Ralph Lauren (RL) Q1 2026 earnings summary

Executive summary

• First quarter fiscal 2026 revenue rose 14% year-over-year to $1.719 billion, with double-digit growth in all geographies, strong direct-to-consumer sales, and favorable foreign currency effects of $35 million.

• Net income increased 30.7% to $220.4 million, with diluted EPS up to $3.52 and adjusted EPS up 40% to $3.77, both exceeding expectations.

• Gross and operating margin expansion surpassed outlook, driven by full-price demand, disciplined expenses, and lower cotton costs.

• 1.4 million new direct-to-consumer customers acquired, with strong brand engagement and social media growth.

• $300 million returned to shareholders via dividends and share repurchases in the quarter.

Financial highlights

• Net revenues: $1.719 billion, up 13.7% year-over-year; constant currency growth of 11.4%.

• Net income: $220.4 million, up from $168.6 million year-over-year; adjusted net income was $236 million.

• Gross margin: 72.3% (up 180 bps year-over-year), with gross profit at $1.242 billion.

• Operating income: $274 million (reported), $293 million (adjusted); operating margin at 17.0% (adjusted), up 270 basis points.

• Direct-to-consumer comparable store sales grew 13% globally, with North America up 12%, Europe up 10%, and Asia up 18%.

Outlook and guidance

• Fiscal 2026 constant currency revenue growth now expected to be low to mid-single digits, up from prior low single-digit guidance, with FX benefiting growth by 150–200 basis points.

• Operating margin for fiscal 2026 expected to expand 40–60 basis points in constant currency.

• First half performance expected to be stronger, with high single to low double-digit revenue growth; second half outlook remains cautious due to tariff and macroeconomic uncertainties.

• Full year tax rate expected at 19%-20%; annual dividend increased by 10% and $250 million in share repurchases completed in Q1.

• Capital expenditures for FY2026 anticipated at 4–5% of revenue, focused on real estate, store openings, IT, and corporate renovations.