Ralph Lauren Corp. has projected subdued revenue growth for the upcoming fiscal year, as the apparel giant grapples with renewed U.S. tariffs and potential inflationary pressures on consumer spending. The company is also considering further price increases to offset the impact of evolving trade policies, executives said during a post-earnings call on Thursday.
Despite the cautious outlook, the company reported better-than-expected fourth-quarter results. Revenue for the quarter ended March 29 came in at $1.70 billion, ahead of analysts’ expectations of $1.65 billion, while adjusted earnings per share stood at $2.27, surpassing consensus estimates.
CEO Patrice Louvet indicated that additional pricing adjustments could be introduced in fiscal 2025 and spring 2026, on top of the already planned increases in North America and Asia. The strategy is part of Ralph Lauren’s broader effort to navigate ongoing trade tensions and shifting global economic conditions.
For fiscal 2026, the company anticipates revenue growth in the low single digits compared to the previous year, citing the compounded effects of tariffs, inflation, and softening consumer sentiment. Analysts had forecast a 4.39% rise, according to LSEG data.
“The outlook is far more modest,” said Sky Canaves, analyst at eMarketer. “Weakening consumer sentiment and trade-related headwinds could diminish the global appeal of legacy American brands like Ralph Lauren.” Like many global retailers, Ralph Lauren continues to feel the effects of volatile U.S. trade policies. Although a recent 90-day trade truce between Washington and Beijing eased tariffs on Chinese goods from 145% to 30%, the reprieve is expected to be temporary.
Chief Financial Officer Justin Picicci noted that the company is actively diversifying its global supply chain to mitigate potential tariff exposure. In fiscal 2025, 96% of Ralph Lauren’s products were manufactured outside the United States, with 12% sourced from China. However, products imported from China into the U.S. represented a low-single-digit percentage of the total.
China remains a key market for the brand, trailing only North America and Europe in significance. Ralph Lauren also warned that gross margins could come under pressure in the second half of the year due to tariff-related costs. Despite this, shares rose roughly 2% in early trading, buoyed by the company’s stronger-than-expected earnings performance.