Ralph Lauren reported fiscal Q2 2026 revenue of $2.01 billion, a 17 % year‑over‑year increase and 14 % on a constant‑currency basis. The jump was driven by a 20 % rise in North American sales, a 15 % lift in Europe, and a 12 % gain in Asia, offsetting a modest 3 % decline in wholesale volumes. Adjusted earnings per diluted share reached $3.79, beating the consensus estimate of $3.45 by $0.34, or 9.9 %. The beat was largely the result of disciplined cost management and a favorable product mix that shifted toward higher‑margin apparel and accessories.
Operating income climbed to $246 million, up 18 % from $203 million in Q2 2025. Adjusted operating margin expanded to 14.1 %, a 270‑basis‑point lift from 11.4 % the prior year. The margin improvement stemmed from higher average unit retail, driven by a 5 % price increase in the U.S. direct‑to‑consumer channel, and a shift toward premium product categories that command stronger gross margins. The company also reported a 12 % increase in inventory to $1.3 billion, reflecting strategic build‑out of its global supply chain to support the stronger demand.
Segment analysis shows North America generated $832.4 million in revenue, up 18 % YoY, while Europe contributed $688.3 million, a 15 % rise, and Asia delivered $445.6 million, up 12 %. Direct‑to‑consumer sales grew 22 % in the U.S., driven by a 30 % increase in online orders, whereas wholesale sales fell 4 % as retailers adjusted inventory levels. The stronger DTC performance helped offset the wholesale dip and contributed to the overall margin expansion.
Management raised its full‑year 2026 outlook, now projecting constant‑currency revenue growth of 5 % to 7 % and an operating margin expansion of 60 to 80 basis points. The guidance represents a lift from the prior forecast of 3 % to 5 % revenue growth and a 30‑basis‑point margin increase, reflecting confidence in sustained demand and continued pricing power. The company also reiterated its commitment to shareholder returns, noting cash and short‑term investments of $1.6 billion and net debt of $1.2 billion.
Patrice Louvet, President and CEO, said the quarter demonstrated “strong broad‑based momentum across all regions and channels, with no significant consumer headwinds.” Executive Chairman and Chief Creative Officer, Ralph Lauren, added that the brand’s “timeless style and quality continue to resonate with consumers worldwide.” These comments underscore management’s view that the company’s brand equity and strategic focus on direct‑to‑consumer channels are key drivers of the positive results.
Analysts reacted favorably to the earnings beat, noting that the margin expansion and strong DTC growth signal resilience amid a cautious macro environment. The market’s positive response was driven by the company’s ability to maintain pricing power, control costs, and execute a successful product mix shift, all of which support the raised guidance.
Capital allocation remains a priority, with a $63 million share‑repurchase in Q2 2026 bringing total repurchases for the fiscal year to $313 million. The company’s solid balance sheet, highlighted by $1.6 billion in cash and $1.2 billion in net debt, positions it well to fund growth initiatives and return value to shareholders.
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