• by Sarah Mahoney  @mahoney_sarah, November 8, 2024

While many luxury brands have been taking a beating, Ralph Lauren wrapped up the second quarter in style, with both sales and profits that surpassed expectations. Sales rose to $1.73 billion from $1.63 billion in the year-ago period. And net income inched up to $147.9 million from $146.9 million a year ago.

At a time when most retailers and apparel brands are muting their forecasts for the coming holidays, the New York-based company cranked up expectations and now anticipates revenues to increase in a range of approximately 3% to 4%, based on brand momentum.

"Our teams are executing well on our long-term strategy, injecting energy and excitement behind our storied brand through what continues to be a choppy global operating environment," said Patrice Louvet, president and chief executive officer, in a company announcement. "Our strong business performance across every geography this quarter underscores the resilience of our diversified growth drivers and our elevated consumer base, giving us confidence to take up our financial outlook for the full fiscal year ahead of the all-important holiday season."

Ralph Lauren also benefited from high-visibility appearances in global sporting events, including the Paris Olympics and Wimbledon.

The company's performance sharply contrasts with other luxury brands, with the category in a relatively rare moment of disarray. While there are exceptions, with Prada and Hermes putting up impressive gains, many of the best-known brands are struggling, as demonstrated by recent earnings reports.

Revenue at LVHM, parent of Louis Vuitton, Tiffany and Dior, posted some of the sharpest sales declines since the pandemic. Kering, owner of Gucci, just notched a sales drop of 16%.

Some are seeking solutions in mergers, and recent results show why. At Capri, whose proposed marriage to Tapestry is facing legal challenges, sales are plummeting:  Capri just announced a 28% drop in sales at Versace and a 16% drop at Michael Kors.

Burberry’s name is in the rumor mill, too, with reports speculating that it will be acquired by Moncler, the Italian luxury company. Burberry’s sales fell 22% in the most recent period, with results expected this week.

“As a narrative of resurgence and resilience emerges, luxury brands must rethink the way they build their value proposition to prioritize trust and connection with consumers,” writes Claudia D’Arpizio, a Bain & Company partner, in the consulting company’s most recent analysis of the global luxury sector. “Many are navigating a momentary crisis, driven by macroeconomic pressures and a polarized customer base. This presents a unique moment to define a new way forward for their brands, fostering a more personal connection with their customers.”