Ralph Lauren Corp surpassed expectations in terms of profit and revenue growth in the fourth quarter, thanks to the success of its new seasonal collections. Despite the decline in luxury spending in the United States, the company managed to resonate with affluent shoppers, leading to an increase in its shares by almost 8%. Additionally, sales in China saw a significant rise of over 30%, indicating a strong rebound in the crucial luxury market.

Unlike some of its competitors, Ralph Lauren has been able to maintain a strong performance in the luxury industry. While others such as LVMH, Gucci-owner Kering, and Coach handbag maker Tapestry have faced challenges, Ralph Lauren’s focus on outdoor wear and women’s clothing collections has attracted more customers. The demand for the brand’s cable-knit sweaters and Polos has remained high, allowing the company to minimize promotional activities. In its largest market, North America, quarterly revenue only saw a smaller-than-expected decline of 3%. This resilience can be attributed to Ralph Lauren’s loyal and higher-income customer base, who continue to support the brand despite economic uncertainty.

Ralph Lauren’s Asia segment also experienced growth, with a 13% increase in revenue to $390 million. The company reported an overall net revenue rise of 1% to $1.54 billion for the fourth quarter, surpassing analyst estimates of a drop to $1.47 billion. These results highlight Ralph Lauren’s ability to adapt to changing market conditions and showcase its resilience.

Investors were particularly pleased with the company’s performance in the fourth quarter, as Ralph Lauren earned 90 cents per share, exceeding estimates of 61 cents when excluding special items. Looking forward, Ralph Lauren forecasts a low-single digit increase in revenue on a constant currency basis for fiscal year 2024. Analysts predict that the company’s revenue will rise by 5.6% to $6.73 billion.

Overall, Ralph Lauren’s strong performance in the fourth quarter demonstrates its ability to engage affluent shoppers and create value. Despite the challenges faced by the luxury industry, the company has managed to carve out its own space and remain competitive. With its focus on outdoor wear and women’s clothing collections, Ralph Lauren has positioned itself for continued success in the luxury market.

References:
Reuters – Ralph Lauren exceeds profit expectations
Business of Fashion – Ralph Lauren profits rebound on China demand, outdoor clothing