Ralph Lauren rides the luxury boom as high-end clothing sales soar

A man walks past Ralph Lauren Corp’s flagship Polo store. on Fifth Avenue in New York, U.S., April 4, 2017. REUTERS/Brendan McDermid/File Photo

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Feb 3 (Reuters) – Ralph Lauren Corp (RL.N) raised its full-year revenue forecast on Thursday and became the latest luxury goods retailer to beat market estimates for holiday quarter revenue as demand for high-end clothing is skyrocketing.

Shares of the New York designer, who also announced a new $1.5 billion share buyback program, rose 4% in morning trading.

Global luxury groups, including Versace owner Capri Holdings (CPRI.N), LVMH (LVMH.PA) and Prada, posted strong results as shoppers emerging from lockdowns splurge on luxury fashion, propelling sales above pre-pandemic levels.

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Capri raised its full-year sales outlook on Wednesday and said it would further raise prices for its brands, including Michael Kors and Jimmy Choo, to take advantage of growing demand. Read more

The increase in luxury demand will continue if international travel can return to pre-pandemic levels over the next 12 to 24 months, said Zachary Warring, equity analyst at CFRA Research.

Ralph Lauren said it expects current quarter revenue to grow about 17% to 18% at constant currencies, helped by higher prices, which the company says will also offset the rising freight and raw material costs.

Chief executive Patrice Louvet said demand was strong to support “several quarters” of price increases.

“Our business is fundamentally healthier than it was 2 years ago. We are attracting a younger, more valuable, less price-sensitive consumer,” Louvet said on a call with analysts. .

The company said it expects revenue in constant currencies for fiscal 2022 to increase 39% to 41%, compared with the 34% to 36% increase it forecast earlier.

Ralph Lauren net sales increased 27% to $1.82 billion in the third quarter ended Dec. 25. Analysts on average had expected revenue of $1.64 billion, according to Refinitiv IBES data.

Revenue increased 30% in North America and 47% in Europe.

Excluding certain items, Ralph Lauren reported earnings of $2.94 per share, beating estimates of $2.17.

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Reporting by Uday Sampath in Bangalore; Editing by Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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