Ralph Lauren Corporation reported its financial results for the fourth quarter and full fiscal year 2026. The results exceeded market expectations. The company also reached a significant milestone. Annual sales exceeded the $8 billion mark for the first time in the company’s history.
In fiscal year 2026, net sales rose 14.6 percent on a reported basis to $8.11 billion (€6.99 billion). Adjusted for currency effects, annual sales increased by 11.8 percent. Net income on a reported basis was $941.1 million, down from $742.9 million a year ago. Diluted earnings per share for the full year were $15.11 on a reported basis and $16.59 on an adjusted basis.
Quarterly results accelerated by Asian expansion
In the fourth quarter, net sales increased 16.6 percent to $1.98 billion on a reported basis. Adjusted for currency effects, growth was 12.1 percent. Positive currency effects contributed around 450 basis points to sales growth.
Fourth-quarter net income increased to $151.6 million, or $2.45 per diluted share on a reported basis. Adjusted earnings per diluted share increased to $2.80, from $2.27 in the fourth quarter of fiscal 2025.
The quarterly development was driven primarily by the strong momentum in Asia. Net sales there climbed by 30.6 percent to $563.6 million on a reported basis. On a currency-neutral basis, growth was 27.6 percent, driven by exceptionally strong retail sales in China during the Chinese New Year period.
Europe also achieved solid results. Fourth-quarter revenue increased 17.9 percent to $619.6 million on a reported basis, or 6.2 percent on a constant currency basis.
In North America, net sales increased 8.2 percent to $762.7 million. The growth was driven in particular by comparable store sales in direct-to-consumer (D2C), which increased by 16 percent in the quarter. This made it possible to compensate for stagnating wholesale sales in the region, which were burdened by planned distribution reductions in lower wholesale channels.
Direct sales and digital growth
Comparable global D2C store sales increased 17 percent in the fourth quarter and 13 percent for the full year. This underlines the positive development of the retail business in all regions and sales channels.
Reported gross profit margin reached 69.7 percent in the fourth quarter. The adjusted gross margin also improved by 110 basis points to 69.7 percent compared to the previous year. Operating income for the quarter was $188.6 million on a reported basis, representing an operating margin of 9.5 percent. On an adjusted basis, operating income reached $218.3 million. The operating margin improved by 70 basis points to eleven percent.
A breakdown of sales channels illustrates the strength of the group’s retail activities. Direct sales generated $1.29 billion worldwide in the fourth quarter, compared to wholesale sales of $656 million. The licensing business contributed $32.8 million in the three-month period.
E-commerce developed stronger than stationary business in all important international markets in the fourth quarter. In North America, comparable digital sales grew 21 percent, while brick-and-mortar stores grew 14 percent. In Europe, digital retail rose 14 percent, compared to a two percent increase in brick-and-mortar retail. In Asia, digital retail grew by 31 percent, while stationary retail grew by 25 percent.
As of the end of fiscal year 2026, the Company’s global store network included 594 directly operated stores and 644 concessions. In total, the group operates 287 Ralph Lauren flagship stores and 307 outlet locations worldwide.
Mid-single-digit sales growth forecast for fiscal year 2027
“Our teams around the world have delivered a strong first year of our Next Great Chapter: Drive strategic plan with excellence and agility,” said Patrice Louvet, President and Chief Executive Officer of Ralph Lauren Corporation. Louvet expressed confidence in the company’s multi-engine growth strategy, operational discipline and use of artificial intelligence.
The company also presented its preliminary outlook for the 2027 financial year. Currency-adjusted sales growth is expected to be in the mid-single-digit percentage range of around four to five percent on a comparable 52-week basis. The operating margin is expected to improve by 40 to 60 basis points in constant currency, driven by moderate improvements in gross margin and operational economies of scale.
For the first quarter of the 2027 financial year, the group forecasts currency-adjusted sales growth in the mid to high single-digit percentage range. Operating margin is expected to improve by 80 to 120 basis points, supported by a lower applicable tariff rate of 10 percent. Based on current exchange rates, the company also expects a neutral impact of currency effects on the annual results.
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