Key Takeaways
Europe and Asia will be repping the latest Ralph Lauren ( RL ) looks in the year ahead, but the luxury retailer's new releases may not sell as well in North America, executives said.
Ralph Lauren released better-than-expected fourth-quarter results Thursday and said it expects the momentum to carry over into its new fiscal year—outside the U.S. and Canada. Flagging consumer sentiment and concerns that tariffs will spur inflation may weigh on Ralph Lauren's performance in North America, executives said on the earnings call.
"When it comes to our core consumer, which, as you know, are more elevated consumers , they have remained resilient," CEO Patrice Louvet said, according to a transcript made available by AlphaSense. However, Louvet added that "we're in touch with reality, and like all of you, we continue to closely monitor the macros ."
The retailer said it plans to raise prices this fall in North America and Asia and is assessing additional increases to mitigate the impact of tariffs , executives said.
Ralph Lauren sees fiscal 2026 revenue increasing "approximately low-single digits to last year on a constant currency basis, with growth weighted to the first half of the fiscal year." However, CFO Justin Picicci said on the call that the company expects revenue in North America "overall down low- to mid-single digits." Picicci said growth is projected to be "led by Asia at that sort of high-single-digit mark, followed by Europe in that mid-single-digit growth range."
Retailer Taking 'More Cautious View on the Second Half'
"We believe it is prudent to take a more cautious view on the second half of the year based on a number of macro indicators," Picicci said, before listing "the impact of tariffs, weakening consumer confidence in the U.S. and increased risk of a broader consumer pullback."
Ralph Lauren's Q4 results topped expectations. Ralph Lauren reported adjusted earnings per share of $2.27 on revenue that rose 8% year-over-year to $1.70 billion, while analysts polled by Visible Alpha anticipated $1.99 and $1.65 billion, respectively.
Shares, which rose about 1.3% in recent trading, are up 20% this year.
Read the original article on Investopedia