Lifestyle 05-08-2021 Hits: 1594

As luxury demand improves, Ralph Lauren raises its yearly revenue forecast

Lifestyle 05-08-2021 Hits: 1594

4th Aug 2021, Mumbai:

Ralph Lauren Corp boosted its yearly revenue forecast and reported an increase in quarterly sales on Tuesday, as the high-end garment maker draws customers with its marketing efforts and reaps the advantages of the post-lockdown luxury boom.

The New York-based retailer's stock surged more than 7% after exceeding revenue estimates in the first quarter, following competitors Michael Kors' Capri Holdings Ltd, LVMH, and Kering in reporting good earnings. As social events begin after a months-long hiatus, consumers have begun to spend more on handbags, shoes, and clothing this year, triggering a comeback in the luxury goods market.

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Ralph Lauren has expanded the promotion of its brand by sponsoring the United States Olympic team and events like Wimbledon and Major League Baseball to capitalize on the rising demand. Its marketing investment in the first quarter was more than twice that of the year before the pandemic, and nearly 40% more than in 2019. The business now forecasts a 25 percent to 30 percent growth in fiscal 2022 revenue on a 53-week reported basis, up from a 20 percent to 25 percent increase on a 52-week comparable basis.

"Against the backdrop of higher than projected re-openings across North America and Europe," said Chief Executive Officer Patrice Louvet, the company's brand and goods were connecting strongly with customers. Ralph Lauren's net sales nearly tripled to $1.38 billion in the quarter ended June 26 thanks to robust demand for their Polo shirts. According to Refinitiv IBES data, analysts projected revenue of $1.22 billion. On an adjusted basis, the firm earned $2.29 per share, compared to a loss of $1.82 per share a year ago.