Ralph Lauren Reports 10.8% Revenue Growth to $2.143 Billion in Q3 Fiscal 2025

Ralph Lauren Corporation reported a significant increase in financial performance for the third quarter of fiscal 2025, ending December 28, 2024. The company achieved net revenues of $2.143 billion, a 10.8% increase from $1.934 billion in the same period last year. Net income rose to $297.4 million, up from $276.6 million, resulting in a diluted earnings per share of $4.66, compared to $4.19 in the prior year. For the nine-month period, revenues reached $5.382 billion, a 6.3% increase from $5.064 billion, with net income climbing to $613.9 million from $555.6 million.

The company's gross profit margin improved, with gross profit as a percentage of net revenues increasing to 68.4% for the quarter, up from 66.5% a year earlier. This improvement was attributed to a favorable product mix, lower cotton costs, and growth in average unit retail prices, despite higher freight and product costs. Selling, general, and administrative expenses as a percentage of revenues decreased to 49.7% from 50.0%, reflecting operational efficiencies that offset rising costs in various categories.

Ralph Lauren's strategic initiatives included the ongoing Next Generation Transformation project, aimed at enhancing operational efficiency and transitioning towards a direct-to-consumer model. The company incurred $9.1 million in charges related to this project during the quarter. Additionally, the company continued to focus on geographic expansion, with notable revenue growth across all segments: North America, Europe, and Asia, with the Asia segment showing a 13.5% increase in revenues.

Operationally, Ralph Lauren's average store count decreased by 21 locations, primarily due to strategic closures in Asia and North America. However, comparable store sales increased by 12%, driven by a 13% rise in brick-and-mortar sales and an 8% increase in digital commerce. The company ended the quarter with $1.940 billion in cash and cash equivalents, reflecting a strong liquidity position bolstered by operating cash flows of $1.113 billion.

Looking ahead, Ralph Lauren remains cautious about the macroeconomic environment, including inflationary pressures and geopolitical uncertainties. The company plans to continue its focus on brand elevation and operational efficiency while navigating the challenges posed by the current retail landscape. The outlook for fiscal 2025 remains positive, with expectations for continued revenue growth and strategic investments in both physical and digital retail channels.