Ralph Lauren raises FY guidance as Q1 sales jump 14% to $1.7bn

Ralph Lauren has raised its full-year outlook after first-quarter revenues rose 14% year-on-year to $1.7bn (£1.3bn) in the period ended 29 June. 

The luxury fashion group attributed its performance to strong global demand and margin gains. 

Sales rose 11% in constant currency, with double-digit growth in Asia and Europe and an 8% increase in North America.

Meanwhile, operating income rose to $274m (£203.9m) on a reported basis, with an adjusted operating margin of 17%, up 2.7% year-on-year. 

During the quarter, Ralph Lauren added 1.4 million new customers through its direct-to-consumer channels, with a 13% rise in comparable store sales. Average unit retail prices rose 14%, supported by full-price selling and lower levels of promotion. 

Asia led regional growth with a 21% increase in sales to $474m (£352.7m), including more than 30% growth in China. European revenue rose 16% to $555m (£413m), while North American revenue was up 8% to $656m (£488.2m).

Gross margin expanded by 1.8 percentage points to 72.3%, supported by price increases, favourable geographic mix, and lower cotton costs.

The group opened 24 new stores during the period and returned $300m (£223.2m) to shareholders through dividends and share buybacks. It ended the quarter with $2.3bn (£1.7bn) in cash and short-term investments.

Patrice Louvet, president and chief executive of Ralph Lauren, said: “We delivered strong first quarter results across geographies, channels and consumer segments. While we continue to approach the current global operating environment with prudence, we are encouraged by the broad-based strength in our brand and our businesses.”

For the full year, Ralph Lauren said it now expects revenue to grow by a low- to mid-single-digit percentage in constant currency. Operating margin is forecast to expand by 40 to 60 basis points, up from previous guidance.