RL · Q2 2026 Earnings

Bullish

Ralph Lauren Corporation

Reported November 6, 2025

30-second summary

Ralph Lauren beat its own Q2 guide by a wider margin than Q1: revenue +17% YoY to $2.01B against a high-single-digit cc guide, adjusted operating margin 14.1%, and every region accelerated — Europe +22%, Asia +17%, North America +13% with NA comps holding at +13%. Management raised FY26 cc revenue growth to 5–7% (from low-to-mid single digits) and lifted operating margin expansion to +60–80bps cc (from +40–60bps), but Q3 is still guided only mid-single digits cc — the H2 caution language is unchanged in posture even as H1 has now beaten guidance twice running. The setup remains: two quarters of sandbagged guides blown out, with management refusing to extrapolate into the back half because tariffs and Q4 timing pressure haven't yet arrived.

Headline numbers

EPS

Q2 FY2026

$3.79

Revenue

Q2 FY2026

$2.01B

+17.0% YoY

Gross margin

Q2 FY2026

68.0%

Operating margin

Q2 FY2026

14.1%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$2.01B	+17.0%	$1.72B	+16.9%
EPS	$3.79	—	$3.77	+0.5%
Gross margin	68.0%	—	72.3%	-430bps
Operating margin	14.1%	—	15.9%	-180bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue growth (constant currency)	Q2 FY2026	high-single digits	17%	+7-8 pts above high-single digit range (9%)	Beat
Revenue growth (FX benefit)	Q2 FY2026	100 to 150 basis points	actual reported as component of total growth	in-line	Met
Operating margin expansion (constant currency)	Q2 FY2026	120 to 160 basis points	14.1%	Expansion magnitude not separately quantified in actuals; operating margin level of 14.1% supports beat on expansion	Beat

New guidance

Metric	Period	Guide	YoY
Revenue growth (constant currency)	Q3 FY2026	mid-single digits	—
Revenue growth (FX benefit)	Q3 FY2026	150 to 200 basis points	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Tax rate	Q2 FY2026	15% to 17%	Withdrawn — no replacement	—	Withdrawn
Revenue growth (constant currency)	FY 2026	low- to mid-single digits	5% to 7%	+1 to 2 pts (prior low-to-mid ~3-5%, current 5-7%)	Raised
Revenue growth (FX benefit)	FY 2026	150 to 200 basis points	200 to 250 basis points	+50 bps (prior midpoint 175 bps → current midpoint 225 bps)	Raised
Operating margin expansion (constant currency)	FY 2026	40 to 60 basis points	60 to 80 basis points	+20 bps (prior midpoint 50 bps → current midpoint 70 bps)	Raised
Operating margin FX benefit	FY 2026	40 basis points	30 to 50 basis points	Range widened to include 40 bps (prior point estimate 40 bps → current range 30-50 bps midpoint 40 bps)	Raised
Tax rate	FY 2026	19% to 20%	19% to 21%	+1 pt (range widened from 1 pt width to 2 pt width; upper end +100 bps)	Raised

Reaffirmed unchanged this quarter: Capital expenditures (4% to 5% of revenue)

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
Global Direct-to-Consumer Comparable Store Sales Growth	13%
New Consumer Acquisitions (DTC)	1.5 million
Social Media Followers	67 million
Average Unit Retail (AUR) Growth	12%
North America Comparable Store Sales	13%
Europe Comparable Store Sales	10%
Asia Comparable Store Sales	16%
Store Openings (Q2)	38 new owned and partnered stores

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	YoY
North America	$0.832B	+13.0%
Europe	$0.688B	+22.0%
Asia	$0.446B	+17.0%

Management tone

Q4 FY25 defensive H2 framing → Q1 FY26 confident on offense, caution preserved → Q2 FY26 two-quarter streak, but Q4 specifically called out as the pressure point.

The "stay on offense while remaining prudent and agile" posture from Q1 has now hardened around a specific quarter: Q4. In UBS Q&A, Jay Sol explicitly pressed on H2 deceleration drivers, and management identified Q4 as the most negatively impacted quarter — reciprocal tariffs ramp, off-price culling adds 2–3 points of NA wholesale pressure, and timing shifts reverse. This is more specific than Q1's "H2 a bit lower due to tariffs and cost inflation." Management has moved from generic H2 caution to a quantified Q4 setup, which is harder to sandbag because the mechanism is now disclosed.

