Sign up to receive the Vogue Business newsletter for the latest luxury news and insights, plus exclusive membership discounts.
Ralph Lauren said sales rose 1 per cent year-on-year in the first quarter of fiscal 2025 to $1.5 billion, beating expectations. Shares jumped 4 per cent in pre-market trading on Wednesday morning.
“We started year three of our ‘Next Great Chapter: Accelerate’ plan with continued momentum, keeping us on track with our fiscal ’25 and long-term strategic commitments,” CEO Patrice Louvet told investors on Wednesday morning. “First-quarter results exceeded our expectations, led by international and positive retail comps across all regions with continued momentum across consumer metrics performance in our global direct-to-consumer (DTC) businesses.”
Profits rose to $169 million for the quarter, a 27 per cent increase from the same period last year. DTC sales were up 5 per cent year-on-year, with positive retail comps across all regions.
By region, growth was led by Europe and Asia, up 6 per cent to $479 million and 4 per cent to $391 million, respectively. China and Japan (the latter being Ralph Lauren’s largest market in the region) were standouts. Newly appointed CFO Justin Picicci said Chinese spending is normalising post-pandemic, and attributes Japan’s strong performance to key marketing campaigns and a rebound in tourist spending. He added that there’s a tailwind from tourism in Europe, but said that domestic demand is what propels the brand’s European business.
Ralph Lauren’s profit jump — as well as its resilience in China — is notable at a time when much of the luxury industry is witnessing a sales downturn, a softer Chinese consumer and plunging profits. Burberry, Hugo Boss and Ferragamo all reported profit decreases by double-digit percentage points.
North America was more of a trouble spot. The region’s revenues fell 4 per cent year-on-year to $608 million. This dip was driven by the brand’s wholesale channel, revenues for which fell 13 per cent year-on-year. “Looking ahead, we continue to expect North America wholesale declines to moderate through the remainder of fiscal 2025,” said Picicci. “Our outlook also includes the planned exit of approximately 45 department store doors this fiscal year as we continue to proactively evaluate and refine our brand presence on a door-by-door basis.”
Louvet added that the brand is working to drive elevation in North America to the same level as its international presence. “The starting point was lower because of historical activities that were done many years back in terms of over-distribution of the brand, and by over-reliance on promotional activity,” he said. “We are working diligently to get to the same level in North America as we are around the world.”
Ralph Lauren reported its first-quarter results in the midst of the brand’s Olympics splash. The official outfitter of Team USA for the 2024 Olympic and Paralympic Games, the brand has hosted events in Paris to celebrate the tournament, alongside releasing a line of merchandise.
“We are in the midst of a spectacular summer of sports,” Louvet said of the brand’s Olympics and Wimbledon activations, both part of what he called a “rolling thunder” of brand marketing activations. “These activations are driving strong sustainable growth in new customer acquisition and engagement.”
These activations are, in part, why Ralph Lauren is weathering the broader macro pressures on the consumer, he said. “Our online search grew 25 per cent this last quarter, outpacing our entire competitive set — and this was even before the Olympics kicked in.”
Looking ahead to 2025, the company maintains its guidance. For fiscal 2025, Ralph Lauren expects revenues to approximately increase by low-single digits in comparison to last year on a constant currency basis (around 2 to 3 per cent).
Picicci said the company expects the first and third quarters to trend below its full-year outlook, largely down to the planned timing of wholesale receipts. “The third quarter is also impacted by additional factors specific to this year: notably a shorter holiday selling window between Thanksgiving and Christmas compared to last year, and volatility around the US presidential election and potential related impacts on consumer behaviour,” he added.
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
More from this author:
Nara Smith and the new era of influencer marketing
America’s election chaos spells uncertainty for fashion
Moncler revenues rise 8% in the first half of 2024 on Asia boost
