Ralph Lauren Q2 Sales Top Estimates, But Stock Drops Despite Strong Performance

Ralph Lauren (NYSE:RL) Q2 CY2025 results beat Wall Street's revenue expectations with sales up 13.7% YoY to $1.72 billion. Non-GAAP profit was $3.77 per share, 7.8% above analysts' consensus estimates. The company reported a 15.9% operating margin and 20.3% EBITDA margin. However, free cash flow was -$11.2 million, down from $243.9 million in the same quarter last year.

Ralph Lauren Corporation (RL) reported its second-quarter (Q2) fiscal year 2025 results, which exceeded Wall Street's revenue expectations. The company's revenue grew by 13.7% year-over-year (YoY) to $1.72 billion, surpassing the Zacks Consensus Estimate of $1.65 billion [1]. Ralph Lauren's non-GAAP earnings per share (EPS) were $3.77, which was 7.8% above the consensus estimate of $3.48 [1].

The company's operating margin improved to 15.9%, up from 14.8% in the same quarter last year, while the EBITDA margin reached 20.3%, up from 19.3% [1]. However, free cash flow (FCF) decreased to -$11.2 million, down from $243.9 million in the same quarter last year, primarily due to higher capital expenditures [1].

Geographically, Ralph Lauren's net revenues from North America increased by 7.9% YoY to $656.2 million, while revenues from Asia jumped by 21.3% to $474 million. Revenues from Europe grew by 15.7% to $554.5 million, and net revenues from retail and wholesale segments increased by 16.3% and 8.5%, respectively [1].

Shares of Ralph Lauren have returned +4.3% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term [1].

References:
[1] https://www.nasdaq.com/articles/compared-estimates-ralph-lauren-rl-q1-earnings-look-key-metrics
[2] https://finance.yahoo.com/quote/ELF/news/