Ralph Lauren exceeded expectations this third quarter, with global revenue up 11% and double-digit growth reported across all regions. The brand’s direct-to-consumer business, which now comprises two-thirds of overall sales, posted a 12% increase in comparable sales. Adjusted gross margin expanded by 190 basis points to 68.3%, driven by a 12% rise in average unit retail and a more than 500 basis point reduction in global discount rates.
“Our retail business led our performance again, delivering double-digit comp growth along with improving trends in digital,” said Patrice Louvet, president and CEO of Ralph Lauren. “DTC continues to be a leading indicator of our growing brand desirability and the power of our ecosystem model.”
In North America, revenue grew 7%, with an 8% increase in retail comps and a 6% rise in wholesale revenues, signaling a return to growth in that channel. Europe delivered a standout performance with a 16% revenue increase, while Asia saw a 15% rise, led by more than 20% growth in China.
CFO Justin Pacicchi highlighted the company’s strong financial position, noting $980 million in free cash flow and $500 million returned to shareholders year-to-date. The company raised its full-year revenue outlook to 6-7% growth, up from 3-4% previously.
Beyond the financials, Ralph Lauren is leaning heavily into experiential marketing and AI integration. Louvet pointed to the brand’s AI-powered Polo Bear in its New York storefront and immersive holiday activations at Saks Fifth Avenue. “We’re leveraging AI both creatively and operationally, from mood boards for our design teams to predictive buying models that optimize inventory management,” he said.
The brand added 1.9 million new DTC customers in the third quarter, with younger, higher-value consumers leading the charge. Social media followings surged past 64 million, fueled by growth on Instagram, TikTok and Douyin.
Ralph Lauren’s womenswear and handbag categories saw 20% growth, with standout products like the Polo ID bag in new seasonal colors and fabrications. The brand’s RRL capsule with Navajo artist Zephyrin M. and the Pink Pony collection further underscored its focus on cultural relevance and social responsibility.
In addition, Louvet emphasized the company’s success in diversifying its product offerings and expanding its global footprint. “Store opening highlights included Polo Boutiques in Hong Kong’s Pacific Place and Beijing’s China World Mall, featuring Ralph’s Coffee, as well as our new Ralph Lauren Collection shop at Harrods in London,” he said. The brand also tested new retail concepts like the “Candy Store” format in Edinburgh, emphasizing playful, color-driven designs.
“As we continue to test and learn with new store formats, the Candy Store represents a new smaller format concept for us with fun, highly flexible spaces,” said Louvet, explaining the new flexible format of the stores, which the brand has been rolling out in smaller markets. “The dual gender shops are curated with our most iconic Polo products that play on our love of color from sweaters and rugby shirts to a rainbow of pony caps and mesh polos.”
Ralph Lauren’s “Very Ralph” HBO documentary, launched in December in Shanghai, showcased the brand’s deep connection with Chinese consumers, drawing over 30 million livestream views and 67 billion impressions. “This was a special opportunity to share our brand values with Chinese consumers, and it exceeded all expectations,” Louvet said. The company’s success in China was underscored by over 20% sales growth, driven by innovative marketing campaigns and strong demand for core products. This is a definitive shift from other luxury brands that have struggled in the market.
In a significant milestone, Ralph Lauren himself was awarded the Presidential Medal of Freedom on January 6, recognizing his contributions as a visionary designer and philanthropist. “His vision continues to inspire us here at the company every day,” Louvet added.
“We’re excited about the magnitude of opportunities ahead across product, geographies and channels,” Louvet said. “With our brand strength, diversified growth drivers, and organizational agility, we’re confident in sustaining this momentum into the next year and beyond.”
