01—Abstract
Summary
Summary of the 10-Q filed August 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Ralph Lauren Corporation's Form 10-Q for the first quarter of Fiscal 2026, ended June 28, 2025, reports net revenues of $1.719 billiona, up from $1.512 billion in the prior-year quarter, and net income of $220.4 million, or $3.52 per diluted share, versus $168.6 million, or $2.61 per diluted share.
Operating income rose to $273.6 millionb from $208.5 million, and gross profit as a percentage of net revenues increased to 72.3% from 70.5%. Net revenues grew across all reportable segments, with Asia up 21.2% on a reported basis and Europe up 15.7%. Total comparable store sales increased 13%, with digital commerce up 20% and brick and mortar up 12%.
Restructuring and other charges, net, totaled $19.3 millionc, including $11.0 million tied to the Next Generation Transformation project, which reduced net income by $15.4 million after tax. Cash and cash equivalents rose to $2.090 billion, but the company's net cash and short-term investments position fell to $639.8 million from $940.4 million at fiscal year-end, as the company repurchased $323.3 million of stock, spent $187.3 million on capital expenditures and paid $50.7 million in dividends. In June 2025 the company issued $500 million of 5.000% Senior Notes due 2032, which increased long-term debt to $1.237 billion.
Equity declined to $2.515 billiond from $2.588 billion. The Board raised the quarterly dividend to $0.9125 per share from $0.825 and expanded the repurchase authorization by $1.500 billion, leaving approximately $1.602 billion available.
Management expects capital expenditures of roughly 4% to 5% of net revenues for Fiscal 2026. The filing notes that tariff increases, inflation, currency volatility and geopolitical conflicts remain key risks, and that the company has not been significantly affected by supply chain disruptions to date.
02—Key points
Key Highlights
- Net revenues of $1.719 billion rose 13.7% on a reported basis and 11.4% on a constant currency basis versus the prior-year quarter.
- Net income increased to $220.4 million from $168.6 million, and diluted EPS rose to $3.52 from $2.61.
- Gross profit as a percentage of net revenues improved 180 basis points to 72.3%, driven by average unit retail growth, favorable currency effects, mix and lower cotton costs.
- Total comparable store sales increased 13%, with digital commerce up 20% and brick and mortar up 12%.
- Net cash and short-term investments declined to $639.8 million from $940.4 million at fiscal year-end, after $323.3 million of share repurchases and $187.3 million of capital expenditures.
- In June 2025 the company issued $500 million of 5.000% Senior Notes due 2032, and total debt rose to $1.637 billion from $1.142.6 million.
- The Board increased the quarterly dividend to $0.9125 per share and expanded the share repurchase program by $1.500 billion, with about $1.602 billion remaining.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Ralph Lauren kept $0.13.
- Revenue$1.72B100.0%
- Cost of revenue−$476.8M27.7%
- Gross profit$1.24B72.3%
- Operating costs−$968.7M56.3%
- Operating income$273.6M15.9%
- Interest, other & tax−$53.2M3.1%
- Net income$220.4M12.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed August 7, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.72B$1.51B | +13.7% |
| Cost of Revenue | $476.80M$446.40M | +6.8% |
| Gross Profit | $1.24B$1.07B | +16.6% |
| SG&A Expenses | $949.40M$849.90M | +11.7% |
| Operating Expenses | $968.70M$857.30M | +13.0% |
| Operating Income | $273.60M$208.50M | +31.2% |
| Interest Expense | $11.50M$10.90M | +5.5% |
| Net Income | $220.40M$168.60M | +30.7% |
| EPS (Basic) | $3.62$2.67 | +35.6% |
| EPS (Diluted) | $3.52$2.61 | +34.9% |
| Shares Outstanding (Basic) | 61.00M63.20M | −3.5% |
| Shares Outstanding (Diluted) | 62.50M64.60M | −3.3% |
05—Questions
Frequently Asked Questions
What drove the increase in operating income this quarter?
Operating income rose $65.1 million, or 31.2%, to $273.6 million. The filing attributes this mainly to the higher gross margin and lower SG&A as a percentage of net revenues, partly offset by higher restructuring and other charges of $19.3 million, compared with $7.4 million a year earlier.
How did each geographic segment perform?
Net revenues grew in all three reportable segments. North America rose 7.9% to $656.2 million, Europe rose 15.7% to $554.5 million on a reported basis and 10.3% on a constant currency basis, and Asia rose 21.2% to $474.0 million on a reported basis and 18.9% on a constant currency basis. Segment operating margins improved in each of the three segments.
Why did operating cash flow decline?
Net cash provided by operating activities fell to $176.1 million from $277.3 million. The filing cites an unfavorable change in working capital, including higher in-transit inventory and higher product and freight costs, and accrued payroll and benefits driven by a larger bonus payout in the first quarter.
What capital allocation actions did the company take?
The company repurchased $250.0 million of Class A stock under its program plus $73.3 million of shares withheld for taxes, paid $50.7 million in dividends, and invested $187.3 million in capital expenditures, mainly for real estate purchases, store work and technology. It also raised the quarterly dividend to $0.9125 per share and expanded its repurchase authorization by $1.500 billion.
What are the main risks highlighted in the filing?
The filing highlights potential new U.S. tariffs and retaliatory measures, inflationary pressures, foreign currency volatility, geopolitical conflicts and supply chain disruptions. It states there are no material changes to the risk factors disclosed in the Fiscal 2025 10-K. The company also notes that its profitability would be negatively affected if tariffs increase significantly across its supply chain.
06—Continue