Ralph Lauren 2025 Q4 Earnings Beats Expectations with 42% Surge in Net Income

Ralph Lauren (RL) reported its fiscal 2025 Q4 earnings on May 22nd, 2025. Ralph Lauren exceeded expectations for the fourth quarter of fiscal 2025, with earnings per diluted share rising to $2.03 on a reported basis and $2.27 on an adjusted basis, surpassing the anticipated $2.04 per share. The company also raised its dividend by 10% and expanded its share repurchase program by $1.5 billion. Looking ahead, Ralph Lauren projects a low-single-digit increase in revenue for fiscal 2026, reflecting cautiousness amid global uncertainties.

Revenue

Ralph Lauren's total revenue climbed 8.3% to reach $1.70 billion in Q4 2025, up from $1.57 billion in the same period the previous year. The company experienced robust sales growth across its segments, with North America reporting $704.7 million, Europe contributing $525.5 million, and Asia adding $431.6 million in revenue for the quarter.

Earnings/Net Income

Ralph Lauren's earnings per share (EPS) saw a significant increase of 45.8%, reaching $2.09 in Q4 2025, up from $1.43 in Q4 2024. The company’s net income grew by 42.2% to $129 million in Q4 2025 from $90.7 million in the previous year, reflecting strong financial performance.

The EPS figures indicate strong financial health and growth prospects for Ralph Lauren.

Post Earnings Price Action Review

Ralph Lauren's post-earnings strategy of purchasing shares after a quarterly revenue drop and holding them for 30 days has proven successful over the past three years, delivering remarkable returns. The strategy yielded a substantial 210.58% return, significantly outpacing the benchmark return of 45.97%. This excess return of 164.61% highlights the strategy's effectiveness in generating considerable gains relative to the benchmark. With a compound annual growth rate (CAGR) of 46.27%, the strategy demonstrates robust compounding effectiveness. However, the strategy's risk profile is highlighted by a Sharpe ratio of 1.26 and a maximum drawdown of -35.39%, suggesting moderate returns and a period of notable losses.

CEO Commentary

Patrice Louvet, President and CEO of Ralph Lauren, expressed satisfaction with the company's performance, noting 8% top-line growth and a 24% increase in adjusted operating profits. He acknowledged the challenges posed by a more uncertain global operating environment and consumer behavior but expressed confidence in the company’s agile organization and strong balance sheet. Louvet emphasized the company's success in delivering on strategic and financial commitments, underscoring the need for continued investment in brand desirability and market share to navigate future challenges.

Guidance

Ralph Lauren projects low single-digit revenue growth for fiscal 2026, primarily driven by expansion in Asia and Europe. For the first quarter, revenue is expected to increase by high single digits in constant currency, with operating margins anticipated to expand by 150 to 200 basis points. The company plans capital expenditures ranging from 4% to 5% of sales, focusing on key city ecosystems and technology investments.

Additional News

Recently, Ralph Lauren has announced a major expansion of its share repurchase program, authorizing an additional $1.5 billion for buying back shares of its Class A common stock. This move reflects the company’s strong confidence in its financial stability and long-term growth prospects. Additionally, the company has increased its regular quarterly cash dividend by 10% to $0.9125 per share, showcasing its commitment to returning value to shareholders. These measures align with Ralph Lauren's strategic focus on enhancing shareholder returns while maintaining a solid balance sheet.