Ralph Lauren Corp raised its annual revenue outlook on Tuesday and posted a jump in quarterly sales as the high-end apparel maker attracts shoppers with its marketing campaigns and benefits from a post-lockdown luxury boom.
Shares of the New York-based retailer rose more than 7% as it also exceeded expectations for first-quarter revenue, joining rivals Michael Kors-owner Capri Holdings Ltd, LVMH and Kering in posting strong results.
Consumers have started spending more on handbags, shoes and clothes this year as social gatherings resume after a months-long gap, sparking a rebound in the luxury goods industry.
To capitalize on the resurgent demand, Ralph Lauren has increased the marketing of its brand by sponsoring the U.S. Olympic team and events such as Wimbledon and Major League Baseball.
Its marketing spend in the first quarter was double that of the pandemic hit year-ago period and about 40% higher than 2019.
The company now expects fiscal 2022 revenue to rise 25% to 30% on a 53-week reported basis, having previously estimated a 20% to 25% increase on a 52-week comparable basis.
Chief Executive Officer Patrice Louvet said the company's brand and products were resonating well with shoppers "against the backdrop of stronger than expected re-openings across North America and Europe."
Helped by strong demand for its Polo shirts, Ralph Lauren's net revenue rose nearly threefold to $1.38 billion in the quarter ended June 26. Analysts had expected revenue of $1.22 billion, according to Refinitiv IBES data. The company earned $2.29 per share on an adjusted basis, compared with a loss of $1.82 per share a year earlier.
(Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta and Aditya Soni) ((UdaySampath.Kumar@thomsonreuters.com; within U.S.+1 646 223 8780; Twitter: https://twitter.com/sampath_uday))