Ralph Lauren Beats Q1 Earnings Estimates, As Its Prices Continue to Increase
The company saw increases in the European and Asian markets, but it struggled to find growth on the home front.
Ralph Lauren on Thursday revealed its fiscal first-quarter earnings, reporting increases in net income and revenue that surpassed Wall Street expectations.
In the three months ending July 1, the American apparel company’s net income reached $132.1 million USD, up 7% from the same period in the year prior. Adjusted earnings per share landed at $2.34 USD, which is 20 cents higher than analysts’ expectations of $2.14 USD, per FactSheet.
Additionally, Ralph Lauren’s first-quarter revenues climbed to $1.5 billion USD, marking a small 1% increase, with currencies adjuted, from the company’s $1.49 billion USD in Q1 2022. The company’s growth was largely led by the European and Asian markets, where revenues grew by 8% to $450 million USD and 13% to $378 million USD, respectively. In North America, however, the label’s revenues declined by 10% to $632 million USD.
“Our strong first quarter performance underscores the power of our brand and momentum of our strategy around the world, following our significant multi-year reset,” said Patrice Louvet, president and chief executive officer at Ralph Lauren.
He added, “While the global operating environment remains as volatile as ever, our talented, passionate teams are delivering on the multiple growth opportunities to scale our business with creativity and discipline — from driving high-quality new consumer recruitment to expanding digital and elevating our touch points in every region and channel.”
The report comes as Ralph Lauren continues to raise its prices, in an effort to boost brand prestige. Earlier this month, the company increased its average unit retail (AUR) prices by 15%, following on from an 8% increase last year. Since 2018, the brand’s AUR has grown by roughly 80%.
Per the company’s Q1 results, Raph Lauren’s elevated shift earned consumer appeal abroad, but it struggled to find traction in its domestic market. “If you step back big time, we really reset the foundations of our brand,” Louvet told WWD of the label’s evolved identity. “This isn’t just one quarter or two, this is years of work to really deliberately elevate every facet of the consumer experience. We remain on offense.”
See Ralph Lauren’s full fiscal Q1 2023 report on the brand’s website.
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