The pricing posture has matured. In Q4 FY25, pricing was described as incomplete with more rounds to be assessed. In Q1 FY26, fall pricing was confirmed as taken. In Q2, UBS Q&A surfaced a more refined toolkit: country-of-origin shifts, merchandising mix, and targeted pricing as tariff mitigants — i.e., pricing is now one lever among several, not the primary one. This signals management believes brand elasticity is real but limited, and they're spreading the tariff hit across multiple levers rather than concentrating it on AUR.

The margin ceiling discussion is new. Evercore's Michael Benetti directly asked whether 16% op margin is a cap; management answered explicitly that it is not, with marketing and SG&A leverage cited as the primary expansion levers. This is the first quarter management has publicly declined to anchor to a near-term margin ceiling — a posture shift from Q4 FY25's "modest expansion driven by opex leverage" framing.

Q&A highlights

Matt Boff · JPMorgan

What macro assumptions are embedded in the updated outlook for the back half? Have you seen any change in consumer behavior? How does global brand awareness relative to only 2% market share support long-term revenue targets?

No meaningful changes in consumer behavior to date; core consumer remains resilient. Brand awareness is highest in North America and Europe, with significant opportunities in Germany, Korea, and especially China (where slightly more than half the population is aware of Ralph Lauren). Market share expansion will be driven by awareness building, conversion, and basket size across a $400 billion TAM.

Less than 2% market share in $400 billion TAMSlightly more than 50% brand awareness in ChinaStrong momentum in new customer acquisition (1.5 million new consumers in Q2 DTC)Broad-based momentum across regions and consumer segments

Jay Sol · UBS

How is the company thinking about using pricing as a lever before tariffs ramp up? What is the ability to mitigate tariffs over time? How much of the H2 guidance acceleration is due to general caution on consumer slowdown versus structural or timing shifts?

AUR growth driven by multiple durable levers: brand investment, full-price customer mix, product elevation, geographic/channel mix, reduced discounting, and strategic pricing. Normal course pricing taken in fall with modest additional adjustments for tariffs. Q4 expected to be most impacted quarter due to reciprocal tariffs and timing shifts. Underlying trajectory remains mid-single-digit growth when adjusting for timing shifts and strong comps.

High single-digit AUR growth expected for H2 FY2610-30 bps gross margin expansion expected for full year despite tariffsQ4 expected to be most negatively impacted quarterMitigation levers: country of origin shifts, merchandising mix, targeted pricing

Brooke Roach · Goldman Sachs

What strategic actions are being taken to engage North America value-oriented consumers this holiday season? What is the plan if the consumer weakens further?

Company has pricing architecture flexibility to selectively convert value-oriented customers without walking back brand guardrails. Focus on value perception, segmentation precision, and marketing analytics. Brand activations are designed to appeal broadly including to value-sensitive consumers. Product strategy of core icons plus high-potential categories resonates across consumer segments.

Flexibility in price architecture for targeted value-segment activationDisproportionate emphasis on consumer segmentation in North AmericaCore icons and high-potential categories strategy resonating across all consumer segmentsProven ability to navigate prior cost inflation and consumer pressure cycles

Michael Benetti · Evercore

With global AUR growth rate close to DTC comp growth rate implying flattish units, where is the unit growth opportunity? Is there a path to reach the 15-15.5% EBIT margin range by FY28 within FY26, and how should we frame the long-term margin opportunity?

Unit growth is occurring in full-price businesses, digital, China, and accelerator categories (women's, handbags, outerwear). Company will lean into AUR versus units in H2 to navigate cost inflation. On margins, no cap at 16%; management will balance exceeding near-term commitments with reinvestment in brand, marketing, and SG&A leverage as key levers.

Unit growth concentrating in full-price, digital, China, and accelerator categoriesFocus on AUR growth over unit growth in H2 due to macro pressures16% operating margin is not a ceilingMarketing and SG&A leverage are primary levers for margin expansion

Ike Berger · Wells Fargo

North America wholesale has inflected positive for three quarters but grew low double digits with an 11-point timing shift. How should we think about the trajectory? Will the timing shift hurt Q3?

