Ralph Lauren Corporation (RL Quick QuoteRL - Free Report) posted impressive fourth-quarter fiscal 2025 results, wherein the top and bottom lines increased year over year and surpassed the Zacks Consensus Estimate. The fiscal fourth-quarter results put an emphasis on the company’s strong brand momentum, operational discipline and strategic execution. The results mark a successful close to the Next Great Chapter: Accelerate plan, while setting the stage for continued growth in fiscal 2026 through diversified category, geographic and channel expansion.

RL reported adjusted earnings per share of $2.27, which surpassed the consensus estimate of $2.00. Also, the bottom line increased 32.7% from $1.71 per share in the year-earlier quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Ralph Lauren Corporation Price, Consensus and EPS Surprise

Ralph Lauren Corporation price-consensus-eps-surprise-chart | Ralph Lauren Corporation Quote

Net revenues grew 8% year over year to $1,697 million and beat the Zacks Consensus Estimate of $1,635 million. On a constant-currency (cc) basis, revenues were up 10% from the year-ago quarter. The top line witnessed growth across all regions, driven by brand strength, pricing efforts and continued strategic investments.

Global direct-to-consumer comparable store sales (comps) jumped 13%, backed by continued brand elevation, high single-digit growth in average unit retail (AUR) and positive retail comps at all regions and channels. The top line was negatively impacted by 210 basis points (bps) from foreign currency rates.

Shares of this Zacks Rank #3 (Hold) company have gained 24.9% in the past six months compared with the industry’s decline of 10.2%.

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Ralph Lauren’s Segmental Details

North America: The segment’s revenues were up 6% year over year to $705 million. Comps for North America’s retail channel rose 9% year over year, while those for brick-and-mortar stores and digital commerce moved up 9% and 8%, respectively. Revenues from the North America wholesale business rose 1% year over year.

Europe: The segment’s revenues rose 12% year over year to $526 million. The metric was up 16% on a currency-neutral basis. Comps for the retail channel in Europe were up 18%, while brick-and-mortar stores grew 16% year over year. Digital sales witnessed a 25% rise. Revenues for the segment’s wholesale business increased 10% on a reported basis and rose 14% on a cc basis, supported by solid reorder activity and favorable timing shifts, highlighting strong demand and execution across channels.

Asia: The segment’s revenues increased 9% year over year to $432 million on a reported basis and 13% on a currency-neutral basis. Comps in Asia were up 15%, backed by 13% growth in brick-and-mortar stores and a 27% increase in the digital business.

A Look at RL’s Margins & Costs

Ralph Lauren's adjusted gross profit margin expanded 200 bps year over year to 68.6%. This was mainly driven by favorable geographic, channel, and product mix, AUR growth, and lower cotton costs offsetting higher pressure from non-cotton product costs.

Adjusted operating expenses rose 9% from the year-ago period to $990 million. Adjusted operating expenses, as a percentage of sales, expanded 60 bps to 58.4%.

The company’s adjusted operating income was $175 million for the reported quarter. The adjusted operating margin increased 160 bps year over year to 10.3%.

Ralph Lauren’s Financials

Ralph Lauren ended fiscal 2025 with cash and short-term investments of $2.1 billion, total debt of $1.1 million, and total shareholders’ equity of $2.6 billion. Inventory gained 5% year over year to $950 million at the end of fiscal 2025.

The company reported $216 million in capital expenditures for fiscal 2025, up from $165 million in the prior year, primarily driven by investments in new store openings, renovations, digital enhancements, and technology.

The company repurchased nearly $425 million of Class A Common Stock in fiscal 2025, with $352 million remaining under its existing plan. Additionally, the board authorized a new $1.5 billion share repurchase program, reinforcing confidence in RL’s financial strength and long-term value creation.

RL returned about $625 million to its shareholders via dividends and repurchases of Class A common stock. The fourth quarter results also emphasized Ralph Lauren’s continued commitment to shareholder returns, as the board approved a 10% increase in the regular quarterly cash dividend to $0.9125 per share, bringing the annual dividend to $3.65 per share. The next dividend is scheduled for July 11, 2025, to shareholders of record at the close of business on June 27.

Ralph Lauren’s Store Update

As of March 29, 2025, Ralph Lauren had 564 directly operated stores and 671 concession shops globally. The directly operated stores included 252 Ralph Lauren and 312 Outlet stores. The company operated 116 licensed partner stores globally as of the same date.

RL’s Outlook for Q1 & FY26

The fiscal fourth-quarter results also reflect Ralph Lauren’s cautious yet optimistic outlook for fiscal 2026. Despite ongoing macroeconomic and geopolitical uncertainties, including inflation, tariffs, and supply chain disruptions, the company anticipates low-single-digit revenue growth in constant currency, with momentum expected to be stronger in the first half of the fiscal year.

For 2026, management now expects the operating margin to expand modestly in constant currency, primarily driven by operating expense leverage. Gross margin is projected to remain approximately flat, as AUR growth, lower cotton costs, and a favorable mix offset headwinds from higher tariffs and non-cotton material costs. Foreign currency impact is expected to be minimal across revenues and margins based on current exchange rates.

Management expects capital expenditure to be in the range of 4% to 5% of revenues for fiscal 2026. The fiscal 2026 tax rate is likely to be 20-22%.

For the fiscal first quarter, management anticipates revenues to grow in high single digits compared to last year on a constant currency basis. Operating margin is likely to expand around 150-200 bps in cc driven by gross margin expansion and slight operating expense leverage. Foreign currency is anticipated to hurt gross and operating margins at a minimal rate. The quarterly tax rate is likely to be 20-21%.

Key Picks

Some better-ranked stocks in the same space are Canada Goose (GOOS Quick QuoteGOOS - Free Report) , Allbirds Inc. (BIRD Quick QuoteBIRD - Free Report) and Stitch Fix (SFIX Quick QuoteSFIX - Free Report) .

Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales implies growth of 7.5% and 0.68%, respectively, from the year-ago actuals. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.

Allbirds is a lifestyle brand with naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Allbirds’ current financial year’s earnings implies growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.

Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2.

The Zacks Consensus Estimate for SFIX’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actual. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.