Ralph Lauren Corporation (RL) · Q2 2026 results and valuation

At 8.0% growth a year (3-year revenue growth), the model's fair value is $255.71 a share — the stock trades 54% above it. Today's price assumes 14.1% growth a year.

1. Key theme

   The 13% growth reflected better-than-expected performance in both direct-to-consumer and wholesale channels.

   Source quote

   “Total company first quarter revenue grew 13%, reflecting better-than-expected performance in both our direct-to-consumer and wholesale channels. But first, let me walk you through our financial highlights from the first quarter, which, as a reminder, are provided on a constant currency basis. By region, Asia led our performance, increasing 25%, followed by North America, up 13% and Europe, up 5%.”

2. Guidance

   The company expects growth in AUR to more than offset the pressure from higher freight and tariff costs.

   Source quote

   “We expect this continued AUR growth to more than offset modest pressure from higher freight and tariff costs.”

3. Guidance

   Marketing as a percentage of sales is expected to rise to approximately 8% in fiscal '27 because of compelling ROI behind the activities.

   Source quote

   “And with compelling ROI behind these activities, we still expect marketing as a percentage of sales to step up to approximately 8% in fiscal '27.”

4. Last period

   Gross margin outperformed the outlook due to value proposition and pricing power, which allowed for improvements in the quality of sales.

   Source quote

   “Gross margin also outperformed our outlook, supported by our compelling value proposition and pricing power. Which enabled further improvements in quality of sales.”

Script and answers carried a similar tone, so the script's message held up under questioning.

Sentences that drove the tone

“And we now expect Asia revenue to increase approximately high single to low double digits, up from our prior outlook of high single-digit growth, driven by our stronger-than-expected Q1 results...”

“And on the cadence point, so as Patrice mentioned, underlying business continues to show positive high-quality growth, and we continue to expect to deliver that high-quality low to mid-single-digit growth...”

“And we achieved this all while continuing to improve our quality of sales with increased full price selling and investing back into our key strategic priorities.”