Ralph Lauren Shines in Q3, Raises Outlook for the Year

Evan Clark

6 February 2025 at 8:40 am·4-min read

Updated 4:34 p.m. ET Feb. 6

Ralph Lauren Corp. is on a run.

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The company — which has built and stuck to a model focused on core classic looks, brand heat, higher prices and corporate agility — saw that pay out in the third quarter and expects to pick up more momentum in the balance of the fiscal year.

Net income for the quarter increased 7.5 percent to $297.4 million, or $4.66 a diluted share, while adjusted earnings per share of $4.82 came in 29 cents ahead of analysts projections, according to Yahoo Finance.

Revenues for the three months ended Dec. 28 increased 11 percent to $2.1 billion.

Those results — and the trends since the holiday — have the company feeling more bullish for the year ahead.

Ralph Lauren is now looking for its annual revenues to increase 6 to 7 percent in constant currencies, a significant step up from the 3 to 4 percent increase projected in November.

Investors approved, sending shares of the company up 9.7 percent to $273.14 on Wall Street.

In an interview with WWD, Patrice Louvet, president and chief executive officer, attributed the momentum to some standout marketing, the value consumers see the brand and the company’s strategy of targeting key cities around the world.

“Brand awareness, brand consideration, purchase intent, net promoter scores — all these metrics have increased meaningfully and particularly among the next generation,” Louvet said.

Ralph Lauren’s fashion show, sports partnerships and other marketing activations translate into brand strength, the CEO said.

“The consumer is smart and they see where the value is,” he said. “Our value perception and luxury perception scores were up nicely this past quarter. As they look to make choices, I think the Ralph Lauren brand and products stand out from that standpoint because they see this as an investment, they see the value. This has been translating into really nice share gains over the past quarter.”

Louvet has also been working steadily to make and then keep the company more agile in a world that’s grown ever more complicated.

“We have developed multiple drivers of growth,” he said. “We have developed a very diversified supply chain. We have a broad range of products. We have a large geographic footprint. This allows us to navigate volatility here, uncertainty there. And we stay very focused on this diversification of growth drivers so that we’re not dependent on one market, one channel, one consumer loop. I think that is enabling us to navigate through COVID-[19], to navigate through the port strike risks, the Red Sea issues, the wars in Europe, and just stay really laser focused on our game plan, who we are and what we represent.

“While our revenue is up 11 percent, our inventory is down 5 percent,” Louvet said. “And the way you reconcile those two numbers is through the fact that our teams have been very agile, have been able to lean and chase into demand, have been able to be much more diligent in how we manage inventory and where the product shows up at what point in time.”

The company has also seen new strength in North America, where revenues increased 7 percent to $998 million in the quarter.

That included a return to growth for the North American wholesale business, which expanded by 6 percent.

Louvet said that the culmination of years of effort, resetting the business, cutting back on distribution (the company plans on eliminating 60 department store doors this fiscal year) and investing with retailers to improve the experience.

“We were pleased to see the stabilization and some growth this past quarter on North America wholesale,” Louvet said, adding that the luxury wholesale tier is performing “quite strongly” in North America.

The end result was a holiday that was merrier for Ralph Lauren than the industry in general.

In a statement, Ralph Lauren, executive chairman and chief creative officer, said: “I have always been inspired by the spirit of the holidays — the sense of optimism, celebrating the warmth of family and togetherness, and an enduring sense of tradition. We are proud that a growing number of customers are turning to us for these key moments and in their everyday lives.”

Tradition has always been a touchstone for the Ralph Lauren brand — and it’s an attribute that Louvet has embraced during his more than seven years as CEO.

“What you see in our space is a lot of companies who have been driven by trends, who have benefited from trends have done quite well during that time,” Louvet said. “But at the risk of losing sight of who they are and what they represent, and therefore to your point on the consumer, confusing the consumer on who they are and what they stand for. What is serving us well now and has for many years is this clarity of when you look for Ralph Lauren and you know what you’re looking for, there is an element of consistency and authenticity and timelessness to what we offer that I think is quite appealing to consumers, particularly at a time when they need to be more discerning with their dollars.”

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