RL · Q4 2026 Earnings

Neutral

Ralph Lauren Corporation

Reported May 21, 2026

30-second summary

SENTIMENT: Constructive Ralph Lauren capped FY26 with another beat — Q4 revenue +12% cc (+17% reported) vs MSD cc guide (~7pts above MSD), adjusted operating margin 9.7% cc (-60bps YoY cc) vs guide of -80 to -120bps cc contraction (a ~20–60bps beat vs guide, not full reversal to expansion), global DTC comps +17%, AUR up mid-teens. But the FY27 initial guide of mid-single-digit cc revenue growth "centered around 4–5%" on a 52-week comparable basis, with operating margin expansion of just 40–60bps cc, is the print that matters: after a year of four consecutive raises and 12% FY26 cc growth, management is resetting the bar to roughly one-third the FY26 pace. The Q1 FY27 guide of MHSD growth (+5–9% cc, implying $1.81–1.88B against the $1.72B Q1 FY26 base) front-loads the year exactly as management did 12 months ago — same sandbag template, lower headline number.

Headline numbers

EPS

Q4 FY2026

$2.80

Revenue

Q4 FY2026

$2.00B

+17.0% YoY

Gross margin

Q4 FY2026

69.7%

Operating margin

Q4 FY2026

9.5%

Key financials

Q4 FY2026

Metric	Q4 FY2026	Q4 FY2025	YoY	Q3 FY2026	QoQ
Revenue	$2.00B	$1.70B	+17.9%	$2.41B	-16.9%
EPS	$2.80	$2.27	+23.3%	$6.22	-55.0%
Gross margin	69.7%	68.6%	+110bps	69.9%	-20bps
Operating margin	9.5%	9.1%	+40bps	20.9%	-1140bps

Guidance

Company delivered a significant beat on Q4 FY2026 revenue and operating margin, reversing prior guidance for margin contraction with actual expansion; FY2027 guidance reflects material deceleration from FY2026 momentum, with 4-5% constant currency revenue growth on 52-week basis and modest 40-60 bps margin expansion, benefiting from 53-week fiscal year calendar.

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 (YoY, constant currency)	Q4 FY2026	mid-single digits	17%	+10-12pts above mid-single digits guide	Beat
Operating margin change (constant currency)	Q4 FY2026	contract 80-120 basis points	9.5%	Expanded instead of contracted; material beat vs. contraction guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue growth (YoY, constant currency, 52-week comparable basis)	FY 2027	mid-single digits, centered around 4% to 5%	—
Operating margin expansion (constant currency)	FY 2027	40 to 60 basis points	—
Tax rate	FY 2027	21% to 22%	—
Capital expenditures	FY 2027	approximately 4% to 5% of revenue	—
Revenue growth (YoY, constant currency)	Q1 FY2027	mid- to high-single digits	+10-23% YoY
Operating margin expansion (constant currency)	Q1 FY2027	80 to 120 basis points	—
Tax rate	Q1 FY2027	approximately 22% to 23%	—
Fiscal year structure	FY 2027	53-week year; 53rd week expected to contribute additional 1 point to revenue growth and benefit operating margin slightly	—

Platform metrics

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Global Direct-to-Consumer Comparable Store Sales	17% growth (Q4)	+13%	—
Average Unit Retail (AUR) Growth	Mid-teens	High single-digit	—
New Customers Acquired (DTC channels)	6.5 million	—	—
Social Media Followers	~70 million	—	—
Digital Commerce Comp Sales - North America	21% growth (Q4)	—	—
Retail Comp Sales - Europe	5% growth (Q4)	—	—

Profitability

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Adjusted Operating Margin (Non-GAAP)	11.0%	—	—

Other KPIs

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
North America	$0.763B	$0.705B	+8.2%
Europe	$0.62B	$0.526B	+17.9%
Asia	$0.564B	$0.432B	+30.6%
Returned Capital to Shareholders	>$700 million	—	—

Management tone

Q1 FY26 confident on offense → Q2 FY26 Q4 identified as the pressure point → Q3 FY26 first explicit Q4 op margin contraction guide → Q4 FY26 contraction came in shallower than guided, FY27 framed as deliberate normalization.

Two shifts stand out across the FY26 arc.

First, the framing of the FY27 guide as "consistent with our Next Great Chapter: Drive commitments" is a posture change. Throughout FY26, every quarterly raise was characterized as a function of in-quarter outperformance, with H2 caution preserved verbatim. The FY27 introduction explicitly grounds the guide in the multi-year plan — "we remain focused on driving our multiple engines of growth while continuing to lay the groundwork for sustainable growth and value creation into the future." This is the first time in four quarters management has anchored forward guidance to a long-term plan rather than to in-quarter trajectory. The implication: management wants the Street to model FY27 as a plan year, not as an extrapolation of FY26.

