Ralph Lauren (RL) Q2 2026 earnings summary

Executive summary

• Second quarter revenue rose 17% year-over-year to $2.011 billion, marking the highest Q2 revenues in over eight years, with double-digit growth in all regions and strong direct-to-consumer sales.

• Net income increased 40.3% to $207.5 million, and diluted EPS rose to $3.32, with adjusted EPS up 49% to $3.79, driven by higher operating income and lower share count.

• The company raised its full-year guidance for both constant currency revenue and adjusted operating margin expansion, reflecting strong brand momentum and robust performance in Asia and Europe.

• Strategic focus remains on brand elevation, core product growth, expansion in key cities, and leveraging technology and data analytics for consumer engagement.

• Transformation initiatives advanced, including the launch of AI-powered styling tools and the Next Generation Transformation project.

Financial highlights

• Q2 net revenues grew 17% year-over-year to $2.011 billion, with gross profit reaching $1.4 billion and gross margin up 100 basis points to 68.0%.

• Operating income was $246 million (12.2% margin), with adjusted operating income at $283 million (14.1% margin, up 270 basis points year-over-year).

• Adjusted gross margin expanded to 68.0%, driven by higher AUR, favorable mix, and lower cotton costs.

• Ended the quarter with $1.6 billion in cash and short-term investments and $1.2 billion in total debt.

• Returned $420 million to shareholders through dividends and share repurchases year-to-date.

Outlook and guidance

• Fiscal 2026 constant currency revenue growth now expected at 5–7%, up from prior low to mid-single digits, with foreign currency to benefit revenue by 200–250 basis points.

• Operating margin for fiscal 2026 projected to expand 60–80 basis points in constant currency.

• North America revenues now expected to be up slightly for the full year; Asia outlook raised to high single to low double digits.

• Q4 anticipated to see gross margin decline due to tariffs and tough prior-year comparisons.

• Full-year tax rate expected at 19–21%.