Ralph Lauren Corp beat first-quarter profit estimates as steady demand for its pricey denims and polo shirts in Europe and China offset slower sales in the US, sending its shares up 4 percent premarket on Wednesday.
Steady appetite from wealthier consumers has driven demand for designer fashion at companies such as Canada Goose and Miu Miu-owner Prada, even as their European rivals signalled cooling luxury demand due to challenges in China and a pullback in spending by âaspirationalâ shoppers.
Cautious inventory planning by wholesale retailers pulled down Ralph Laurenâs North America revenue by 4 percent to $608 million, but sales in Europe and Asia grew from last year.
That contrasts a recent string of bleak earnings from European rivals including the worldâs biggest luxury group LVMH, German fashion house Hugo Boss, Burberry and Gucci owner Kering.
Ralph Laurenâs net revenue rose 1 percent to $1.51 billion in the first quarter. Analysts on average had expected a decline of 0.46 percent, according to LSEG data.
It earned $2.70 per share on an adjusted basis, beating estimates of $2.47.
Adjusted gross margin also rose 170 basis points from the prior year to 70.5 percent, aided by lower cotton costs and full-price selling.
For the current quarter, it expects constant currency revenues to grow in the range of 3 percentt to 4 percent, compared with estimates for a 3 percent rise.
The Polo Bear sweaters maker reaffirmed its fiscal 2025 sales and margin expectations.
By Savyata Mishra; Editing by Devika Syamnath
Learn more:
Are Luxury Brands Still Worth It?
Luxuryâs results âsuperweekâ underscored just how far consumer demand has fallen. Macroeconomic gloom is part of the problem, but there may be deeper issues with big luxuryâs value proposition.
