01—Abstract
Summary
Summary of the 10-Q filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Ralph Lauren Corporation's Form 10-Q for the third quarter of Fiscal 2026, ended December 27, 2025, reports strong top-line and profit growth.
Net revenues rose to $2.406 billiona for the three months (up 12.2% as reported and 10.0% on a constant currency basis) and to $6.136 billion for the nine months (up 14.0% reported and 11.7% constant currency). Net income was $361.6 million for the quarter, versus $297.4 million a year earlier, and diluted EPS was $5.82, versus $4.66. For the nine months, net income was $789.5 million and diluted EPS was $12.66.
Gross margin expanded to 69.9% in both periods, and operating income rose 21.0% in the quarter to $471.3 millionb, with restructuring and other charges of $31.8 million (including $25.0 million tied to the Next Generation Transformation project). Cash generation was solid but moderated. Operating cash flow was $1.009 billion for the nine months, down from $1.113 billion, mainly on working capital changes.
Capital expenditures more than doubled to $356.7 millionc, compared with $136.3 million a year earlier. The company issued $498.2 million of 5.000% Senior Notes due 2032 and repaid $400 million of 3.750% Senior Notes at maturity. It repurchased $350.1 million of Class A stock under its program and paid $161.3 million in dividends.
Net cash and short-term investments were $1.013 billiond, up from $940.4 million at March 29, 2025. Equity rose to $2.888 billion, and $1.502 billion remained available under the repurchase program. The filing states there are no material changes to the risk factors in the Fiscal 2025 10-K.
Management expects Fiscal 2026 capital expenditures of roughly 4% to 5% of net revenues. The company also reported that its disclosure controls were effective as of December 27, 2025.
02—Key points
Key Highlights
- Net revenues of $2.406 billion in the quarter, up 12.2% as reported (10.0% constant currency), with growth in all reportable segments.
- Gross profit as a percentage of net revenues rose 150 basis points to 69.9% in the quarter and 140 basis points to 69.9% for the nine months.
- Operating income of $471.3 million in the quarter, up 21.0%, with Asia operating margin up 490 basis points to 31.8%.
- Diluted EPS of $5.82 for the quarter versus $4.66 a year earlier, and $12.66 for the nine months versus $9.57.
- Restructuring and other charges of $31.8 million in the quarter, including $25.0 million for the Next Generation Transformation project, reduced after-tax net income by $25.2 million.
- Capital expenditures of $356.7 million for the nine months, up from $136.3 million, with net cash and short-term investments of $1.013 billion at quarter end.
- Issued $500 million of 5.000% Senior Notes due 2032 and repaid $400 million of 3.750% Senior Notes; $1.502 billion remains under the share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Ralph Lauren kept $0.15.
- Revenue$2.41B100.0%
- Cost of revenue−$724.3M30.1%
- Gross profit$1.68B69.9%
- Operating costs−$1.21B50.3%
- Operating income$471.3M19.6%
- Interest, other & tax−$109.7M4.6%
- Net income$361.6M15.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed February 5, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $2.41B$2.14B | +12.2% |
| Cost of Revenue | $724.30M$677.40M | +6.9% |
| Gross Profit | $1.68B$1.47B | +14.7% |
| SG&A Expenses | $1.18B$1.06B | +10.7% |
| Operating Expenses | $1.21B$1.08B | +12.4% |
| Operating Income | $471.30M$389.70M | +20.9% |
| Interest Expense | $13.30M$11.60M | +14.7% |
| Net Income | $361.60M$297.40M | +21.6% |
| EPS (Basic) | $5.91$4.76 | +24.2% |
| EPS (Diluted) | $5.82$4.66 | +24.9% |
| Shares Outstanding (Basic) | 61.10M62.50M | −2.2% |
| Shares Outstanding (Diluted) | 62.20M63.80M | −2.5% |
05—Questions
Frequently Asked Questions
How did Ralph Lauren perform in the third quarter of Fiscal 2026?
Net revenues rose 12.2% to $2.406 billion, and net income increased 21.6% to $361.6 million. Diluted EPS was $5.82, compared with $4.66 a year earlier. Operating margin improved 140 basis points to 19.6%, driven by higher gross margin and lower SG&A as a percentage of revenue.
Did the company's cash position and operating cash flow change?
Operating cash flow was $1.009 billion for the nine months, compared with $1.113 billion a year earlier, mainly due to unfavorable working capital changes. Net cash and short-term investments rose to $1.013 billion from $940.4 million at March 29, 2025, after $473.4 million of share repurchases and withholdings, $356.7 million of capital expenditures, and $161.3 million of dividends.
What drove the increase in capital expenditures?
The filing states that nine-month capital expenditures of $356.7 million, up from $136.3 million, related primarily to real estate purchases, store openings and renovations, corporate office renovations, and information technology enhancements. The company expects Fiscal 2026 capital expenditures of approximately 4% to 5% of net revenues.
How is the company's debt position and liquidity?
Total debt was $1.238 billion at December 27, 2025, after the $500 million 5.000% Senior Notes due 2032 were issued and the $400 million 3.750% Senior Notes were repaid in September 2025. The $750 million Global Credit Facility and Commercial Paper Program had no borrowings outstanding, aside from $10 million of letters of credit. The company had $2.251 billion in cash, cash equivalents, and short-term investments, of which $1.670 billion was held by subsidiaries outside the U.S.
Are there any ongoing restructuring or transformation costs?
Yes. The Next Generation Transformation project, a multi-year global initiative toward a more direct-to-consumer model, generated other charges of $25.0 million in the quarter and $61.7 million for the nine months. Restructuring and other charges totaled $88.4 million for the nine months, compared with $38.0 million a year earlier.
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