Ralph Lauren Raises Prices and Enhances Image Amidst Challenging North American Environment
Ralph Lauren Corporation has unveiled its financial results for the first quarter of Fiscal 2024, which ended on July 1. The report highlights a 1 percent rise in revenues compared to the previous year, reaching $1.5 billion from $1.49 billion in constant currencies. Notably, this growth was primarily driven by the European and Asian markets.
Net income for the brand also saw a positive trend, increasing by 7 percent to $132.1 million, equivalent to $1.96 per diluted share. This upswing contrasts with the previous year’s net income of $123.4 million, or $1.73 per share.
When focusing on adjusted earnings per share, which take into account restructuring-related charges, the figures stood at $2.34.
In terms of gross profit for the first quarter of Fiscal 2024, the company reported $1.0 billion, resulting in a gross margin of 69.0 percent.
Our solid first quarter performance highlights the unique power and relevance of our iconic brand with consumers around the world along with our diversified engines of growth, and we are reaffirming our full year outlook. As we continue to execute on our Next Great Chapter: Accelerate plan, our teams are staying true to our creative vision while remaining agile and focused on what we can control in the context of a choppy environment.
Patrice Louvet, President and Chief Executive Officer Ralph Lauren
Despite Ralph Lauren’s efforts to elevate its brand and image, the company has not been immune to economic challenges. It still caters to a value-oriented customer base, which has led to some impacts from inflation.
The North American market reported a 10 percent decline in revenues, amounting to $632 million. However, around half of this decrease was attributed to the shifting of spring receipts into the previous year’s fourth quarter, as the company adjusted its timing in the post-pandemic period.
The brand’s comparable store sales in North America took a hit, decreasing by 6 percent. This decline included an 8 percent drop in digital commerce and a 5 percent reduction in brick and mortar sales.
Wholesale sales in the North American market fell by 16 percent, though without the timing shift, the decline would have been in the mid-single digits.
On the positive side, the European market witnessed an 8 percent increase in revenues, reaching $450 million. Meanwhile, the Asian market showed even stronger growth, with a 13 percent increase in revenues, amounting to $378 million.
For the rest of Fiscal 2024, Ralph Lauren anticipates a low-single-digit increase in revenues compared to the previous year, based on constant currency considerations.