Ralph Lauren (RL) Q3 2026 earnings summary

Executive summary

• Net revenues for the quarter rose 12.2% year-over-year to $2.406 billion, with growth across all segments and favorable foreign currency effects of $47.9 million.

• Delivered strong Q3 results, exceeding top and bottom line commitments with broad-based performance across geographies, channels, and product categories.

• Added 2.1 million new DTC consumers, with momentum led by younger, next-generation consumers, women, and VICs.

• Launched innovative marketing campaigns and AI-powered digital experiences, reinforcing brand engagement globally.

• Net income increased 21.6% to $361.6 million, and diluted EPS rose 24.9% to $5.82, driven by higher operating income and lower share count.

Financial highlights

• Q3 revenue grew 12.2% year-over-year to $2.406 billion, led by Asia (+22.4%), North America (+8.1%), and Europe (+11.9%).

• Adjusted gross margin expanded 150 bps to 69.9%, driven by AUR growth, favorable mix, and lower cotton costs.

• Adjusted operating margin expanded 200 bps to 20.7%; operating profit increased 21%.

• Free cash flow reached $1.1 billion for the nine months; $500 million returned to shareholders.

• Net inventory up 10% in line with revenue growth; ended with $2.3 billion in cash and $1.2 billion in debt.

Outlook and guidance

• Raised FY2026 constant currency revenue growth outlook to high single to low double digits (from 5%-7%).

• Full-year operating margin expected to expand 100-160 bps; gross margin to expand 40-80 bps.

• Q4 revenue growth guided to mid-single digits; Q4 operating margin expected to contract 80-120 bps due to tariffs and timing shifts.

• Asia full-year growth outlook raised to mid-teens; Europe to grow at high end of mid-single digits.

• CapEx to remain at 4%-5% of sales, focused on digital, AI, infrastructure, and store investments.