Ralph Lauren (NYSE: RL) raises its outlook after an Asia-led 9% revenue gain

Posted by Kyle Jackson on Nov 5th, 2026

What happened

Ralph Lauren Corporation (NYSE: RL) raised its Fiscal 2027 outlook on Nov. 5 after second-quarter revenue grew 9% to $2.2 billion, with Asia leading.

Asia mattered most. Its revenue rose 28% to $571 million in the quarter, which ended Sept. 26. Total company revenue a year earlier was $2.01 billion.

Constant-currency revenue growth was 10%. Reported diluted earnings per share rose 47% to $4.87 from $3.32. Adjusted EPS, which leaves out restructuring-related and other net benefits, rose 22% to $4.64 from $3.79.

Key numbers

Metric	Latest	Change	Source
Second-quarter revenue (reported)	$2.19 billion	from $2.01 billion, +9.1%	SEC 8-K Exhibit 99.1
Diluted EPS (reported)	$4.87	from $3.32, +47%	SEC 8-K Exhibit 99.1
Diluted EPS (adjusted)	$4.64	from $3.79, +22%	SEC 8-K Exhibit 99.1
Adjusted gross margin	70.5%	from 68.0%, +2.5 percentage points	SEC 8-K Exhibit 99.1
Asia revenue	$571.3 million	from $445.6 million, +28.2%	SEC 8-K Exhibit 99.1
Cash and short-term investments	$1.8 billion	from $1.6 billion	SEC 8-K Exhibit 99.1

Read more: Ralph Lauren (RL) company research

Where the growth came from

Every region grew, the company said, but the pace was uneven. North America revenue rose 6% to $885 million, and comparable store sales there rose 6%. North America wholesale revenue rose 8%, including about 4 points from shipments that came earlier than planned from the second half of Fiscal 2027.

Europe revenue rose 1% to $696 million, or 3% in constant currency. European comparable store sales fell 1%. Brick-and-mortar fell 4% and digital rose 9%.

In Asia, China revenue rose more than 35% on both a reported and constant currency basis. The company credits comparable store sales growth and new distribution expansion. It opened 22 new owned and partnered stores across the business in the quarter.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

How much of the margin gain was one-time

Reported gross margin was 74.2%, 620 basis points above the prior year. The company says tariff refunds received in the quarter drove most of that gain. It leaves $82.3 million of tariff refund recoveries out of adjusted results.

Adjusted gross margin was 70.5%, up 250 basis points. The company credits growth in average unit retail (AUR), favorable geographic mix and lower product costs. Global direct-to-consumer comparable store sales rose 10%, and AUR rose 9%.

Adjusted operating margin was 15.7%, up 160 basis points, despite continued investment in marketing. The adjusted operating expense rate rose to 54.8% from 53.9%, so gross margin, not lower spending, carried the gain. Adjusted results also leave out $33.2 million of charitable donations made with tariff refund proceeds.

Why it matters

OptimistFi has argued that Ralph Lauren works if its brand turns heritage appeal into premium-priced, multi-category demand without a return to promotion-heavy apparel economics. The quarter supports that view. The core business grew 10%, and Women's Apparel, Outerwear and Handbags grew low double digits in constant currency, faster than the company overall.

Inventories ended the quarter down 9% from a year earlier even as revenue grew.

Three points limit the read. Tariff refunds, not pricing, drove the reported gross margin jump. Part of North America wholesale growth came from shipments pulled forward from the second half. And European comparable store sales declined, with brick-and-mortar stores down 4%.

The raised full-year outlook

Ralph Lauren now expects constant-currency revenue growth for Fiscal 2027 centered around 6% to 7% on a 52-week comparable basis. That is up from 5% to 6% before. Fiscal 2027 is a 53-week year, and the extra week should add 1 point to revenue growth.

The company now expects operating margin to expand about 80 to 100 basis points in constant currency, up from its prior outlook and driven mainly by gross margin expansion. It still expects the gain to be stronger in the first half, because of the timing of marketing activations and shifts in wholesale shipments.

Cash and shareholder returns

Ralph Lauren ended the quarter with $1.8 billion in cash and short-term investments, up from $1.6 billion a year earlier. Total debt was $1.2 billion in both periods.

It repurchased about $250 million of Class A common stock in the quarter and $500 million so far this fiscal year, which completes its Fiscal 2027 repurchase plans. With dividends, it has returned more than $600 million to shareholders this fiscal year. The quarterly dividend declared was $1.00 per share, up from $0.9125.

Six-month operating cash flow was $618.2 million, against $229.3 million a year earlier. Capital expenditures over the same six months were $114.2 million, down from $281.1 million.

What's next

The next test is third-quarter Fiscal 2027 results in the company's next quarterly report. The company guides to constant-currency revenue growth centered around 3% to 4%. That includes about 1 point of drag from wholesale timing shifts and strategic off-price reductions.

AUR still rising and gross margin gains holding without tariff refunds would strengthen the case. Slower unit pricing, or margin gains that lean on one-time items, would weaken it.