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Ralph Lauren Corp beat first-quarter profit estimates as steady demand for its pricey denims and polo shirts in Europe and China offset slower sales in the US, sending its shares up 4 percent premarket on Wednesday.
Steady appetite from wealthier consumers has driven demand for designer fashion at companies such as Canada Goose and Miu Miu-owner Prada, even as their European rivals signalled cooling luxury demand due to challenges in China and a pullback in spending by “aspirational” shoppers.
Cautious inventory planning by wholesale retailers pulled down Ralph Lauren’s North America revenue by 4 percent to $608 million, but sales in Europe and Asia grew from last year.
That contrasts a recent string of bleak earnings from European rivals including the world’s biggest luxury group LVMH, German fashion house Hugo Boss, Burberry and Gucci owner Kering.
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Ralph Lauren’s net revenue rose 1 percent to $1.51 billion in the first quarter. Analysts on average had expected a decline of 0.46 percent, according to LSEG data.
It earned $2.70 per share on an adjusted basis, beating estimates of $2.47.
Adjusted gross margin also rose 170 basis points from the prior year to 70.5 percent, aided by lower cotton costs and full-price selling.
For the current quarter, it expects constant currency revenues to grow in the range of 3 percentt to 4 percent, compared with estimates for a 3 percent rise.
The Polo Bear sweaters maker reaffirmed its fiscal 2025 sales and margin expectations.
By Savyata Mishra; Editing by Devika Syamnath
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