Dive Brief:
- Ralph Lauren Corporation Q2 revenue was $1.6 billion, up 3% from $1.58 billion year over year, the company reported Wednesday. This represents a slight ramp up from Q1’s growth of 1% reported in August.
- North America sales declined 1%, which the company said was still “improving sequentially and above our expectations, driven by better performance across all direct-to-consumer channels.” This showed significant improvement over Q1’s 10% drop in the region. Sales in Asia were up 10%, with China in particular up more than 20%. Meanwhile, Europe rose 7%.
- Overall retail sales totaled $994.3 million, up 8.4%over last year, while wholesale saw a 3.4% drop to $598.7 million from $619.5 the previous year, and licensing fell 7.8% to $40 million from $43.4 million. For the six months ended Sept. 30, the company’s revenue was $3.12 billion, up 1.92% over the same period last year.
Dive Insight:
Ralph is back and gaining momentum, following the designer’s return to the official New York Fashion Week runway in September after four years away. The move represented part of the overall company’s multi-tiered approach to “recruit high-value, younger consumers to the brand and re-engage existing consumers,” as stated in its earnings release.
Those efforts include continued sponsorships of athletic events including the U.S. Open, Wimbledon and Ryder Cup, plus the launch of Polo Ralph Lauren x Fortnite Race to Greatness and the brand’s limited edition P-Wing Fortnite Sneaker-Boot. Ralph Lauren also helped dress Beyoncé during her Renaissance World Tour.
The company said it has also raised some of its prices in a move to elevate the brand. For Q2, average unit retail went up by 10% across DTC channels, on top of an 18% increase last year.
DTC has been especially strong for the firm, which said it added 1.3 million new consumers to that business channel for Q2. In regard to online reach, the company said its social media followers grew globally to 55.9 million, representing an increase of “low-double-digits to last year.”
Ralph Lauren’s North American numbers will likely further improve following the company’s September announcement that it’s expanding its business in Canada, supported by a digital commerce launch and new store in Toronto, its first in the country. The company already had a wholesale and outlet presence in the country, and it said it plans to open more Ralph Lauren stores in Canada in the coming years.
"Our teams delivered solid second quarter performance ahead of our commitments with stronger top-line growth across all regions, supported by our iconic brand, pricing power and continued strategic investments," Patrice Louvet, president and CEO, said in the release. "While we continue to navigate an uncertain macro environment, we are driving offense across our Next Great Chapter: Accelerate plan's multiple growth drivers with agility, discipline and a clear focus on what we can control."
Tom Nikic, analyst for Wedbush, said in emailed comments to Fashion Dive that this earnings report represented another solid effort from the company.
“They've been surprisingly resilient this year, which we view as a testament to the management team,” said Nikic. “We're not sure they're completely out of the woods from a macro perspective, so we're still in wait-and-see mode, but… we're impressed by RL's execution in a tough environment.”
