Ralph Lauren Corp. is on a run.
The company — which has built and stuck to a model focused on core classic looks, brand heat, higher prices and corporate agility — saw that pay out in the third quarter and expects to pick up more momentum in the balance of the fiscal year.
Net income for the quarter increased 7.5 percent to $297.4 million, or $4.66 a diluted share, while adjusted earnings per share of $4.82 came in 29 cents ahead of analysts projections, according to Yahoo Finance.
Revenues for the three months ended Dec. 28 increased 11 percent to $2.1 billion.
Those results — and the trends since the holiday — have the company feeling more bullish for the year ahead.
Ralph Lauren is now looking for its annual revenues to increase 6 percent to 7 percent in constant currencies, a significant step up from the 3 percent to 4 percent increase projected in November.
Investors approved, sending shares of the company up 12.1 percent to $279 in premarket trading on Wall Street.
In an interview with WWD, Patrice Louvet, president and chief executive officer, attributed the momentum to some standout marketing, the value consumers see the brand and the company’s strategy of targeting key cities around the world.
“Brand awareness, brand consideration, purchase intent, net promoter scores — all these metrics have increased meaningfully and particularly among the next generation,” Louvet said.
Ralph Lauren’s fashion show, sports partnerships and other marketing activations translate into brand strength, the CEO said.
“The consumer is smart and they see where the value is,” he said. “Our value perception and luxury perception scores were up nicely this past quarter. As they look to make choices, I think the Ralph Lauren brand and products stand out from that standpoint because they see this as an investment, they see the value. This has been translating into really nice share gains over the past quarter.”
Louvet has also been working steadily to make and then keep the company more agile in a world that’s grown ever more complicated.
“We have developed multiple drivers of growth,” he said. “We have developed a very diversified supply chain. We have a broad range of products. We have a large geographic footprint. This allows us to navigate volatility here, uncertainty there. And we stay very focused on this diversification of growth drivers so that we’re not dependent on one market, one channel, one consumer loop. I think that is enabling us to navigate through COVID-[19], to navigate through the port strike risks, the Red Sea issues, the wars in Europe, and just stay really laser focused on our game plan, who we are and what we represent.”
The end result was a holiday that was merrier for Ralph Lauren than the industry in general.
In a statement, Ralph Lauren, executive chairman and chief creative officer, said: “I have always been inspired by the spirit of the holidays — the sense of optimism, celebrating the warmth of family and togetherness, and an enduring sense of tradition. We are proud that a growing number of customers are turning to us for these key moments and in their everyday lives.”
