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Ralph Lauren Corp. dropped after sales growth decelerated in the most recent quarter, a sign that the company’s accessible luxury apparel is losing momentum with cautious shoppers.
North America same-store sales rose 7 percent in the most recent quarter, beating the average of analyst estimates compiled by Bloomberg, but less than the 8 percent growth in the same quarter last year. Same-store sales in Europe were flat for the quarter after rising 17 percent last year.
The shares fell 6.3 percent at 8:27 a.m. on Thursday. The stock was up 53 percent last year, its third consecutive annual gain, outpacing the advance of the S&P 500 Index.
Ralph Lauren has been gaining new customers by doubling ad spending on cinematic and sports themes, Bloomberg Intelligence analyst Mary Ross Gilbert said in a note. This comes as other brands like Gap and American Eagle ramp up advertising with celebrities including Sydney Sweeney and Katseye. Ralph Lauren is also continuing to outfit Team USA and the Paralympic athletes.
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But its strategy also includes fewer promotions, as well as slight price hikes, amid shopper concerns about affordability.
Fiscal third-quarter sales of $2.4 billion on a reported basis and adjusted earnings per share of $6.22 also beat expectations.
The New York-based company remains upbeat about the months ahead, lifting its full-year sales growth forecast. It now expects fiscal 2026 revenue to increase in the high-single to low-double digits on a constant currency basis, up from the previous outlook of a 5 percent to 7 percent increase.
By Dina Katgara
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