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Sep 28, 2024
Ralph Lauren Q2 2025 Earnings Report
Ralph Lauren's Q2 2025 performance exceeded expectations, driven by growth in Europe and Asia, and the company raised its full-year outlook.
Key Takeaways
Ralph Lauren reported a 6% increase in revenue, reaching $1.7 billion, with significant growth in Europe and Asia. The company's adjusted gross and operating margins expanded, and adjusted EPS rose by 21% to $2.54. Due to this strong performance, the company raised its full year fiscal 2025 revenue and adjusted operating margin expansion outlook.
Second quarter revenue increased 6% on both a reported and constant currency basis, led by Europe and Asia.
Global direct-to-consumer comparable store sales grew 10%, driven by positive retail comps across all regions.
Adjusted gross and operating margin expansion exceeded expectations, with brand elevation and expense discipline offsetting planned investments.
The company raised its full year fiscal 2025 revenue and adjusted operating margin expansion outlook.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The Company's outlook is based on its best assessment of the current geopolitical and macroeconomic environment, including inflationary pressures, other consumer spending-related headwinds, global supply chain disruptions and foreign currency volatility.
Positive Outlook
- Company now expects constant currency revenues to increase in a range of approximately 3% to 4%.
- Company now expects operating margin for Fiscal 2025 to expand approximately 110 to 130 basis points in constant currency, driven by gross margin expansion and operating expense leverage.
- Gross margin is expected to increase approximately 80 to 120 basis points in constant currency.
- For the third quarter, the Company expects constant currency revenues to grow approximately 3% to 4%.
- Operating margin for the third quarter is expected to expand approximately 100 to 140 basis points in constant currency, driven by gross margin expansion.
Challenges Ahead
- Foreign currency is expected to negatively impact revenues by approximately 40 to 60 basis points in Fiscal 2025.
- Foreign currency is expected to negatively impact gross and operating margins by approximately 20 basis points.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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