Ralph Lauren surpasses 8 billion dollars in annual revenue

Ralph Lauren Corporation, the US-based luxury lifestyle group, has reported its financial results for the fourth quarter and full fiscal year 2026, delivering performance that exceeded market expectations. The company crossed a significant financial milestone as annual revenues surpassed 8 billion dollars for the first time in its history.

For the full fiscal year 2026, net revenues rose 14.6 percent on a reported basis to 8.11 billion dollars. In constant currency, full year revenue increased 11.8 percent. Net income for the fiscal year reached 941.10 million dollars on a reported basis, up from 742.90 million dollars in the prior year. Diluted earnings per share for the full year stood at 15.11 dollars on a reported basis and 16.59 dollars on an adjusted basis.

Fourth quarter performance accelerated by Asian expansion

During the fourth quarter, net revenues increased 16.6 percent on a reported basis to 1.98 billion dollars. Growth stood at 12.1 percent in constant currency, with foreign currency translation providing a positive impact of approximately 450 basis points.

Fourth quarter net income increased to 151.60 million dollars, or 2.45 dollars per diluted share on a reported basis. Adjusted earnings per diluted share rose to 2.80 dollars, compared to 2.27 dollars in the fourth quarter of fiscal 2025.

The fourth quarter performance was led by strong momentum in Asia, where net revenues climbed 30.6 percent on a reported basis to 563.60 million dollars. Constant currency growth in the region was 27.6 percent, driven by exceptional retail sales in China during the Lunar New Year period. Europe also recorded solid results, with fourth quarter revenue up 17.9 percent on a reported basis to 619.60 million dollars, or 6.2 percent in constant currency.

In North America, net revenues increased 8.2 percent to 762.70 million dollars. The expansion was driven by direct-to-consumer (D2C) comparable store sales, which grew 16 percent during the quarter. This performance helped offset flat wholesale revenues in the region, which were impacted by planned distribution reductions in lower-tier wholesale channels.

Direct channels and digital growth

Global D2C comparable store sales increased 17 percent in the fourth quarter and 13 percent for the full year, showing positive retail performance across all geographical channels.

The reported gross profit margin for the fourth quarter reached 69.7 percent, while adjusted gross margin expanded 110 basis points over the prior year to 69.7 percent. Operating income for the quarter came in at 188.60 million dollars on a reported basis, representing an operating margin of 9.5 percent. On an adjusted basis, operating income reached 218.30 million dollars, with the operating margin expanding 70 basis points to 11 percent.

A breakdown of sales channels during the fourth quarter highlights the strength of the group's retail operations, which generated 1.29 billion dollars globally compared to wholesale revenues of 656 million dollars. Licensing operations contributed 32.80 million dollars during the three-month period. E-commerce outpaced physical store networks across all major international markets during the fourth quarter. In North America, digital commerce comparable sales grew 21 percent, while brick and mortar stores grew 14 percent. In Europe, digital commerce increased 14 percent, compared to a 2 percent increase in brick and mortar locations. Asia recorded a 31 percent increase in digital commerce alongside a 25 percent increase in physical retail operations.

At the end of fiscal 2026, the company expanded its global corporate retail footprint to 594 directly operated stores and 644 concessions. The global store network includes 287 Ralph Lauren flagship locations and 307 outlet stores.

Mid-single digit revenue growth projected for fiscal 2027

"Our teams around the world executed with excellence and agility to deliver a strong first year of our Next Great Chapter: Drive strategic plan," stated Patrice Louvet, the president and chief executive officer of Ralph Lauren Corporation. Louvet expressed confidence in the company's multi-engine growth strategy, operational discipline, and adoption of artificial intelligence technologies.

The company introduced its preliminary outlook for fiscal 2027, anticipating constant currency revenues to increase mid-single digits, centered around 4 percent to 5 percent on a 52-week comparable basis. The operating margin is projected to expand by 40 to 60 basis points in constant currency, driven by modest gross margin gains and operating expense leverage.

For the first quarter of fiscal 2027, constant currency revenues are forecast to grow mid to high-single digits, with the operating margin expanding 80 to 120 basis points, aided by a lower prevailing tariff rate of 10 percent. Based on current exchange rates, foreign currency is expected to have a neutral impact on full year results.