(Reuters) -Ralph Lauren beat Wall Street estimates for quarterly revenue on Wednesday as its younger, more affluent customer base continued to snap up its pricey shirts and sweaters in the U.S., signaling steady demand ahead of the key holiday season.
Shares of Ralph Lauren were up 1% in choppy premarket trading, after it also projected current-quarter sales below market expectations citing caution around wholesale demand.
Ralph Lauren’s cable-knit jumpers, Polo shirts and handbags have continued to pull shoppers even as the wider luxury industry saw a slowdown in the United States that has hit companies such as luxury powerhouse LVMH and parka maker Canada Goose.
Ralph Lauren has leaned on its website and physical stores to drive demand, strengthening its direct-to-consumer (DTC) business, at a time when several global brands are seeing weaker wholesale revenues as retailers, cautious about the holiday season, order fewer products.
The company added 1.3 million new customers to its DTC channel, aiding a 6% jump in global DTC same-store sales in the second quarter ended Sept. 30.
Ralph Lauren’s China business has also recovered strongly, with sales jumping more than 20% in the quarter, even as weak demand in the market has hurt other luxury firms.
The company largely maintained its annual revenue forecast, saying sales growth would be around 1-2% for the fiscal 2024.
It also expects third-quarter revenue to grow by roughly 1% to 2%, below analysts’ average estimate for a 3.8% rise to $1.90 billion, according to LSEG data.
Net revenue rose to $1.63 billion in the second quarter from $1.58 billion a year earlier, compared with analysts’ forecast of $1.61 billion.
On an adjusted basis, the company reported a profit of $2.10 per share. Analysts had expected a profit of $1.93 per share.
(Reporting by Deborah Sophia in Bengaluru; editing by Milla Nissi)
