Fashion
US’ Ralph Lauren’s Q2 FY26 revenue surges 17% on strong global demand
The gross profit of the company reached $1.37 billion, with gross margin expanding 100 basis points (bps) to 68 per cent, driven by higher average unit retail (AUR), favourable product mix, and lower cotton costs. These gains offset inflationary and tariff-related pressures.
Ralph Lauren Corporation has reported better-than-expected Q2 FY26 results, with revenue rising 17 per cent YoY to $2 billion, driven by double-digit growth across all regions and strong DTC demand.
Gross margin expanded 100 bps to 68 per cent, while adjusted operating margin rose 270 bps to 14.1 per cent.
EPS increased 49 per cent to $3.79.
The company raised its FY26 revenue and margin outlook.
The operating income rose to $246 million, translating to a 12.2 per cent operating margin on a reported basis. Adjusted operating income stood at $283 million, with a margin of 14.1 per cent, up 270 basis points from last year. Europe led margin improvement with a 360-basis-point increase, while North America and Asia improved by 290 and 230 basis points respectively, Ralph Lauren said in a press release.
The operating expenses totalled $1.1 billion, up 15 per cent YoY. The company maintained strong cost discipline, with adjusted operating expenses rising 13 per cent and the expense ratio improving to 53.9 per cent from 55.5 per cent.
The earnings per diluted share climbed 44 per cent to $3.32 on a reported basis and 49 per cent to $3.79 on an adjusted basis, excluding restructuring and other charges. This compares with $2.31 reported and $2.54 adjusted in Q2 FY25. Net income totalled $207 million, while adjusted net income reached $237 million.
The revenue in North America grew 13 per cent to $832 million. Comparable store sales rose 13 per cent, driven by a 12 per cent increase in physical retail and a 15 per cent surge in digital commerce. Wholesale revenue also improved by 13 per cent.
Revenue in Europe advanced 22 per cent to $688 million on a reported basis and 15 per cent in constant currency. Comparable store sales increased 10 per cent, including 8 per cent growth in physical stores and 17 per cent in online sales. Wholesale sales jumped 26 per cent.
Revenue in Asia climbed 17 per cent to $446 million, or 16 per cent in constant currency. Comparable store sales improved 16 per cent, with brick-and-mortar up 14 per cent and digital commerce soaring 36 per cent. China was a key growth driver, posting over 30 per cent revenue growth, maintaining the pace seen in the first quarter.
The company continued to strengthen its brand equity, adding 1.5 million new customers through its DTC channels and achieving high-single-digit growth in social media followers to 67 million globally.
The company’s ‘always-on’ marketing approach drove robust consumer engagement, with activations around key global events such as Wimbledon, the US Open, and the Ryder Cup. The brand also drew attention through the Spring 2026 Women’s Collection show in New York, an immersive Goodwood Revival experience in England, and prominent celebrity moments featuring Taylor Swift, Travis Kelce, and Selena Gomez, the release said.
Core categories such as Women’s Apparel, Outerwear, and Handbags grew at strong double-digit rates, outpacing total company growth. The company launched several high-impact initiatives, including the Polo Ralph Lauren for Oak Bluffs collection in partnership with Morehouse and Spelman Colleges, the Ralph’s Club New York fragrance campaign featuring Usher, and an AI-powered styling tool ‘Ask Ralph’, showcasing its blend of heritage and innovation.
The brand furthered its ‘Win in Key Cities’ strategy by opening 38 new owned and partner-operated stores during the quarter, including new locations in Munich (Germany), Plano (Texas, US), Hangzhou (China), and Nagoya (Japan). It also completed the purchase of its Newbury Street store in Boston, reinforcing its long-term retail footprint.
Ralph Lauren ended the quarter with $1.6 billion in cash and short-term investments and $1.2 billion in total debt. Inventory stood at $1.3 billion, up 12 per cent YoY and aligned with demand trends. The company also retired $400 million in senior notes due in 2025 and repurchased $63 million of Class A common stock in Q2, totalling $313 million year-to-date (YTD).
So far in FY26, Ralph Lauren has returned approximately $420 million to shareholders through dividends and share buybacks.
“We are off to a strong start in the execution of our Next Great Chapter: Drive strategic plan introduced at our Investor Day in September, with second quarter performance outpacing our expectations across geographies, channels and consumer segments,” said Patrice Louvet, president and chief executive officer (CEO) at Ralph Lauren. “Our iconic brand and timeless products continue to resonate with consumers around the world, across generations and cultures, and we are reinforcing our inclusive luxury lifestyle position with disciplined investments to drive sustainable long-term growth and value creation well beyond this fiscal year.”
Ralph Lauren has raised its FY26 guidance, as the company now expects revenue growth of 5–7 per cent on a constant currency basis. The operating margin expansion of 60–80 basis points (bps), driven by cost efficiency and margin leverage. Foreign currency to provide a 30–50 bps tailwind to gross and operating margins.
