Ralph Lauren Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Ralph Lauren First Quarter Tiscal Year 2026 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, instructions on how to ask a question will be given at that time. If you should require assistance during a call, please press star then zero. As a reminder, this conference is being recorded. I'd now like to turn over the conference to our host, Ms. Karina Vandergans. Please go ahead.

Good morning, and thank you for joining Ralph Lauren's First Quarter Fiscal 2026 Conference Call. With me today are Patrice Louvet, the company's president and chief executive officer, and Justin Pichichi, chief financial officer. After prepared remarks, we will open up the call for your questions, which we ask that you limit to one per caller. During today's call, our financial performance will be discussed on a constant currency-adjusted basis. Our reported results, including foreign currency, can be found in this morning's press release. We will also be making some forward-looking statements within the meaning of the federal securities laws, including our financial outlook. Forward-looking statements are not guarantees, and our actual results may differ materially from those expressed or implied in the forward-looking statements. Our expectations contain many risks and uncertainties. Principle risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings. To find disclosures and reconciliations of non-GAAP measures that we use when discussing our financial results, you should refer to this morning's earnings release and to our SEC filings that can be found on our investor relations website. With that, I will turn the call over to Patrice.

Thank you, Corey. Good morning, everyone, and thank you for joining today's call. We are encouraged by our strong start to the fiscal year with first-quarter results that exceeded our expectations across the top and bottom line. In the midst of a highly dynamic global operating environment, our growing brand desirability, diversified drivers of growth, and muscles of organizational agility and executional excellence are standouts as we continue to deliver on our long-term strategic priorities. This quarter's performance underscores the power of our iconic brand with a unique ability to reach across geographies, cultures, genders, and generations of consumers, the breadth and appeal of our lifestyle portfolio of products with timelessness, value, and quality more relevant than ever, and our proven key city ecosystem model as we continue to expand and elevate across every consumer touch point to be even more personal, more engaging, and more digitally connected. Our strong first-quarter results were once again broad-based, driven by every geography and channel. We delivered double-digit top-line growth in both Asia and Europe and high single-digit growth in North America, with global comps up 13%. This exceeded the expectations we laid out in May, even as we chose to reinvest back into our marketing, digital, and ecosystem initiatives, and return cash to our shareholders. This strong early performance gives us confidence to take up our full-year guidance, even as we remain cautious on the second half of the year due to potential tariff-related pressures on broader consumer behavior. Despite macro headwinds, we remain well-positioned, and we are on offense based on our continued commitment to invest behind our brands and market share gains, our strong and growing geographical presence, largely concentrated in our key cities in each region, and our relentless focus on improving technology, AI, and analytics to better serve our consumers and drive greater efficiencies in our business, all underscored by our balance sheet and operating discipline. Let me review a few highlights from the quarter, where we drove continued progress across our three long-term strategic pillars. As a reminder, these include, first, elevate and energize our lifestyle brand, second, drive the core and expand for more, and third, win in key cities with our consumer ecosystem. Starting with our efforts to elevate and energize our lifestyle brand, the Ralph Lauren brand remains one of our most powerful assets sitting at the epicenter of culture and inspiring people all over the world to step into their dreams. And this dream of a better life remains as relevant to consumers today as it was when Ralph started this company nearly 60 years ago. As we expand our business across geographies, categories, and channels, our teams are tapping into the power of our brand across a diversity of marketing platforms to reach our target consumers across generations. Some highlights from the first quarter included, first, we continue to reinforce our luxury lifestyle positioning through major activations focused on our top cities. In April, we hosted our first ever fashion presentation in China with our Shanghai Resee event, which translated our Spring 25 Hamptons fashion show to an all-Asian cast and star-studded event. This was coupled with an innovative live shopping event on Douyin and 360-degree takeover across our stores, outdoor, and digital media. In addition to delivering a new record high for our China Q1 sales, the campaign drove over 64 billion impressions with strong customer acquisition. This was followed by our Fall 25 Modern Romantics Women's Collection Fashion Show here in New York City, showcasing the easy elegance of relaxed tailoring with meticulous attention to detail and materials. And in June, we hosted our Spring 26 Men's Purple Label Show in Milan, marrying timeless craftsmanship and sophistication with the spirit of adventure. Beyond the runway, we delivered iconic celebrity moments from dressing Beyonce on her Cowboy Carter World Tour to Usher and Tyson Beckford, wearing custom purple label looks at the Met Gala. And most recently, we reinforced our leadership in the world of sports with another successful Wimbledon sponsorship, where we drove the highest media value across all brands present and 43 billion global PR impressions, a more than 40% increase to last year. These activities are driving strong, sustainable growth in new customer acquisition and engagement. In the first quarter, we added 1.4 million new customers to our DTC businesses, a mid single