and repurchases in the quarter.
- The company is making strategic investments in AI, technology, and key city ecosystems, including expanding its RL mobile app to Korea and opening 22 new stores globally, to drive long-term growth.
- Ralph Lauren Corp (RL) faces ongoing macroeconomic uncertainty in Europe, with store traffic impacted by the broader environment, leading to a prudent view on consumer demand in the EMEA region.
- The company expects foreign currency to negatively impact revenue growth by approximately 50 to 100 basis points for the full year, and 100 to 150 basis points in the second quarter.
- Ralph Lauren Corp (RL) anticipates modest cost headwinds from energy pricing volatility and US tariffs, with an assumption of approximately 10% tariff rates in the first half and higher rates in the second half.
- The company plans to accelerate strategic reductions in off-price sales and exit lower-tier full-price stores in the back half of the year, which is expected to more than offset underlying growth in North America wholesale.
- Europe's retail comps were only up 1% on top of a double-digit compare last year, with growth tempered by disruption to Middle East partner sales and tourism, as well as elevated energy costs.
- Ralph Lauren Corp (RL) expects revenue and profit growth to be more weighted to the first half of the fiscal year, reflecting wholesale shipment timing and the decision to accelerate strategic reductions in the back half.
Ladies and gentlemen, thank you for standing by. Welcome to the Ralph Lauren first-quarter fiscal year 2027 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to our host, Ms. Corinna Van Der Ghinst. Please go ahead.
Good morning. Thank you for joining Ralph Lauren's first-quarter fiscal 2027 conference call. Joining me today are Patrice Louvet, the Company's President and Chief Executive Officer; and Justin Picicci, Chief Financial Officer. After prepared remarks, we will open up the call for your questions, which we ask that you limit to one per caller.
During today's call, our financial performance will be discussed on a constant currency adjusted basis. Our reported results, including foreign currency, can be found in this morning's press release. We will also be making some forward-looking statements within the meaning of the federal securities law, including our financial
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