Ralph Lauren Sales Are on the Rise — Here’s Why

Ralph Lauren Corp.’s turnaround efforts appear to be taking hold, with the company reporting better-than-expected first-quarter earnings today.

The New York-based brand logged profits that were up nearly 11% to $142 million, or $1.77 per diluted share on an adjusted basis — compared with Wall Street’s predicted $1.66 per share. Revenues were slightly ahead of analysts’ forecasts of $1.42 billion, climbing 3% to $1.43 billion.

“Our performance was driven by strong continued momentum in our international markets and expense discipline across the organization,” said President and CEO Patrice Louvet, “while we continued to invest in elevating our brands and stabilize our North America business against a more volatile backdrop.”

The brand posted sales that increased 3% to $719 million on its home turf, a region that has faced challenges amid record-high brick-and-mortar closings. The wholesale business advanced 2%, while same-store sales gained 1%, with a 1% comp in its physical stores and flat numbers on RalphLauren.com. It also saw gains of 2% to $361 million and 4% to $259 million in its European and Asian markets, respectively.

Ralph Lauren noted that it had upped its marketing investment by 19% as it continues its efforts to lure more younger customers by tapping into millennial and Generation Z values. The brand launched its “Family is Who You Love” and Pride campaigns during the period, and it participated in Earth Day with the release of a shirt made of recycled plastic bottles and a dyeing process sans water.

For the full year, Ralph Lauren still expects revenues to improve in the range of 2% to 3%. Its strategic initiatives are centered on moving away from off-price and toward direct-to-consumer online sales as well as driving expansion in its international businesses.

“Our company continues to evolve with the world around us while staying true to our values and creating inspiring style that endures,” said executive chairman and chief creative officer Ralph Lauren. “And more than 50 years in, I am very encouraged by the work we are doing to strengthen the foundations of our business, energize our teams and elevate our iconic brands.”

Ralph Lauren’s shares were in the green 4.25% to $116 in premarket trading.

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