digit increase to last year, driven by digital and full price store customers, and continuing to skew more toward women, luxury, and next generation younger cohorts. And we increased our social media followers by high single digits to nearly 66 million, led by Instagram, Line, Douyin, and TikTok. Moving to our second key initiative, drive the core and expand for more. Ralph and our design teams continue to create beautiful products that serve our customers' modern lifestyles, all while staying true to what we stand for, authenticity, quality, and sophisticated timeless style. This is more important than ever as consumers look to brands and styles that they know and trust that will last and deliver a compelling value proposition. Our growing value perception, together with our strong pricing power, gives us confidence in our ability to continue on our elevation journey. This begins with our core products, which represent more than 70% of our business. Our core remains an important differentiator in an industry that is typically more reliant on fluctuating fashion trends. Core product sales grew mid-teens this quarter, driven by strength in seasonal sweater polos, cotton cable knit and merino sweaters, lightweight outerwear, including our beaten quilted jackets and our bi-swing and Bayport windbreakers, our newer linen offerings, and caps. Our special capsules this quarter are centered on our sporting lifestyle, including our candy shop Yankees baseball collection for opening day, and another elegant installment of Wimbledon pieces. Our high potential categories, including women's apparel, outerwear, and handbags, continue to be accelerators for our business. Together, these categories increase strong double digits, outpacing total company growth in the quarter. Women's apparel continued to be driven by our foundational core, along with a strong response to our seasonal styles. Highlights included are cable knit jersey and polo bear sweaters, linen shirts, dresses, our cotton canvas city jacket, and our newest foundational handbag collection, polo play, which launched earlier this spring. Within our complimentary lifestyle categories, we unveiled our latest home collection, Canyon Road at Salone del Mobile in Milan this spring. Inspired by the raw natural beauty of the American West, the collection reinforces our position in luxury living. Turning to our third key initiative, Win in Key Cities with our consumer ecosystem. We continue to expand and invest disproportionately in our key city ecosystems, delivering a cohesive, elevated brand experience across each of our consumer channels around the world. Within DTC, which comprises the majority of our business, we delivered another quarter of strong comp growth across regions. Comps increased 13%. This was above our expectations with double digit growth in both digital and brick and mortar stores. Globally, we opened 24 new owned and partner stores this quarter, including our first Ralph Lauren store in Vancouver, now our second location in Canada following our Toronto launch in 2023, a purple label and double RL shop in Shinsage's Sentin City department store, marking the debut of our luxury brands in the Korean market and our newest candy shop concept in the luxury resort destination of Marbella, reinforcing our presence in the Spanish market. All three regions outperformed our expectations again in the first quarter, led by international. Asia was particularly strong, accelerating the high teens growth driven by both China and Japan. China grew more than 30% in the quarter, outpacing our competitive set with a strong consumer response to our brand building initiatives, including our April fashion show in Shanghai. And North America maintained healthy trends of high single digits with strength across DTC channels and stabilization in wholesale as planned. And finally, touching on our enablers, our business continued to be supported by our five key enablers. Some highlights include, first, as part of our focus on delivering best in class digital technology and analytics and following our successful predictive buying pilot over the past year in Asia and Europe, we will continue to expand this AI driven program to additional core styles in fiscal 26, enabling better chase and in stock availability on sizing and best selling products to drive both sales and inventory efficiencies. Second, as part of our multi-year next generation transformation project, we were excited to launch automation in our European distribution center this quarter. We will roll out new automation capabilities to our other regions over the course of this fiscal year, enabling greater supply chain efficiency and savings and ultimately better demand fulfillment for our consumers as we get product to the right place at the right time. We were also proud to be recently named one of America's best employers for women by Forbes. And finally, this June, Ralph received the Fragrance Foundation's 2025 Hall of Fame Award, recognizing his enduring impact on the fragrance industry as well as his creative influence on modern culture. In addition, our Polo 67 Fragrance featuring Yankee's captain Aaron Judge won the 2025 Fragrance of the Year Award Men's Prestige. Congrats to Ralph and our fragrance team. In closing, Ralph and I are encouraged by the strong start to this fiscal year. Our teams are navigating an uncertain operating environment with dedication and agility to continue driving our strategic priorities. These priorities will continue to focus on harnessing the power of our iconic brand to drive desirability and recruit new consumers across generations, creating timeless products with a strong value proposition that consumers love and trust, and investing in brand experiences that inspire our consumers and immerse them in the world of Ralph Lauren. With all of this underpinned by our strong balance sheet, culture of operating discipline, and growing ability to utilize advanced AI and technology to drive sustainable long-term growth and value creation. We hope you'll tune into our Investor Day this September to hear more from our talented leadership team about the next leg of our next great chapter journey. And with that, I'll hand it over to Justin and I'll join him at the end to answer your questions.