Ralph Lauren’s shares rose 8% after the company surprisingly beat profit estimates and reported a rise in Q4 revenue.
The company’s strong performance bucks the luxury spending trend as players such as LVMH, Gucci, and Tapestry have all reported softer demand in the United States.
Ralph Lauren, for one, has benefitted from focussing on its outdoor wear and women’s clothing collections. Increased demand for its Polos and cable-knit sweaters also made the company less reliant on promotions to drive sales. Overall, its quarterly revenue in North America saw a lower-than-expected decline of 3%.
According to CEO Patrice Louvet, demand among higher-income shoppers, which comprise the brand’s core customer base across North America and internationally, has remained strong.
“(The) more value-oriented consumers are a smaller part of our customer base and getting smaller and smaller, as we bring in more higher-value consumers,” Louvet said.
The New York City-based brand’s Q4 net revenue increased by 1% to $1.54 billion, higher than analysts’ estimate of seeing a drop to $1.47 billion, Reuters reported.
For fiscal 2024, the company expects revenue to rise in the low-single-digit on a constant currency basis, which would be below analysts’ expectations for a 5.6% increase to $6.73 billion.
“Ralph Lauren has been running a really good business on all fronts, so even in a volatile sort of time, they’ve been able to have a decent performance,” Jessica Ramirez, senior analyst at Jane Hali and Associates, told Reuters.