Executive Summary
Ralph Lauren reported QQ2 2025 revenue of $1.726 billion, down 10.8% year-over-year and up 14.1% quarter-over-quarter. Gross profit was $1.156 billion with a gross margin of 66.96%, while operating income reached $179 million and net income was $148 million, translating to diluted EPS of $2.31 and basic EPS of $2.36. The quarter featured solid operating efficiency in an environment of softer year-on-year demand, but SG&A remained a meaningful proportion of revenue at roughly 56% of sales, contributing to an operating margin of 10.4% and net margin of 8.57%. Free cash flow was $55.5 million on $1.726 billion of revenue, underscoring cash-generation capability even as the company continued to allocate capital to share repurchases ($129 million) and dividends ($51.4 million). Net debt stood at approximately $1.313 billion against total liquidity of about $2.717 billion (cash plus cash equivalents and short-term investments), leaving a measured but elevated leverage profile (net debt to EBITDA around 5.15x, based on reported EBITDA of $255.4 million). Management commentary is not included in the dataset; however, the results imply ongoing focus on direct-to-consumer (DTC) strength, brand discipline, and inventory management as drivers of the near-term path to improved profitability and cash flow. Considering valuation indicators (P/E ~20.8x, P/S ~7.1x, P/B ~5.0x) and a modest dividend yield (~0.42%), the stock presents a balanced-risk, balanced-reward profile tuned to brand desirability and expense discipline in a challenging consumer environment.
Key Performance Indicators
QoQ: 14.14% | YoY:-10.75%
QoQ: -14.20% | YoY:-43.69%
QoQ: -12.28% | YoY:-46.53%
QoQ: -11.61% | YoY:-44.47%
Key Insights
Revenue: $1,726.0m (YoY -10.75%, QoQ +14.14%); Gross Profit: $1,155.7m (YoY -10.13%, QoQ +8.43%), Gross Margin: 66.96%; Operating Income: $178.9m (YoY -43.69%, QoQ -14.20%), Operating Margin: 10.37%; Net Income: $147.9m (YoY -46.53%, QoQ -12.28%), Net Margin: 8.57%; EPS (basic): $2.36, EPS (diluted): $2.31 (YoY EPS -44.47%, QoQ -11.61%); EBITDA: $255.4m (EBITDA Margin: 14.80%); Free Cash Flow: $55.5m; Operating Cash Flow: $97.2m; Capex: $41.7m; Cash at End of Period: $1,362.2m; Cash and Cash Equ...
Financial Highlights
Revenue: $1,726.0m (YoY -10.75%, QoQ +14.14%); Gross Profit: $1,155.7m (YoY -10.13%, QoQ +8.43%), Gross Margin: 66.96%; Operating Income: $178.9m (YoY -43.69%, QoQ -14.20%), Operating Margin: 10.37%; Net Income: $147.9m (YoY -46.53%, QoQ -12.28%), Net Margin: 8.57%; EPS (basic): $2.36, EPS (diluted): $2.31 (YoY EPS -44.47%, QoQ -11.61%); EBITDA: $255.4m (EBITDA Margin: 14.80%); Free Cash Flow: $55.5m; Operating Cash Flow: $97.2m; Capex: $41.7m; Cash at End of Period: $1,362.2m; Cash and Cash Equivalents: $1,355.0m; Total Debt: $2,667.9m; Net Debt: $1,312.9m; Equity: $2,442.3m; Current Ratio: 1.723; Quick Ratio: 1.184; Cash Ratio: 0.648; DSO: 33.56 days; Inventory Days: 178 days; Debt to Capitalization: 0.522; Debt to Equity: 1.092; Dividend Yield: 0.418%; P/E: 20.80x; P/B: 5.04x; P/S: 7.13x; Enterprise Value Multiple: 53.31x.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.73B |
-10.75% |
14.14% |
| Gross Profit |
1.16B |
-10.13% |
8.43% |
| Operating Income |
178.90M |
-43.69% |
-14.20% |
| Net Income |
147.90M |
-46.53% |
-12.28% |
| EPS |
2.36 |
-44.47% |
-11.61% |
Key Financial Ratios
operatingProfitMargin
10.4%
operatingCashFlowPerShare
$1.55
freeCashFlowPerShare
$0.89
dividendPayoutRatio
34.8%
Management Commentary
No earnings call transcript data provided in the dataset. Consequently, there are no management quotes or theme-by-theme highlights to extract. If a transcript becomes available, we can append targeted quotes by theme (strategy, operations, market conditions) with context and significance.
Forward Guidance
The dataset does not include explicit forward guidance from Ralph Lauren management for QQ3/Q4 or FY2025. In absence of formal guidance, investors should monitor: (1) revenue trajectory and gross margin stability as the mix shifts toward DTC and e-commerce; (2) SG&A discipline to sustain margin improvement, particularly as fixed costs flow through with store footprint and e-commerce investments; (3) working capital dynamics and inventory turnover given the measured inventory days (178 days) and related cash conversion; (4) debt management and leverage trajectory to support dividend and buyback capacity; (5) potential currency and macroeconomic headwinds in key geographies (North America, Europe, Asia). If the company sustains a resilient DTC growth, maintains or modestly expands gross margin, and improves operating leverage, free cash flow should rise, supporting deleveraging and enhanced shareholder value. Key factors to monitor: revenue growth pace, gross margin progression, SG&A as a percent of revenue, inventory levels, and cash conversion cycle.