Ralph Lauren Corp. expects its strong revenue growth to ease in the latter part of the year, striking a cautious note on US consumer spending.
The apparel company forecast revenue, excluding currency changes, to increase at a low-single-digit percentage in the fiscal year that’s expected to end in March 2026. Analysts on average projected about a 4 percent gain.
The company pointed to weakening consumer spending in the US as a headwind, and said growth will be heavily weighted to the first two quarters.
Ralph Lauren will lean into its “diversified supply chain, operating discipline, and strong balance sheet” as it manages “through ongoing macroeconomic uncertainty,” chief executive officer Patrice Louvet said in the statement.
The company’s shares rose about 1 percent at 9:38 a.m. on Thursday. The stock had gained 19 percent this year through Wednesday, compared to the S&P 500 Index being little changed.
While Ralph Lauren’s outlook would be a slowdown from its robust growth this year, it’s still a solid forecast and echoes the positive forecast issued earlier this month by Coach-owner Tapestry Inc.
Topping Wall Street
Ralph Lauren has recently been outperforming other brands. Last quarter, same-store sales rose 13 percent, nearly doubling Wall Street’s projections.
Tapestry and Ralph Lauren source fewer products from China than peers, reducing the hit from high US tariffs on the country. The prices of their high-end apparel and handbags are less than top-end luxury brands such as Louis Vuitton and Prada, positioning them well for the current wave of consumer caution, particularly in the US.
And Ralph Lauren generates a smaller portion of its revenue in China compared to other premium global brands and has performed well in the country. Sales were up more than 20 percent in the most recent quarter.
The company has been cutting back on discounts and selling more expensive and on-trend items in recent years to boost the cachet of the brand. Those steps have boosted profitability.
Ralph Lauren said it expects operating margin to expand modestly on a constant current basis, citing a continued increase in the average price of its items and reduced cotton costs, which will likely offset the cost of tariffs.
ByJeannette Neumann
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