Early holiday demand and higher AURs lift margins and reinforce the company’s premium strategy
Ralph Lauren Corp. delivered a strong fiscal third quarter, exceeding earnings expectations and raising its full-year guidance as pricing power and disciplined promotions continued to reshape the business under chief executive Patrice Louvet.
Net income rose 21.6 percent to $361.6 million, while adjusted earnings per share reached $6.22, surpassing consensus estimates by $0.42. Revenue increased 12 percent to $2.4 billion, or 10 percent in constant currency. Adjusted operating margin expanded by 220 basis points to 20.9 percent, reflecting both higher full-price sell-through and ongoing operational efficiencies.
A key contributor was an 18 percent increase in average unit retail, driven by sustained premiumization and earlier-than-anticipated holiday shopping. Management noted that customers entered the season sooner, enabling the company to scale back planned promotions and preserve margin. The result was outsized full-price demand during the quarter, reinforcing the resilience of Ralph Lauren’s higher-value consumer base.
Performance was consistent across regions. North America revenue increased 8 percent to $1.1 billion, supported by a 7 percent rise in comparable store sales. Europe posted 12 percent growth to $676 million, while Asia led with a 22 percent increase to $620 million, highlighting continued momentum in the region.
Following the quarter, the company raised its full-year forecast. Ralph Lauren now expects revenue growth in the high-single to low-double digits on a constant-currency basis, an improvement from its prior outlook of 5 to 7 percent growth. Operating margin expansion is projected at 100 to 140 basis points, up from the earlier range of 60 to 80 basis points.
Investor response was more restrained. Shares declined approximately 7 percent in premarket trading, suggesting expectations had moved ahead of results despite the upgraded outlook.
From a creative standpoint, the holiday collection drew inspiration from the American West, a recurring reference point for executive chairman and chief creative officer Ralph Lauren. The aesthetic continuity supports the company’s broader strategy of reinforcing heritage while extracting greater value per unit.
The quarter underscores a familiar trajectory for Ralph Lauren: higher prices, fewer discounts, and margin-led growth. As the strategy continues to deliver, attention now turns to how long that pricing momentum can be sustained in an increasingly selective luxury environment.