Higher full-price selling, a 15% increase in average unit retail and surging Chinese demand are allowing Ralph Lauren to grow even as much of the global luxury market remains subdued.
Ralph Lauren raised its fiscal 2027 outlook after first-quarter revenue climbed 14% to $1.96 billion, ahead of analysts’ $1.87 billion estimate. Adjusted earnings reached $4.59 per share, versus the $4.32 expected by Wall Street. The company now forecasts constant-currency annual revenue growth of 5–6%.
Asia becomes the growth engine
Asia delivered the strongest regional performance, with reported revenue rising 24% to $589 million and comparable-store sales increasing 23%. China grew more than 40% year on year, supported by stronger brand engagement and events including Ralph Lauren’s first Polo Cup in Beijing.
North American revenue increased 13% to $740 million, with retail comparable sales up 9%. Wholesale jumped 22%, although roughly 15 percentage points came from resumed shipments to one luxury account and timing shifts from the previous quarter. Europe grew 7% to $594 million, but management remains cautious because geopolitical uncertainty and weaker tourism are affecting store traffic.
Premiumisation protects margins
Ralph Lauren increased average unit retail prices by 15% across its direct-to-consumer network while reducing promotions. Core products grew at a mid-teens rate, while women’s apparel, outerwear and handbags advanced more than 20% in constant currency.
Gross margin expanded 140 basis points to 73.7%, as stronger pricing and favourable product and channel mix more than offset higher tariffs and other product costs. Adjusted operating margin rose 170 basis points to 18.7%. Inventories declined 5% to $1.2 billion.
Suppliers face a higher-value sourcing model
The results favour suppliers capable of supporting premium materials, differentiated outerwear and womenswear, smaller high-value collections and reliable replenishment. Ralph Lauren is simultaneously reducing off-price exposure and lower-tier distribution, increasing the importance of product quality and full-price sell-through.
The next test will be whether China’s exceptional growth and North American momentum persist as tariff pressure rises. Ralph Lauren expects second-quarter constant-currency sales growth to moderate to around 5–6%, making sourcing discipline and product elevation increasingly important to sustaining margin gains.
