Ralph Lauren sees faster growth on high pricing, new customers

Bloomberg

Ralph Lauren Corp is targeting sales growth over the next three years that’s faster than Wall Street’s estimates, with the fashion brand aiming to pick up new customers and continuing to raise prices.
The New York-based apparel company is targeting revenue growth in the mid-to-high single digits in each of the next
three fiscal years, including the current one, according to a statement ahead of a presentation to investors.
The new outlook, which excludes currency-related fluctuations, covers the fiscal years that run through the first three months of 2025.
“This company is now poised to accelerate growth and value creation, and we have the momentum to prove it,” Chief Executive Officer Patrice Louvet said in an interview. Canada and the US in particular represent a growth opportunity that investors may be underestimating, he added.
Ralph Lauren’s strategy builds on the company’s work in recent years to close unproductive stores while cutting back on promotions and offering pricier items. If achieved, high-single-digit sales growth would outpace the average of estimates compiled by Bloomberg, which show analysts expecting expansion of 1.6% in the current fiscal year and about 4.5% in the following two periods.
Ralph Lauren is targeting average price increases for its merchandise in the mid-single-digit range over the next several years, Louvet said.
The figure, known as average unit retail, has climbed 64% since the company’s last investor day in 2018, he added. The company has achieved this, in part, by decreasing its reliance on discounts in department stores. Ralph Lauren now sells nearly two thirds of its products via its own stores and websites.
Those higher average prices have helped to boost sales and attract more affluent customers that are willing pay higher prices — a trend retailers refer to as “elevating the brand.”