Ralph Lauren Corporation

host, Ms. Karina Vandergans. Please go ahead.

Good morning, and thank you for joining Ralph Lauren's third quarter fiscal 2026 conference call. With me today are Patrice Louvet, the company's president and chief executive officer, and Justin Pachichi, 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. Principal 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 delivered strong third quarter results and progress on our next great chapter drive plan this holiday. In a season defined by warmth, joy, and a spirit of giving, Ralph Lauren's core values, the dream of a better life, time well spent with family, quality and authenticity, enabled us to connect deeply with consumers around the world. Across generations, cultures and markets, people are stepping into our lifestyle and iconic way of dressing. This powerful engagement with consumers is also translating to strong financial results. In our most important quarter of the year, we exceeded our commitments on both the top and bottom line. with broad-based performance across geographies, channels, and product categories. Full-price sell-throughs were meaningfully better than we expected this holiday as our brand experiences and products resonated around the world. This strong demand enabled us to continue driving our long-term elevation journey with improved quality of sales and gross margin expansion in each region. more than offsetting the impact of higher US tariffs as we began to flow through more product under the new rates. Our performance was also balanced across our retail and wholesale channels this holiday, reflecting our growing brand desirability and pricing power globally. This drove healthy high single-digit comp growth along with double-digit growth in wholesale. And underpinning this momentum are our enablers that continue to support our performance, our talented and passionate teams working tirelessly to execute on Ralph's vision, our commitment to operational agility and a powerful balance sheet as we continue to navigate an uncertain global environment, and our focus on harnessing advanced technology, AI, and analytics to better serve our consumers and drive greater efficiencies in our business. In short, the three-year Next Great Chapter Drive strategic plan we presented in September is off to a strong start, and our multiple drivers of growth across regions, channels, consumer cohorts, and the breadth of our lifestyle product offering are delivering. Let me take you through a few highlights from the quarter across the three strategic pillars of the plan. 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. For nearly 60 years, Ralph has inspired people to step into their own dream of a better life. From the cozy elegance of a Ralph Lauren Christmas to the optimism and adrenaline of the Olympics, we sit at the heart of culture. And over the holiday season, our teams continue to reinforce our place in culture, bringing our unique form of cinematic storytelling to life across markets and platforms, transporting both new and existing consumers into our world. Key highlights from the third quarter included First, our Holiday 25 Mountain Living and Timeless Gifting campaigns, translating the magic and easy elegance of Ralph Lauren around the world. We brought this to life this season through our immersive pop-up experiences in London, Los Angeles, Tokyo, Munich, and Seoul, creating winter wonderlands as only Ralph can, featuring Ralph's coffee, special guest performances, family photos, hand-painted denim jackets and candles, and even our own Christmas tree farm. Along with a range of other activations, including our AI-powered store windows featuring our Polo Bear and digital campaigns, our holiday campaigns drove a combined 2.9 billion global impressions. Next, we continue to reinforce our position as one of the leading luxury apparel brands in the world of sports. During the quarter, we unveiled our Team USA uniforms for the Milan Cortina Winter Olympics with special celebrations in New York City and in Milan with Vogue and GQ Italia. We're excited to feature inspiring stories that highlight the athletes' dedication and perseverance to reach one of the greatest events on the world stage. I encourage you to check out all the looks starting with tomorrow's opening ceremony. In the world of car racing, Lando Norris, our Polo Red Fragrance Ambassador, won the 2025 Formula One World Drivers' Championship. And we renewed our longstanding partnership as an official sponsor of US Open Tennis Championships, one of the most electric events of the year in tennis. In Asia, we continued to build our elevated brand awareness and affinity through our very rough documentary events in Hong Kong and Singapore. featuring celebrities and friends of the brand. Our Polo Originals campaign in Tokyo showcased Ralph Lauren's leadership in everyday luxury styling, uniquely blending Japanese refinement with American heritage dressing. And finally, we outfitted an exciting group of actors and artists, including Jennifer Aniston, Rose Byrne, Emily Blunt, Chase Infinity, Jessie Buckley, and more for the Elle Women in Hollywood celebration. Together, these global activations are driving strong, sustainable growth in new customer acquisition and retention. In the third quarter, we added 2.1 million new consumers to our DTC businesses, on top of last year's 1.9 million record results. driven by digital and full-price store customers. We were encouraged by the strong momentum across generations led by younger next-generation consumers, women, and VICs. And we increased our social media followers by high single digits to more than 68 million, led by Instagram, TikTok, Douyin, and LINE. This rolling funder approach to activations enabled by our strong data and analytics capabilities, gives us confidence to continue our brand momentum as we look ahead. Moving to our second key initiative, drive the core and expand for more. Ralph and our creative teams continue to deliver on his vision through timeless, high quality products and distinctive styling that tell a story of a life well lived. Independent of any single fashion trend or cycle, This philosophy is embedded in how we drive our core products as much as it is in our high potential and complementary