Ralph Lauren net income up 28%

Dive Brief:

• Ralph Lauren Corporation’s first-quarter 2025 revenue was up 1% to $1.5 billion, per a Wednesday release. 
• The company’s net income rose 27.6% for the period to $169 million, up from $132 million year over year. Neil Saunders, managing director of GlobalData, attributed the improvement to general cost savings, a decrease in cotton costs and better margins due to the company’s shift to retail.
• Global DTC sales increased 5%, and the company also raised its DTC average unit retail by 6% for the period. The increase comes after a 15% AUR increase last year, which the company said reflects the durability of its “multi-pronged elevation approach.”

Dive Insight:

Ralph Lauren’s revenue growth has slowed somewhat since 2024, but while the company’s first quarter uptick “may not look impressive…it has been delivered against a very difficult environment for luxury and consumer spending,” said Saunders in emailed comments.

“It also bucks the performance of many other high-end brands and sets Ralph Lauren apart as one of the few players still driving growth in an area of the market where things have become a lot more subdued over the past year,” Saunders said.

By region, Q1 revenue was up single digits in both Europe and Asia, but fell 3.7% in North America. The company attributed the drop to “planned declines in wholesale” and added that stronger DTC performance more than offset the wholesale drop-off.

The results came in ahead of expectations, Patrice Louvet, president and CEO, said in the release.

“We delivered a solid start to the year…led by our direct-to-consumer and international businesses,” Louvet said. “The powerful combination of our brand strength and diverse growth drivers — together with our culture of agility and operating discipline — gives us confidence that our long-term strategy will continue to deliver even through these dynamic times.”

Global wholesale fell 5.2%, and Saunders said the decline “underlines the fact many trade buyers are becoming more cautious and conservative.” The issue, Saunders added, has been “exacerbated by Ralph Lauren’s own modest pullback from the channel.”

Executive Chairman and Chief Creative Officer Ralph Lauren said in the release that the brand “has always been about inspiring a better life” and touted the company’s spring women’s runway presentation in New York as well as its involvement as an official outfitter of Team USA at this summer’s Olympic games. The company also showed at Milan’s Salone del Mobile in April and presented its Purple Label menswear collection in Milan in June.

“Ralph Lauren is still relatively early in its reinvention which, compared to rivals, gives it more levers to pull to engineer better numbers,” Saunders said. “Nevertheless, the company deserves credit for its strong operating disciplines.”

Saunders added that Ralph Lauren “is benefitting from attracting more younger consumers to the brand” through improved marketing and product innovation.

“We also believe that Ralph Lauren’s styling and brand position — which has always focused on classic, quiet luxury — is very favorable to current trends where consumers are not looking to flaunt their wealth and want products that have some longevity,” Saunders said.

The company confirmed its full-year outlook and projected low single-digit revenue growth.