• by Sarah Mahoney  @mahoney_sarah, August 8, 2024

 Ralph Lauren’s latest results show the company is fending off the slump hovering over many luxury companies right now, and at least some of that is due to its strong athletic streak. The company says buzz around this year’s Olympic uniforms and a Wimbledon tennis collection drove customer engagement, helping the company pull off a 1% sales gain at a time when many luxury fashion brands are wilting.

In the first quarter of its fiscal 2025, the company says revenue rose to $1.5 billion on a reported basis and 3% in constant currency. Sales in North America slid 4% to $608 million, including a 3% gain in brick-and-mortar sales versus a 4% drop in ecommerce. Sales gained 6% in Europe and 4% in Asia. Net income climbed to $168.6 million, up from $132.1 million in the prior year's comparable period. Both sales and profits beat expectations.

“Although there has been a clear slowdown in revenue growth at Ralph Lauren, the company has done well to produce a 1% uplift,” writes analyst Neil Saunders, managing director of GlobalData, in his note on the results. “This may not look impressive, but it has been delivered against a difficult environment for luxury and consumer spending. It also bucks the performance of many other high-end brands and sets Ralph Lauren apart as one of the few players still driving growth in an area of the market where things have become a lot more subdued over the past year.” 

In its announcement, Ralph Lauren, executive chairman and chief creative officer, attributes the results to the company’s inspirational appeal. "From our intimate runway show at our New York studio this spring to our elegant Salone del Mobile presentation in Milan and this summer's Olympics, we are inviting people around the world to step into their dreams through authentic, timeless style."

Ralph Lauren’s relative stability follows slumps from major luxury companies, including LVMH, Kering, which owns Gucci, and Burberry.

In a conference call webcast for investors and recorded b Seeking Alpha, Patrice Louvet, president and chief executive officer of Ralph Lauren, said the Olympics and the recent Wimbledon collection helped. The company has been the official outfitter of Team USA for nine straight events since 2008 and is in its 19^th year of sponsoring Wimbledon.

“These activations are driving strong, sustainable growth in new customer acquisition and engagement,” he says. “In the first quarter, we added 1.3 million new consumers through our DTC businesses, consistent with our long-term expectations and led by higher value and younger cohorts. Our net promoter scores increased globally, led by Europe. And our online search grew strong double-digits, outpacing our competitive set. And we grew our social media followers by low teens to last year, surpassing 60 million.”

While he made it clear the company is not immune to the macroeconomic pressure weighing on other luxury brands, “Ralph Lauren is a powerful player, not just in fashion, but also in culture,” he says. “Our online search grew 25% this last quarter, outpacing our entire competitive set. And this was even before the Olympics kicked in.”