By Nicholas G. Miller

Ralph Lauren raised its full-year outlook after a strong quarter of sales as it focuses on higher-earning sales channels and deep-pocketed customers.

"Demand remains healthy and our core consumer is resilient, especially as we continue to shift our recruiting towards more full-price, less price-sensitive, higher basket-size new customers," said Chief Executive Patrice Louvet in the company's earnings call.

Louvet said the company was implementing additional price increases this fall and spring 2026 in response to tariffs. He added Ralph Lauren was opening new full-price retail stores while closing some outlet stores, which offer products at discounted prices.

Across its direct-to-consumer channels in the second-quarter, the company recorded 12% growth in average unit retail, the average price a product sells for, driven by higher prices and fewer discounts.

The company said tariff headwinds are expected to intensify in coming quarters after pulling forward imports earlier this year and that its fiscal fourth quarter would be the period most hurt by tariffs.

"We've got real pricing power," said Chief Financial Officer Justin Picicci. "We are going to lean more into [average unit retail] versus unit growth overall as we navigate those cost inflation pressures."

Ralph Lauren guided for fiscal 2026 revenue growth of 5% to 7% on a constant currency basis, up from its previous forecast of low- to mid-single digit revenue growth.

The company said it did have pricing strategies to boost demand if consumer sentiment were to weaken. "From a macro perspective, as price increases take root across different sectors, we are watching closely to see how consumers will respond," Louvet said.

The company has the pricing flexibility to still draw "those more value-oriented customers subsegments that exist in channels like wholesale and the outlets when the macro pressures sort of tighten," Picicci said. But those strategies would be implemented in a "very targeted, selective way," he added.

Shares fell 2% to $310.51. The stock is up 34% so far this year.

For its fiscal second quarter, the clothing and apparel company recorded net income of $207.5 million, or $3.32 a share, up from $147.9 million, or $2.31 a share, in the prior-year period.

Adjusted earnings were $3.79 a share. Analysts expected $3.45, according to FactSet.

Revenue rose 17% to $2.01 billion, beating Wall Street's expectation of $1.89 billion. In North America, revenue rose 13%, in Europe it increased 22% and in Asia it gained 17%.

Same-store sales rose 13%. Analysts expected 6.1%.

It guided for third-quarter revenue to be up mid-single digits on a constant currency basis.

Write to Nicholas G. Miller at nicholas.miller@wsj.com.

(END) Dow Jones Newswires

November 06, 2025 12:47 ET (17:47 GMT)

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