Key Takeaways:
Ralph Lauren Corp. shares surged about 10 percent after the apparel maker reported a 16.6 percent rise in fourth-quarter revenue, fueled by a more than 50 percent sales boom in China.
"Sales in Asia led the revenue growth with 'exceptionally strong' results in China during the Lunar New Year," CEO Patrice Louvet said in a call with analysts.
The American fashion brand reported quarterly revenue of $1.98 billion, surpassing analysts' estimates of $1.85 billion. Adjusted earnings were $2.80 per share, also beating the consensus estimate of $2.55. Direct-to-consumer comparable store sales increased 17 percent.
The strong results show Ralph Lauren is successfully navigating a global luxury slowdown that has hurt competitors like LVMH. The company's strategy of attracting younger shoppers while maintaining its multi-generational appeal and varied price points has analysts attributing its success to a resilient turnaround plan.
Despite the strong quarter, executives warned of potential headwinds in Europe. The company is taking a "more prudent view" of the region due to pressures on consumer sentiment and high energy prices. For the current fiscal year, Ralph Lauren forecasts revenue growth of 4 to 5 percent, while the current quarter's revenue is expected to increase in the mid- to high-single digits.
This article is for informational purposes only and does not constitute investment advice.