Second, the marketing discussion in Q&A (Jay Sol exchange) hardened from "above revenue growth rate" framing in prior quarters to an explicit "no ceiling on marketing spend as percentage of revenue — returns on investment drive decisions" statement, with FY27 marketing guided to ~8% of sales (up from FY26's 7.9% and roughly double historical 3.5%). This is the most assertive statement of the elevation playbook to date and explains why FY27 op margin expansion is guided to only 40–60bps despite gross margin tailwinds — the company is reinvesting most of the available margin into the demand-generation flywheel rather than letting it flow to the bottom line.

The hedge that remains is Europe. The Q4 cc deceleration to +6.2% (from +11.9% cc in Q3) was attributed to "more prudent view of broader operating environment" with Middle East and tourism cited but called immaterial. The FY27 Europe guide of LSD-to-MSD growth with "strongest growth expected in Q1" mirrors the FY26 Europe shape — Q1 strength, H2 caution. Investors should treat this as the same template that produced Europe outperformance against caution earlier in FY26; or, alternatively, as a real signal that European demand normalization is genuine. The next two quarters will distinguish.

Q&A highlights

Matt Boss · J.P. Morgan

What were the largest drivers of outperformance in year one of the plan and are they sustainable? By region, are guidance expectations in line with targets? Are there consumer or brand momentum concerns in Europe? What is confidence in mid-single-digit same-store sales given 13% global comps in FY26 on top of 10% prior year?

Patrice emphasized diversified growth model with no single driver: brand momentum across generations, breadth of product portfolio, and innovative lifestyle experiences. Core consumer remains resilient across all regions. Company outlook aligns with three-year targets. Justin noted FY27 expects mid-single-digit revenue growth on-plan with DTC full-price-led growth continuing, strong comparables in H2 anticipated but no reversal of growth trajectory expected.

FY26 global comps grew 13% (implied from context)FY27 guidance: mid-single-digit revenue growthFY27 DTC full-price-led growth expected to continueCore consumer resilient across all three regions

Jay Sol · UPS

How is management thinking about investment priorities to balance growth investments with margin durability? How should we think about marketing as a percent of sales in FY27?

Justin outlined three consistent investment priorities: reinforcing iconic brand with authentic connections, reinvesting in product elevation and innovation, and building key city ecosystems with digital/AI capabilities. Marketing investments will continue to grow above revenue growth rate to approximately 8% of sales in FY27, with no ceiling on marketing spend as percentage of revenue—returns on investment drive decisions. Both gross and operating margin expansion expected in FY27 despite increased marketing.

FY26 marketing spend: 7.9% of sales (vs. 7.5%-8% outlook)FY27 marketing guidance: ~8% of salesMarketing spend has grown from 3.5% historically to near 8%FY27 gross and operating margin expansion expected

Laurent Gilson · BNP Paribas

Can you unpack the Europe guidance expecting low to mid-single-digit growth with strongest growth in Q1? Can you quantify the expected headwind from inbound tourism and Middle East disruption?

Justin explained Europe FY27 outlook reflects more prudent view of broader operating environment, with strongest growth expected in Q1. Core consumer remains resilient across EMEA, shifting to full-price and less price-sensitive, but macro pressures including higher energy costs and Middle East conflict create headwinds. Middle East business represents low single-digit percentage of Europe revenue; tourism impact similarly immaterial to overall company.

Europe FY27 guidance: low to mid-single-digit growthStrongest Europe growth expected in Q1 FY27Middle East: low single-digit percentage of Europe revenueTourism headwinds: immaterial to overall company

Michael Bonetti · Evercore

How will accelerator categories (women's apparel, outerwear, handbags) contribute to mid-single-digit growth guidance? How does category contribution affect AUR? For Justin: given Q4 AUR +16% and DTC comps +17%, implying very low unit growth, how do you expect unit growth to work in FY27 despite new customer additions, store growth, and new categories?

Patrice noted accelerator categories grew 20%+ in FY26 and expected to continue outpacing mid-single-digit company growth; women's apparel has only 1% market share despite ~$2B business; all three categories are AUR-accretive with significant runway. Handbag launch of Polo Blaze coming. Justin clarified FY27 guidance reflects three diversified revenue drivers (high-value consumer acquisition, durable AUR growth, targeted unit growth); unit growth inflected positive in FY26 in full-price/high-potential categories, digital, and China; expects units to continue slight growth in FY27 with some elasticity in EMEA; AUR expected to lead growth and outpace units.

Accelerator categories grew 20%+ in FY26 and expected to outpace mid-single-digit guidanceWomen's apparel: only 1% market share, ~$2B businessNew handbag pillar (Polo Blaze) launching fall FY27FY26 unit growth inflected positive in full-price, high-potential categories, digital, and China

Blake Anderson · Jefferies

AUR continues to be strong at double digits despite macro dynamics, with guidance shifting to mid-single digits. What is the outlet opportunity specifically, especially in U.S. and Europe, from promo optimization and product mix elevation?

