MW Ralph Lauren credits stronger-than-expected holiday season as stock rises on earnings boost

By James Rogers

Ralph Lauren does not expect to see an impact from U.S. tariffs on China, Mexico, and China, according to CFO Justin Picicci

Ralph Lauren Corp. shares were up 11.4% at noon Eastern time, riding a bump after the iconic clothing company's fiscal third-quarter results topped Wall Street's profit and sales estimates, boosted by better-than-expected holiday performance and raised guidance.

"I think what we're seeing is that our core consumer is resilient in an environment that stays pretty volatile," Ralph Lauren $(RL)$ Chief Executive Patrice Louvet said in an interview with CNBC Thursday.

The stock is on pace for its biggest daily percentage gain since Feb. 8, 2024, when it gained 16.79%, according to Dow Jones Market Data. That climb was also boosted by positive earnings.

"Each of our three regions outperformed our expectations this holiday," Louvet said in a conference call to discuss the results. "We were particularly encouraged by midteens growth in Europe, supported by broad-based strength across our markets, including a return to growth in the U.K."

Related: Ralph Lauren's stock jumps 6% after earnings blow past estimates

"Asia also continued to perform well with midteens growth, including China's sales up more than 20%," he added. "And North America accelerated to high single-digit growth this quarter on ongoing strength in DTC [direct-to-consumer] and a meaningful improvement in wholesale trends."

Louvet told CNBC that Ralph Lauren can "recruit a lot of younger consumers" in China.

Ralph Lauren had net income of $297 million, or $4.66 a share, for the quarter, up from $277 million, or $4.19 a share, in the prior year's quarter.

The company's adjusted fourth-quarter profit of $4.82 a share beat the FactSet consensus estimate of $4.53 a share. Revenue rose to $2.144 billion from $1.934 billion and beat the analyst revenue estimate of $2.014 billion.

Related: Ralph Lauren's stock rises on first-quarter earnings and revenue beat, boosted by Europe and Asia

Ralph Lauren's North American revenue grew 7% to $998 million, with comparable-store sales increasing 8%. In Europe, revenue grew 16% to $604 million as comparable-store sales increased 17%. Asia saw revenue increase 14% to $507 million on a reported basis and 15% in constant currency, with comparable-store sales increasing 14%.

Ralph Lauren also raised its full-year fiscal 2025 revenue guidance and now expects constant currency revenues to increase in a range of approximately 6% to 7%, up from its prior guidance of a 3% to 4% increase.

Ralph Lauren CFO Justin Picicci said the company does not expect to see an impact from U.S. tariffs on goods from China, Mexico and China.

"Our teams continue to leverage our agile and diversified supply chain to manage through global industry disruptions," he said. "With regards to the recently-announced U.S. tariffs on goods from China, Mexico and Canada, we currently anticipate a minimal annual impact."

Shares of Ralph Lauren are up 61.4% in the last 12 months, outpacing the S&P 500 index's SPX gain of 21.5%.

-James Rogers

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February 06, 2025 12:30 ET (17:30 GMT)

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