Executive Summary
Ralph Lauren reported a solid start to its QQ1 2026 with revenue of $1.719 billion, up 13.7% year over year. The quarter delivered a robust gross margin of 68.8% and an operating margin of 16.8%, supported by a favorable mix and pricing power within its premium apparel portfolio. EBITDA reached $347.7 million, equating to an EBITDA margin of approximately 20.2%, while net income was $220.4 million and diluted earnings per share were $3.526 on 62.5 million weighted shares, or $3.613 basic EPS. The results reflect meaningful top-line momentum and a favorable cost structure, underscoring the strength of the Ralph Lauren brand and its direct-to-consumer (DTC) presence in a resilient luxury market.
The company generated $176.1 million of operating cash flow in the quarter, but free cash flow was negative by about $11.2 million, largely due to capital expenditures and a deliberate capital allocation program. Liquidity remains solid with $2.090 billion of cash and cash equivalents at period end and total debt of $3.239 billion, resulting in a net debt position of about $1.148 billion. Management has pursued an active capital allocation strategy, evidenced by substantial share repurchases (~$323.3 million) and a meaningful debt repayment (~$492.2 million) during the period, complemented by a modest dividend payout (~$50.7 million).
Overall, the QQ1 2026 results point to a disciplined growth trajectory: solid top-line expansion, healthy profitability, and a balanced approach to liquidity and capital deployment. The near-term outlook will hinge on consumer demand, DTC execution, mix effects, and any currency headwinds, but the balance sheet and cash-generation profile provide ample flexibility to sustain investments in brand, e-commerce, and footprint optimization.
Key Performance Indicators
Key Insights
Revenue: $1,719.1 million; YoY growth: 13.68%; QoQ growth: 1.28%
Gross Profit: $1,182.1 million; Gross Margin: 68.76% (1,182.1 / 1,719.1)
Operating Income: $288.2 million; Operating Margin: 16.76%
EBITDA: $347.7 million; EBITDA Margin: 20.23%
Net Income: $220.4 million; Net Margin: 12.82%
EPS: $3.613 (basic); EPS Diluted: $3.526; Weighted Avg Shs Out: 61.0 million (diluted 62.5 million)
Cash Flow: Operating cash flow $176.1 million; Capex $187.3 million; Free cash flow (FCF) −$11.2 million...
Financial Highlights
Revenue: $1,719.1 million; YoY growth: 13.68%; QoQ growth: 1.28%
Gross Profit: $1,182.1 million; Gross Margin: 68.76% (1,182.1 / 1,719.1)
Operating Income: $288.2 million; Operating Margin: 16.76%
EBITDA: $347.7 million; EBITDA Margin: 20.23%
Net Income: $220.4 million; Net Margin: 12.82%
EPS: $3.613 (basic); EPS Diluted: $3.526; Weighted Avg Shs Out: 61.0 million (diluted 62.5 million)
Cash Flow: Operating cash flow $176.1 million; Capex $187.3 million; Free cash flow (FCF) −$11.2 million
Balance Sheet: Cash and equivalents $2.0919 billion; Total debt $3.2391 billion; Net debt ~$1.1475 billion; Total assets $7.7517 billion; Total stockholders’ equity $2.5153 billion; Current ratio ~1.84x
Liquidity/Leverage: Net debt to EBITDA ≈ 3.30x (using quarter EBITDA of $347.7m and net debt $1,147.5m)
Capital Allocation: Share repurchases $323.3 million; Debt repayments $492.2 million; Dividends paid $50.7 million; FX impact on cash $74.4 million; Cash end period $2.0919 billion
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.72B |
13.68% |
1.28% |
| Gross Profit |
1.18B |
10.91% |
1.44% |
| Operating Income |
288.20M |
38.23% |
85.94% |
| Net Income |
220.40M |
30.72% |
70.85% |
| EPS |
3.61 |
35.32% |
74.55% |
Management Commentary
Transcript data not provided in the original input. No management quotes or thematic notes from an earnings call are available in this dataset. If you can supply the earnings call transcript, I can extract themes and quotes by strategic area (growth strategy, operations, market conditions) and assign them to the appropriate sections.
Forward Guidance
No formal forward-looking guidance was included in the provided data for QQ1 2026. The quarter’s performance implies continued demand strength for premium apparel and a constructive mix shift toward higher-margin DTC channels, but investors should await explicit guidance on full-year expectations. In the interim, key factors to monitor include: (1) cadence of DTC growth versus wholesale, (2) product category and geographic mix to sustain gross margin, (3) currency translation effects given global exposure, (4) inventory discipline and working capital dynamics, and (5) the pace of capital allocation (buybacks, debt reduction, and potential capex cycles) as the company navigates macro uncertainty.