Ralph Lauren reported third quarter earnings of 277 million dollars or 4.19 dollars per diluted share, up 31 percent to prior year on a reported basis and 275 million dollars or 4.17 dollars per diluted share, up 24 percent on an adjusted basis.
In the third quarter, revenue increased 6 percent to 1.9 billion dollars on a reported basis and was up 5 percent in constant currency.
"We delivered a strong holiday, with continued progress on our Next Great Chapter: Accelerate plan and third quarter results that exceeded our expectations led by continued momentum in our direct-to-consumer channels," said Patrice Louvet, president and CEO of Ralph Lauren.
Revenue performance of Ralph Lauren across geographies
Ralph Lauren’s North America revenue in the third quarter was 933 million dollars, approximately flat to last year. In retail, comparable store sales increased 5 percent, led by a 6 percent increase in brick and mortar stores and 4 percent increase in digital commerce. North America wholesale revenue decreased 15 percent. The company completed 20 department store exits in the region during the fiscal year.
Europe revenue in the quarter increased 11 percent to 522 million dollars on a reported basis and 6 percent in constant currency. In retail, comparable store sales accelerated to 11 percent growth, with a 10 percent increase in brick and mortar stores and a 12 percent in digital commerce. Europe wholesale revenue increased 5 percent to prior year on a reported basis and was approximately flat in constant currency.
Revenues in Asia increased 16 percent to 446 million dollars on a reported basis and 17 percent in constant currency. Comparable store sales in Asia increased 14 percent, with a 13 percent increase in brick and mortar stores and a 25 percent increase in digital commerce.
Ralph Lauren expects FY24 revenues to increase low-single digit
For fiscal 2024, the company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, now centering around 2 percent compared to 1 percent to 2 percent previously.
The company continues to expect operating margin to expand approximately 30 to 50 basis points in constant currency to 12.3 percent to 12.5 percent, driven by gross margin expansion. Gross margin is now expected to increase approximately 140 to 180 basis points in constant currency compared to 120 to 170 basis points previously.
For the fourth quarter, the company expects revenue growth to be in a range centred around 2 percent in constant currency to last year. Operating margin is expected to expand approximately 350 to 400 basis points in constant currency, driven largely by gross margin expansion.