Underlying quality growth in North America wholesale is healthy. Company targeting stable-to-up normalized organic growth by balancing growth in top-tier doors, digital, and key cities with intentional off-price culling. Q4 will have planned 2-3 point off-price reduction pressure, plus caution on U.S. consumer elasticity and continued brand elevation reinvestments partly offsetting gross bookings.

11-point wholesale timing shift in Q2 Europe (approximately 11 points of 18% wholesale growth)Planned 2-3 point off-price reduction in North America Q4Target: stable-to-up normalized organic growth trajectoryWomen's performing particularly well in North America wholesale

Answers to last quarter's watch list

Whether Q2 revenue actuals exceed the HSD cc guide by a similar magnitude to Q1. Q2 grew +17% reported against an HSD cc guide — a wider beat than Q1's +13.7% reported vs HSD. The FY raise to 5–7% cc is the direct read-through; management is again banking the upside rather than extrapolating.

Resolved positively

NA retail comps in Q2 against the +12% Q1 baseline. NA comps printed +13% in Q2, slightly above Q1. NA revenue accelerated to +13% from Q1's +7.9%, partially aided by wholesale timing. The FY raise materialized as expected.

Resolved positively

Gross margin in Q2 — expand YoY or contract. Gross margin came in at 68.0% in Q2; the company didn't break out YoY GM expansion in the press release headline. UBS Q&A surfaced an FY26 expectation of +10–30bps gross margin expansion despite tariffs, implying H1 carried more of the expansion and H2 is flat-to-slightly-down on GM.

Continue monitoring

Magnitude and reception of "selective pricing actions." AUR grew +12% in Q2 (vs Q1's +14%), with DTC comps holding at +13%. No comp deceleration accompanied the pricing — elasticity is holding for now. Management guided H2 AUR to high-single digits, layering further tariff-related price moves.

Resolved positively

Whether Greater China sustains 20%+ growth and crosses 10% of company revenue. Asia grew +17% with Asia comps +16%; specific China growth and revenue share weren't disclosed in the press release. JPMorgan Q&A noted China brand awareness "slightly more than 50%" as growth runway but didn't quantify current-quarter China growth.

Continue monitoring

Any quantification of tariff dollar impact in Q2 or H2. Management still has not provided a dollar figure for tariff impact. Q4 was identified in UBS Q&A as the most impacted quarter, but the size remains qualitative.

Not resolved

What to watch into next quarter

Whether Q3 revenue beats the mid-single-digit cc guide by a magnitude similar to Q1 or Q2. A third consecutive blowout against a sandbagged guide would force the question of whether the H2 caution framework is credible at all. An in-line Q3 confirms the timing-shift narrative.

NA comps in Q3 — specifically whether they hold above +8% as off-price culling pressure builds. Q4 carries a planned 2–3 point off-price reduction; if Q3 NA comps decelerate ahead of that, the Q4 setup gets harder.

Gross margin in Q3 against the implied flat-to-slightly-up H2 framework. Tariff ramp is the binding mechanism; a GM contraction in Q3 means Q4 has to carry even more of the year's pressure than guided.

Disclosure of China growth and revenue share. Two quarters without explicit China revenue disclosure (vs Q1 FY26 prepared remarks confirming +30%) is a transparency regression on the single most important geography for the long-term thesis.

Any tariff dollar quantification on the Q3 call. Q4 is now publicly identified as the impacted quarter; sizing the impact in dollars would let the Street model H2 with precision rather than range.

Whether the FY26 guide gets raised a fourth consecutive time. The cadence — Q4 FY25 LSD → Q1 LSD/MSD → Q2 5–7% — implies a Q3 raise to 6–8% cc is consistent with management's banking behavior if Q3 beats HSD. The shape of the raise (revenue vs op margin) will reveal whether the AUR-and-mix story is widening into structural operating leverage.

Sources

Ralph Lauren Q2 FY2026 press release, SEC filing, November 6, 2025 — https://www.sec.gov/Archives/edgar/data/1037038/000162828025049886/rl-20250927ex991xpressrele.htm
Q2 FY2026 earnings call Q&A — analyst exchanges with Boss (JPMorgan), Sol (UBS), Roach (Goldman Sachs), Benetti (Evercore), and Berger (Wells Fargo)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.