The company attributed the strong start to broad based growth across geographies, channels and consumer segments, higher average unit retail (AUR), strong full price selling and continued momentum in key categories.
Ralph Lauren reported better than expected Q1 FY27 results, with revenue rising 14 per cent to $2.0 billion, supported by broad-based growth across regions and categories.
Higher AUR, strong full price selling and lower promotions helped expand gross margin to 73.7 per cent, while Asia led regional growth at 24 per cent.
The company also raised its full year FY27 outlook.
Higher margins and AUR offset rising costs
Gross profit reached $1.4 billion, while gross margin expanded 140 basis points (bps) year on year (YoY) to 73.7 per cent.
Gross margin expansion was driven by AUR growth and favourable channel and geographic mix shifts, which more than offset incremental pressure from tariffs and other product costs.
Operating income was $342 million, with a reported operating margin of 17.5 per cent.
Operating expenses increased 14 per cent YoY to $1.1 billion.
Despite the higher expenses and incremental tariff and product cost pressures, stronger gross margins supported overall profitability, Ralph Lauren said in a press release.
It increased AUR by 15 per cent across its direct-to-consumer (DTC) network in Q1 FY27, exceeding expectations.
The increase reflected continued brand elevation and strong full price selling trends, supported by lower than planned promotional activity.
Strong growth across key markets
The company delivered growth across all three major regions. North America revenue increased 13 per cent to $740 million, while Europe revenue rose 7 per cent to $594 million. Asia recorded the strongest growth, with revenue increasing 24 per cent to $589 million.
Ralph Lauren also reported continued momentum in its core business, which grew at a mid-teens rate. High potential categories including women’s apparel, outerwear and handbags increased more than 20 per cent YoY, outperforming overall company growth.
Customer acquisition supports momentum
The company added 1.5 million new consumers across its DTC businesses during the quarter, while brand awareness, consideration and net promoter scores also increased.
Commenting on the performance, Patrice Louvet, president and chief executive officer (CEO) said, “We are off to a strong start in the second year of our Next Great Chapter: Drive plan, with broad-based performance across geographies, channels and consumer segments in the first quarter, exceeding our expectations and driving an increase in our full year Fiscal 2027 outlook.”
FY27 outlook remains positive
For FY27, the company expects constant-currency revenue to increase approximately mid-single digits YoY on a 52-week comparable basis, now centred around 5-6 per cent, reflecting better-than-expected first-quarter results.
For Q2 FY27, the company expects revenue to grow approximately 5 to 6 per cent on a constant currency basis, while operating margin is projected to expand by approximately 80 to 100 basis points in constant currency, led by gross margin expansion.
Ralph Lauren expects gross and operating margin expansion to be stronger during the first half (H1) of FY27, supported largely by the timing of key marketing activations compared with the prior year and lower prevailing tariff rates during H1.
Fibre2Fashion News Desk (CG)