lifestyle categories. Starting with our core, which represents more than 70% of our business. Core product sales grew low double digits this quarter, driven by strength in our cotton cable knits, jersey, wool cashmere and flag sweaters, all perfect for gifting. Oxford and linen shirts, rugby and quarter-zit knit tops, and our iconic polo caps. Our holiday campaigns also drove healthy full-price demand in our core children's programs, led by our elevated sweaters and mid-weight down jackets and knit and fleece sets. Our high-potential categories, including women's apparel, outerwear, and handbags, continue to be accelerators for our business. Together, these categories increased high-teens outpacing total company growth in the quarter. In women's, sweaters were a standout, ranging from our hero cable knit in cotton, wool, and cashmere to our beloved polo bears and newer half-zip and polo cables. Our outerwear offering showcased our expanded range of classifications from the sporty functionality of our polo puffers in candy shop colors to more sophisticated options like our tailored wool coats and cable knit bomber jackets. Momentum in our handbag business continued to be driven by our foundational collections, Polo ID and Polo Play, in core leather, seasonal suede, and western details, along with our women's collection, Ralph and Ricky Bags. Special releases this quarter included Polo Ralph Lauren and Topa, the fourth collaboration in our groundbreaking Artist in Residence program, focused on empowering and celebrating artisans within the communities that have historically inspired our designs. Our Team USA collection ahead of this month's Milan Cortina Olympic Games, honoring the city's creative spirit while staying true to the enduring style that defines Ralph Lauren. And our annual Pink Pony collection, supporting Ralph Lauren's longstanding commitment to cancer care and research. we will continue to leverage the unparalleled breadth of our lifestyle product offering to connect with consumers. Turning to our third key initiative, winning key cities with our consumer ecosystem. We continue to expand our consumer ecosystems to deepen our presence in our top 30 cities around the world. We are also laying the groundwork for long-term sustainable growth in our next 20 cities, Across each of these ecosystems, we're establishing a cohesive, consistently elevated experience to allow consumers to engage with and step into the Ralph Lauren lifestyle. Within DTC, which comprises the majority of our business, we delivered another quarter of healthy comp growth across regions. Global comps increased high single digits on top of more than 12% growth last year, led by our Ralph Lauren stores and digital commerce. We were also excited to launch our Ralph Lauren TikTok shop in the US this quarter, becoming the first luxury fashion brand with an always-on presence on the platform. The shop features a curated assortment, including core polo bestsellers and seasonal refreshes, tailored to this platform's next-gen audience, including younger male shoppers. By region, Asia once again led our growth with sales up more than 20%, driven by all key markets. China grew more than 30% this quarter, ahead of our outlook, as we continue to strengthen and grow our elevated brand across the market. Our China performance was supported by our Holiday and Very Ralph campaigns, continued expansion on Douyin, and another outstanding Singles Day with high-quality, double-digit revenue growth and strong new customer acquisition around the event. Europe and North America also delivered high-quality growth this quarter, on top of last year's strong compares. As we continue to reinforce our presence in our top cities, we opened 32 new owned and partner stores globally, New store highlights this quarter included Chengdu IFC Mall in China, Stratford and Bishopsgate in London, New Delhi, Abu Dhabi, and Chats with Chase in Sydney. And finally, touching on our enablers. Our business continues to be supported by our five key enablers. Recent highlights include, first, as part of our focus on delivering advanced technology AI and analytics, Ask Ralph, the AI-powered digital shopping assistant we launched in September, is providing us with powerful insights as AI drives accelerated shifts in consumer behavior. Customers are moving beyond traditional search toward rich, natural language product conversations with styling and outfit discovery accounting for more than 50% of our total engagement. In addition to driving more personalized experiences for our customers, AskRalph is also becoming an important resource for high quality first party data. Second, our teams and our culture drive our performance. We were proud to be named one of America's best companies by Forbes. And finally, It was an honor for all of us when Ralph was named the CFDA's 2025 American Women's Wear Designer of the Year. It is the second time Ralph has received this award, and he is the only designer to win all of the CFDA's top honors. This is a testament to our exciting women's momentum and to our brand's enduring relevance. Congrats to Ralph and our creative team. In closing, Ralph and I are proud of our team's progress and execution through the first three quarters of this fiscal year, including through the important holiday season. Even as we continue to navigate an uncertain global macro and geopolitical environment, we remain focused on what we can control and what's ahead for Ralph Lauren. Creating value through our powerful brand that is as relevant today with Gen Z as it is with our silver spenders, a relentless focus on driving our core while also accelerating our high potential category opportunities, meaningful geographic white space, which we are developing with a thoughtful approach to our top cities, and a proven ability to execute with creativity, agility, and operating discipline. And before I hand it over to Justin, we'd like to extend a warm welcome to our newest board member, Cesar Convey. Cesar brings rich experience from the world of modern media, particularly with international expansion and broadening brand reach to more diverse global audiences. We're excited to have him join us. With that, I'll hand it over to Justin, and I'll join him at the end to answer your questions.