Ralph Lauren raises full-year guidance again following strong second quarter

US fashion group Ralph Lauren Corporation raised its guidance for the 2026/27 financial year for the second time on Thursday following better-than-expected second-quarter results. Net income rose by 43 percent to 296.6 million dollars, boosted by tariff refunds. Adjusted earnings per share increased by 22 percent.

In the second quarter ended September 26, group revenue increased by 9.1 percent to 2.19 billion dollars. On a constant-currency basis, growth reached 9.6 percent. All regions contributed to the increase, led by Asia. Comparable store sales in the direct-to-consumer business rose by 10 percent across the group.

Asia grows by more than a quarter

In Asia, revenue grew by 28.2 percent (up 28.1 percent at constant currency) to 571.3 million dollars. Growth in China exceeded 35 percent, driven by rising comparable sales and new points-of-sale.

In North America, revenue rose by 6.4 percent to 885.6 million dollars. Wholesale grew by 8 percent, with around four percentage points attributable to shipments pulled forward from the second half of the year. In Europe, growth remained moderate at 1.1 percent to 696.0 million dollars. On a constant-currency basis, the increase was 2.5 percent.

Tariff refunds drive reported margin

Reported gross margin stood at 74.2 percent, 620 basis points above the prior year. The majority of this increase stemmed from refunds of tariffs imposed under the IEEPA emergency act, following a ruling by the US Supreme Court declaring them inadmissible. Excluding this effect, the gross margin was 70.5 percent, an increase of 250 basis points.

Adjusted operating margin improved by 160 basis points to 15.7 percent, despite higher marketing expenditure. Adjusted operating profit rose by around 22 percent to 344.6 million dollars. Adjusted earnings per share stood at 4.64 dollars.

For the full year, Ralph Lauren now expects constant-currency revenue growth of 6 to 7 percent, up from the previous forecast of 5 to 6 percent. Operating margin is expected to increase by 80 to 100 basis points at constant currency, compared with the previous guidance of 60 to 80 basis points.