Ralph Lauren shares jump 10% as strong China sales help drive growth

By Anuja Bharat Mistry and Danielle Kaye

May 21 (Reuters) – Ralph Lauren shares surged about 10% in morning trading on Thursday after the high-end apparel brand beat quarterly revenue estimates, buoyed by strong sales in China as affluent shoppers continued to buy Polo shirts and cable-knit jumpers.

Sales in Asia led the revenue growth with “exceptionally strong” results in China during the Lunar New Year, CEO Patrice Louvet said in a call with analysts, pointing to more than 50% sales growth in the country. Wall Street investors are focused on how luxury brands are performing in the Chinese market, where consumers have shown signs of strain in recent months and luxury spending has faltered.

The jump in shares put Ralph Lauren’s stock on track for its largest daily increase since April 2025.

The nearly 60-year-old American label reported quarterly revenue of $1.98 billion, above analysts’ estimate of $1.85 billion. The company forecast mid-single-digit revenue growth for the current fiscal year, while warning of some strain from the Middle East conflict and high energy prices.

Founded by designer Ralph Lauren in 1967 as a line of ties before rising to the top ranks of American fashion, the brand is among companies that have recently bucked the trend of a slowdown in the global luxury sector. It embarked on a turnaround plan about a decade ago and analysts attribute its recent success in part to the brand’s growing appeal among a younger generation of shoppers, while maintaining a multi-generational consumer base.

Under the leadership of Louvet, who took charge in 2017, Ralph Lauren has made a concerted effort to lure in a new generation through youth-focused products and social media engagement.

Analysts have also attributed its recent momentum to its market position as a value player compared to many luxury competitors.

Ralph Lauren sells $118 polo shirts and $498 leather bags – in addition to bags that well exceed $3,000. Its range of price points has helped maintain its appeal, analysts noted, even as shoppers balk at price hikes from major luxury players.

“Ralph Lauren has had the benefit that it had more room to grow to Asia and Europe as compared with other luxury apparel firms,” said David Swartz, analyst at Morningstar.

The U.S. brand’s strong results stand in contrast to a quarterly report last month from LVMH , a bellwether for the global luxury sector, which said the war in Iran shaved at ​least 1 percentage point off global sales due to weaker spending in Gulf shopping hubs such as Dubai. Global quarterly sales at the French luxury giant rose by just 1% when adjusted for currency swings, slightly below analyst estimates.

On an adjusted basis, Ralph Lauren posted earnings per share of $2.80 for the reported quarter, topping an estimate of $2.55 per share. The company, which implemented selective price hikes over past quarters, sees gains from strong full-price sales across its apparel and accessories brands.

PRESSURE IN EUROPE

Ralph Lauren reported double-digit revenue growth on a reported basis in Europe in the recently ended quarter to $620 million. But a drop in tourism to Europe due to Middle East tensions as well as strain on European shoppers’ wallets could dampen its results in the region this year, executives warned.

“We are taking a more prudent view of the Europe operating environment looking ahead, given some of the energy and consumer sentiment pressures that we’re seeing there,” Louvet told analysts.

The company said its outlook does not currently assume any potential impact from tariff refunds.

It now expects revenue in its current quarter, which ends in June, to increase in the mid- to high-single digits on a constant currency basis, compared with analysts’ estimate of a 6.9% rise, according to data compiled by LSEG.

It also expects annual constant currency revenues to increase by about mid-single digits over last year, centered around 4% to 5%.

(Reporting by Anuja Bharat Mistry in Bengaluru and Danielle Kaye in New York; Editing by Pooja Desai)