Ralph Lauren Corp. (NYSE:RL) stock climbed Thursday after the apparel company reported fiscal first-quarter results that topped Wall Street estimates and raised its full-year outlook.

Adjusted earnings came in at $4.59 per share, beating the analyst consensus estimate of $4.32. Revenue increased to $1.96 billion, above the $1.87 billion consensus estimate.

During the earnings conference call, Chief Financial Officer Justin Picicci said Ralph Lauren plans to accelerate the strategic reduction of off-price sales and exit lower-tier full-price stores during the second half of fiscal 2027 as part of its brand elevation strategy.

First-Quarter Performance

Revenue increased 14% year over year, or 13% in constant currency, driven by strong demand in Asia and North America.

Global direct-to-consumer comparable sales rose at a low-double-digit rate, supported by growth across digital and retail channels and a 15% increase in average unit retail. Wholesale revenue grew at a mid-teens rate on strong consumer demand.

Gross profit rose to $1.4 billion, while gross margin expanded 140 basis points to 73.7%, driven by higher average unit retail and a favorable channel and geographic mix.

Adjusted operating income increased to $366 million, with adjusted operating margin improving 170 basis points to 18.7%.

The company ended the quarter with $1.9 billion in cash and short-term investments.

Regional Performance

North America revenue increased 13% to $740 million. Comparable store sales rose 9%, led by a 10% increase in brick-and-mortar sales and an 8% increase in digital commerce. Wholesale revenue climbed 22%, helped by resumed shipments to a luxury wholesale partner and favorable shipment timing.

Europe revenue rose 7% to $594 million, or 5% in constant currency. Comparable store sales increased 1%, while digital commerce grew 6%. Wholesale revenue advanced 11% on a reported basis and 8% in constant currency, aided by earlier shipment timing.

Asia posted the strongest growth, with revenue rising 24% to $589 million, or 25% in constant currency. Comparable store sales increased 23%, driven by 22% growth in physical stores and 32% growth in digital commerce.

Capital Returns

Ralph Lauren returned more than $300 million to shareholders through dividends and share repurchases during the quarter.

Outlook

The company raised its fiscal 2027 outlook and now expects constant-currency revenue growth of 5% to 6%, up from its previous forecast of 4% to 5%. Foreign exchange is expected to reduce reported revenue growth by 50 to 100 basis points.

Ralph Lauren also increased its operating margin expansion forecast to 60 to 80 basis points, from 40 to 60 basis points previously. Gross margin is expected to expand by 50 to 70 basis points.

The company expects low-single-digit revenue growth in North America, low- to mid-single-digit growth in Europe and high-single-digit to low-double-digit growth in Asia.

For the fiscal second quarter, Ralph Lauren expects constant-currency revenue growth of about 5% to 6% and operating margin expansion of 80 to 100 basis points.

RL Price Action: Ralph Lauren shares were up 4.56% at $398.16 at the time of publication on Thursday, according to Benzinga Pro data.

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