Justin explained outlets had most runway when elevation journey started and still has most opportunity; multiple AUR levers available including discount rate (frequency, depth, duration, breadth, product inclusion), customer segmentation, and AI-driven targeting. Patrice noted outlets are elevating product mix—more sweaters, outerwear, dedicated handbag space, enhanced shirt presentation, fewer traditional T-shirt rounders; consumers responding positively, surprisingly accepting elevated price points particularly on women's leather outerwear; mix elevation journey expected to drive productivity for years.

Outlets had most AUR runway at start of elevation journey; still has most opportunityMultiple AUR levers: discount rate mechanics, frequency, depth, duration, breadth, product inclusionFY27 AUR guidance: mid-single-digit growth across all channelsOutlet product mix elevating: more sweaters, outerwear, handbags; less T-shirt focus

Answers to last quarter's watch list

Whether Q4 revenue holds the MSD cc guide given the magnitude of FY raise required to make the math work. Q4 revenue grew +12% cc (+17% reported) to $2.0B — a clean beat against the MSD cc guide and a fourth consecutive beat. The pattern is now durable: management raises to bank the in-quarter beat, but refuses to extrapolate.

Resolved positively

Q4 operating margin contraction against the -80 to -120bps cc guide. Adjusted operating margin in cc was 9.7% (-60bps YoY cc), a beat of ~20–60bps vs guide but still contraction — not the full reversal to expansion that the reported 11.0% (FX-aided) figure suggests. Reading: tariff mitigation came in modestly better than guided, with the prior guide a moderate sandbag. Status: Resolved positively, with the magnitude smaller than headline-reported figures imply.

First explicit FY27 framework on the Q4 call. Provided. FY27 cc revenue growth 4–5% on a 52-week comparable basis (~5–6% reported with the 53rd week), op margin expansion 40–60bps cc, capex 4–5% of revenue, tax rate 21–22%. Tariffs were NOT quantified in dollars on the call; the qualitative statement cited a "10% prevailing tariff rate" as a favorable assumption baked into H1 margin expansion. FY27 should be modeled as a normalization/transition year rather than a setback, but the absence of tariff dollar quantification leaves a material modeling gap. Status: Resolved positively on framework, not resolved on tariff sizing.

NA wholesale exposure detail as Saks situation evolves. No specific dollar disclosure of Saks or broader wholesale exposure was provided in the press release. NA grew +8% in Q4 with DTC channels driving the print; wholesale exposure detail was not called out on the print.

Continue monitoring

Disclosure of China growth specifically. Asia grew +27.6% cc in Q4, the strongest segment print of the quarter, and management disclosed on the call that China sales grew more than 50% in Q4 supported by Lunar New Year, with FY27 China guided to ~mid-teens growth against a 40% prior-year compare. Status: Resolved.

AUR sustainability with promo pullback complete. Q4 AUR grew mid-teens (+16% on the call), decelerating from Q3's +18% but still well above the Q3 guide. FY27 AUR is guided to mid-single digits with Q1 high-single-digits — a significant deceleration reflecting the moderation of the promo lever now that pullback is largely complete, with AUR still expected to lead and outpace unit growth. The elasticity test is largely passed: pricing power held without comp deceleration, but the structural pace is normalizing. Status: Resolved positively on elasticity, with the FY27 deceleration the explicit signal that promo-pullback is now largely banked.

What to watch into next quarter

Whether Q1 FY27 revenue exceeds the MHSD cc guide ($1.81–1.88B implied) by a magnitude similar to Q1 FY26's blowout of HSD. A fifth consecutive sandbag confirms the brand-elevation flywheel is still compounding; an in-line print signals genuine normalization has arrived.

NA comps in Q1 FY27 against the +12% Q1 FY26 baseline. The FY27 NA outlook implicitly assumes continued resilience; a sharp deceleration below MSD would shift the FY27 risk profile.

Whether tariffs get quantified in dollars on the Q1 FY27 call. The qualitative reference to "10% prevailing tariff rate" as a favorable H1 assumption is the closest management has come; a dollar figure would close the largest remaining modeling gap.

Europe Q1 print against management's "strongest growth in Q1" framing. The FY27 Europe LSD-to-MSD guide mirrors the FY26 Europe template that ultimately delivered well above guide; Q1 is the first read on whether this is genuine European deceleration or another sandbag.

China growth disclosure continuity. Management broke its silence this quarter with the 50%+ Q4 China figure and ~mid-teens FY27 guide; whether the next call sustains that level of specificity will signal whether the disclosure shift is durable.

Marketing spend trajectory toward the ~8% of sales FY27 guide and any signal of where the ceiling actually sits. Management explicitly said there is no percentage ceiling; the rate of marketing increase against revenue growth in Q1 is the read on whether the reinvestment posture is durable.

Sources

Ralph Lauren Q4 and FY2026 press release, SEC filing, May 21, 2026 — https://www.sec.gov/Archives/edgar/data/1037038/000162828026037053/rl-20260328xex991xpressrel.htm
Q4 FY2026 earnings call Q&A — analyst exchanges with Boss (J.P. Morgan), Sol (UBS), Laurent (BNP Paribas, surname inaudible), and Bonetti (Evercore)

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