Ralph Lauren beats profit estimates on stable demand in Europe, China

Ralph Lauren Corp beat first-quarter profit estimates as steady demand for its pricey denims and polo shirts in Europe and China offset slower sales in the US, sending its shares up 4 per cent premarket on Wednesday.

Steady appetite from wealthier consumers has driven demand for designer fashion at companies such as Canada Goose and Miu Miu-owner Prada, even as their European rivals signaled cooling luxury demand due to challenges in China and a pullback in spending by "aspirational" shoppers.

Cautious inventory planning by wholesale retailers pulled down Ralph Lauren's North America revenue by 4 per cent to $608 million, but sales in Europe and Asia grew from last year.

That contrasts a recent string of bleak earnings from European rivals including the world's biggest luxury group LVMH , German fashion house Hugo Boss, Burberry and Gucci owner Kering.

Ralph Lauren's net revenue rose 1 per cent to $1.51 billion in the first quarter. Analysts on average had expected a decline of 0.46 per cent, according to LSEG data.

It earned $2.70 per share on an adjusted basis, beating estimates of $2.47.

Adjusted gross margin also rose 170 basis points from the prior year to 70.5 per cent, aided by lower cotton costs and full-price selling.

For the current quarter, it expects constant currency revenues to grow in the range of 3 per cent to 4 per cent, compared with estimates for a 3 per cent rise.

The Polo Bear sweaters maker reaffirmed its fiscal 2025 sales and margin expectations.