For the third quarter, the company projects mid-single-digit revenue growth in constant currency, with operating margin expected to expand 60–80 basis points (bps).
“As we continue to navigate a highly dynamic global operating environment with agility, we are encouraged by our brand’s continued momentum through the start of the important Fall/Holiday season, enabling us to once again raise our fiscal 2026 outlook,” added Louvet.
Fibre2Fashion News Desk (SG)
In the Mumbai market, cotton yarn prices remained unchanged as the loom sector slowed production. Although spinning mills are looking to raise their selling rates, they have not found sufficient demand. A Mumbai-based trader told Fibre*Fashion, “Power and auto looms are facing limited fabric buying from the garment industry. Export prospects are still unclear. Domestic demand is also insufficient to support any price rise. Mills are comfortable with falling cotton prices, while buyers remain silent on yarn purchases.”
In Mumbai, ** carded yarn of warp and weft varieties were traded at ****;*,***–*,*** (~$**.**–**.**) and ****;*,***–*,*** per * kg (~$**.**–**.**) (excluding GST), respectively. Other prices include ** combed warp at ****;***–*** (~$*.**–*.**) per kg, ** carded weft at ****;*,***–*,*** (~$**.**–**.** per *.* kg, **/** carded warp at ****;***–*** (~$*.**–*.**) per kg, **/** carded warp at ****;***–*** (~$*.**–*.**) per kg and **/** combed warp at ****;***–*** (~$*.**–*.**) per kg, according to trade sources.
Bangladesh is already among the top suppliers of apparel to the US, particularly in basic knit and woven categories such as T-shirts, trousers and sweaters. A tariff advantage, even if modest, could sharpen its price competitiveness in high-volume, price-sensitive segments dominated by mass retailers.
The proposed Bangladesh–US trade understanding offering near zero-tariff access for garments has sparked debate in India’s textile sector.
While Bangladesh may gain a price edge in basic apparel, industry leaders believe the effective advantage could be limited to 2–3 per cent due to raw material dependence, capacity constraints and logistics costs.
However, Indian industry leaders argue that the net gain for Bangladesh may be restricted to around 2–3 per cent in effective competitiveness. They point to structural constraints, including Bangladesh’s heavy reliance on imported raw materials. A significant share of its fabric and yarn requirements is sourced from China and India, limiting flexibility in rules-of-origin compliance if strict value-addition conditions are attached to the deal.
Capacity limitations in spinning, weaving and man-made fibre processing are also seen as bottlenecks. While Bangladesh has built scale in garmenting, its upstream integration remains narrower than India’s diversified fibre-to-fashion base. Indian exporters emphasise that integrated supply chains offer advantages in speed, customisation and smaller batch production.
Logistics and lead times may further temper expectations. Distance from major US ports, coupled with infrastructure pressures and global shipping volatility, could offset part of the tariff benefit. In contrast, Indian suppliers have been investing in port connectivity, digital compliance systems and flexible production models to strengthen reliability.
Industry representatives also highlight that US buyers are increasingly factoring in sustainability, traceability and geopolitical risk. India’s growing adoption of renewable energy in textile clusters, compliance with global standards and broader product depth may help it retain strategic sourcing partnerships.
While some diversion of orders in basic categories cannot be ruled out, exporters believe the overall impact will be incremental rather than disruptive. The consensus view is that tariff preference alone is unlikely to override considerations of scale, compliance, diversification and long-term supply-chain resilience.
Fibre2Fashion News Desk (KUL)
“This bill protects Louisiana workers and American businesses, ensuring loopholes don’t hold them back,” Dr Cassidy said in a press release.
US Senators Bill Cassidy and Sheldon Whitehouse have introduced the Last Sale Valuation Act to close the ‘first sale’ customs loophole that lets importers underpay duties.
The bipartisan bill would base tariffs on final sale values, strengthen US Customs enforcement and curb duty evasion.
Supporters say it will protect American manufacturers, workers and federal revenue.
If passed, the bipartisan measure would grant clearer enforcement authority to US Customs and Border Protection (CBP), streamline valuation reviews and reduce disputes over documentation, while curbing mis-invoicing and related-party pricing schemes linked to tariff evasion and illicit financial activity.
The legislation has drawn support from the American Compass, the Coalition for a Prosperous America and the Southern Shrimp Alliance.
“Cassidy’s ‘Last Sale Valuation Act’ strengthens customs valuation by assessing duties on the final transaction value of goods entering the US,” said Mark A DiPlacido, senior political economist at the American Compass, adding that closing the judicially created ‘first sale’ loophole would reduce duty evasion, simplify enforcement and increase customs revenue.
Jon Toomey, president of the Coalition for a Prosperous America, said the bill is “an important first step in restoring customs integrity,” ensuring duties are paid on the true commercial value of imported goods and helping level the playing field for American manufacturers and workers.
Fibre2Fashion News Desk (CG)
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