Ralph Lauren raised its annual revenue forecast after beating quarterly estimates on Thursday due to resilient demand for its high-priced Polo shirts and cotton cable knit sweaters across regions.
Shares of the company surged about 4 percent in early trading.
The affordable luxury apparel maker has seen resilient sales despite raising prices of select products, supported by loyalty of its affluent customer base.
Ralph Laurenâs visibility has been bolstered by celebrities such as Taylor Swift and Selena Gomez wearing its designs at special events. Coupled with investments in innovation and marketing, the company is attracting younger shoppers seeking trendy, affordable luxury styles.
Second quarter revenue from North America rose 13 percent on reported basis, while that from Europe increased 22 percent. For China, it was up more than 30 percent, in line with the previous quarter.
âThe brand sits in the âaffordable luxuryâ, so it is well placed to capture aspirational consumers who are trading down from ultra-luxury labels but still seeking quality and heritage,â said Suzy Davidkhanian, analyst with eMarketer.
Ralph Lauren joined peers such as LVMH, LâOréal, Hermès, and Estée Lauder in reporting improved sales in China, signalling hope in one of the biggest markets for luxury brands.
Lower promotions and cotton costs, coupled with price hikes, helped Ralph Lauren counter higher tariffs and non-material cotton costs, expanding its quarterly gross margin by 100 basis points to 68 percent.
It expects full-year revenue to increase 5 percent to 7 percent on a constant currency basis, compared with its prior forecast of a low- to mid-single-digit percentage growth.
Its quarterly revenue of $2.01 billion beat analystsâ estimates of $1.89 billion, according to data compiled by LSEG.
Ralph Laurenâs quarterly adjusted profit of $3.79 per share topped estimates of $3.44 per share.
By Anuja Bharat Mistry
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