Ralph Lauren Shares Surge 4% as Q1 Earnings Beat Expectations
NEW YORK – Ralph Lauren Corporation saw its shares rise by 4.2% in pre-market trading on Wednesday after reporting better-than-expected first-quarter earnings and revenue.
The luxury lifestyle brand posted adjusted earnings per share (EPS) of $2.70, surpassing analyst estimates of $2.48. Revenue for the quarter increased by 1.1% year-over-year to $1.51 billion, exceeding the $1.49 billion consensus forecast.
Growth in Europe and Asia
Global direct-to-consumer comparable store sales grew by 5% in Q1, driven by positive retail comps across all regions. Europe and Asia led the revenue growth, with sales up 6% and 4% respectively on a reported basis.
Patrice Louvet, President and CEO, stated, "We delivered a solid start to the year, with first-quarter performance exceeding our expectations on the top- and bottom-line led by our direct-to-consumer and international businesses."
Improved Margins
Gross margin expanded by 170 basis points to 70.5%, benefiting from a favorable product mix and lower cotton costs. Operating margin increased by 90 basis points to 14.3% on an adjusted basis.
Fiscal 2025 Outlook
For fiscal 2025, Ralph Lauren reaffirmed its outlook for low-single-digit revenue growth and a 100-120 basis points increase in operating margin in constant currency.
Shareholder Returns
The company returned approximately $225 million to shareholders through dividends and share repurchases during the quarter. Ralph Lauren's stock was up 4.2% in pre-market trading following the earnings beat.
Earnings per share (EPS): A company's profit divided by its number of outstanding shares of common stock. For example, if a company earns $1 million in profit and has 1 million shares, its EPS is $1.
Gross margin: The difference between revenue and cost of goods sold (COGS), divided by revenue, expressed as a percentage. If a company has $1 million in revenue and $700,000 in COGS, its gross margin is 30%.
Operating margin: A measure of profitability that shows what percentage of revenue is left over after paying for variable costs of production, such as wages and raw materials. If a company has $1 million in revenue and $850,000 in operating expenses, its operating margin is 15%.
