How did Ralph Lauren perform in the first quarter of Fiscal 2025?

Revenue rose 1% on a reported basis to $1.51 billion and 3% in constant currency. Reported diluted EPS was $2.61 and adjusted diluted EPS was $2.70, compared with $2.34 adjusted in the prior-year quarter.

Which regions drove growth, and which declined?

Europe revenue increased 6% to $479.1 million and Asia increased 4% to $390.9 million, with China up high-single digits on a reported basis. North America revenue decreased 4% to $608.2 million, as stronger direct-to-consumer performance was more than offset by planned wholesale declines.

Did Ralph Lauren change its full-year guidance?

No. The company reaffirmed its Fiscal 2025 outlook of low-single-digit constant-currency revenue growth, centered around 2% to 3%, and operating margin expansion of 100 to 120 basis points in constant currency. Foreign currency is now expected to reduce revenue growth by approximately 150 basis points.

What is the outlook for the second quarter?

The company expects constant-currency revenue growth centered around 3% to 4% and operating margin expansion of 80 to 120 basis points, with higher planned marketing spending. Foreign currency is expected to reduce revenue growth by approximately 160 basis points.

How is the company returning capital and managing its balance sheet?

Ralph Lauren returned approximately $225 million to shareholders through dividends and repurchases of Class A common stock, including about $176 million of repurchases in the quarter. It ended the quarter with $1.76 billion in cash and short-term investments and $1.14 billion in long-term debt.

RL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Ralph Lauren Corporation reported results for its first quarter of Fiscal 2025, the quarter ended June 29, 2024, in a press release furnished as Exhibit 99.1 under Item 2.02.

Revenue rose 1% to $1.5 billion^a on a reported basis and 3% in constant currency, with growth led by Europe and Asia. Reported diluted EPS was $2.61, up 33% from $1.96, and adjusted diluted EPS was $2.70 versus $2.34 in the prior year. Net income was $168.6 million on a reported basis, and operating margin was 13.8% reported and 14.3% adjusted.

Direct-to-consumer comparable store sales grew 5%, with positive retail comps in all regions. By segment, Europe revenue rose 6% to $479.1 million^b and Asia rose 4% to $390.9 million, while North America fell 4% to $608.2 million as planned declines in wholesale offset stronger direct-to-consumer performance. Inventory was $1.04 billion, down 13% year over year, and the company ended the quarter with $1.76 billion in cash and short-term investments and $1.14 billion in long-term debt.

The company repurchased approximately $176 million^c of Class A common stock and paid dividends of $0.825 per share. Management reaffirmed its full-year Fiscal 2025 outlook of low-single-digit constant-currency revenue growth, centered around 2% to 3%, and adjusted operating margin expansion of 100 to 120 basis points in constant currency. For the second quarter, the company guided to constant-currency revenue growth centered around 3% to 4% and operating margin expansion of 80 to 120 basis points, while raising its full-year tax rate expectation to 22% to 23%.

02—Key points

Key Highlights

Reported diluted EPS of $2.61 (up 33%) and adjusted diluted EPS of $2.70 (up 15%), excluding restructuring-related and other net charges
Revenue of $1.51 billion, up 1% reported and 3% in constant currency, ahead of company expectations
Europe revenue up 6% to $479.1 million and Asia up 4% to $390.9 million; North America down 4% to $608.2 million on planned wholesale declines
Global direct-to-consumer comparable store sales grew 5%, with positive retail comps across all regions
Inventory down 13% year over year to $1.04 billion; cash and short-term investments of $1.76 billion
Reaffirmed full-year Fiscal 2025 outlook: low-single-digit constant-currency revenue growth and 100 to 120 basis points of operating margin expansion
Raised full-year Fiscal 2025 tax rate expectation to approximately 22% to 23%, up from 19% in the prior year

03—Questions

Frequently Asked Questions

How did Ralph Lauren perform in the first quarter of Fiscal 2025?
Revenue rose 1% on a reported basis to $1.51 billion and 3% in constant currency. Reported diluted EPS was $2.61 and adjusted diluted EPS was $2.70, compared with $2.34 adjusted in the prior-year quarter.
Which regions drove growth, and which declined?
Europe revenue increased 6% to $479.1 million and Asia increased 4% to $390.9 million, with China up high-single digits on a reported basis. North America revenue decreased 4% to $608.2 million, as stronger direct-to-consumer performance was more than offset by planned wholesale declines.
Did Ralph Lauren change its full-year guidance?
No. The company reaffirmed its Fiscal 2025 outlook of low-single-digit constant-currency revenue growth, centered around 2% to 3%, and operating margin expansion of 100 to 120 basis points in constant currency. Foreign currency is now expected to reduce revenue growth by approximately 150 basis points.
What is the outlook for the second quarter?
The company expects constant-currency revenue growth centered around 3% to 4% and operating margin expansion of 80 to 120 basis points, with higher planned marketing spending. Foreign currency is expected to reduce revenue growth by approximately 160 basis points.
How is the company returning capital and managing its balance sheet?
Ralph Lauren returned approximately $225 million to shareholders through dividends and repurchases of Class A common stock, including about $176 million of repurchases in the quarter. It ended the quarter with $1.76 billion in cash and short-term investments and $1.14 billion in long-term debt.

04—Continue

← View all 8-K filings