Executive Summary
Ralph Lauren reported a solid set of fundamentals in QQ4 2025 with revenue of $1.6973 billion, up 8.25% year-over-year but down 20.82% sequentially from the prior quarter. The quarter delivered a robust gross margin of 68.66% and an operating margin of 9.13%, translating to an operating income of $155.0 million and net income of $129.0 million (EPS of $2.07, diluted $2.03). Despite the quarter-to-quarter revenue pullback, the company produced meaningful earnings growth vs. a year ago and maintained disciplined expense management, contributing to EBITDA of $230.7 million and free cash flow of $42.3 million. Cash generation remained healthy, with cash and cash equivalents of roughly $1.922 billion and total liquidity supported by a net debt position of about $0.725 billion (debt of $2.6475 billion against cash/liquids of ~$2.083 billion). The balance sheet remains solid, with a current ratio of 1.78 and a debt-to-capitalization of ~0.506x, providing flexibility to fund DTC investments and selective openings or refurbishments while navigating seasonality in luxury apparel.
Near-term performance reflects seasonality and a difficult QoQ comparison base, rather than a fundamental deterioration in brand momentum. Management commentary (when available) typically emphasized brand strength, omni-channel initiatives, and discipline on cost structure. Absent explicit full-year guidance in the data provided, the outlook hinges on continued demand for premium apparel, sustained margin discipline, and a measured expansion of direct-to-consumer and digital channels. Investors should monitor quarterly regional revenue progression, gross margin stability, inventory levels (days of inventory outstanding), and any updated guidance from management on 2026 priorities and expectations.
Key Performance Indicators
QoQ: -20.52% | YoY:11.65%
QoQ: -60.23% | YoY:43.78%
QoQ: -56.62% | YoY:42.23%
QoQ: -56.51% | YoY:46.81%
Key Insights
Revenue: $1,697,300,000; YoY +8.25%, QoQ -20.82% | Gross Profit: $1,165,300,000; Gross Margin ~68.66% | Operating Income: $155,000,000; Margin ~9.13% | Net Income: $129,000,000; Net Margin ~7.60% | EPS: $2.07 GAAP, Diluted $2.03; EBITDA: $230,700,000; EBITDA Margin ~13.59% | Operating Cash Flow: $122,200,000; Free Cash Flow: $42,300,000 | Capex: $79,900,000 | Cash and Equivalents: ~$1.9225B; Total Debt: $2.6475B; Net Debt: ~$0.725B | Current Ratio: 1.776; Quick Ratio: 1.331; Debt/Equity: ~1.023;...
Financial Highlights
Revenue: $1,697,300,000; YoY +8.25%, QoQ -20.82% | Gross Profit: $1,165,300,000; Gross Margin ~68.66% | Operating Income: $155,000,000; Margin ~9.13% | Net Income: $129,000,000; Net Margin ~7.60% | EPS: $2.07 GAAP, Diluted $2.03; EBITDA: $230,700,000; EBITDA Margin ~13.59% | Operating Cash Flow: $122,200,000; Free Cash Flow: $42,300,000 | Capex: $79,900,000 | Cash and Equivalents: ~$1.9225B; Total Debt: $2.6475B; Net Debt: ~$0.725B | Current Ratio: 1.776; Quick Ratio: 1.331; Debt/Equity: ~1.023; Interest Coverage: ~11.57x | Inventory: $949.6M; DIO: ~160.65 days; Receivables Turnover: ~3.69x; CCC: ~111.25 days | P/E: ~26x; P/S: ~7.9x; P/BV: ~5.18x; Dividend Yield: ~0.38%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.70B |
8.25% |
-20.82% |
| Gross Profit |
1.17B |
11.65% |
-20.52% |
| Operating Income |
155.00M |
43.78% |
-60.23% |
| Net Income |
129.00M |
42.23% |
-56.62% |
| EPS |
2.07 |
46.81% |
-56.51% |
Key Financial Ratios
operatingProfitMargin
9.13%
dividendPayoutRatio
39.8%
Management Commentary
No earnings call transcript data provided in the input. Consequently, no quotes or management-specific color can be extracted from the call. If you provide the transcript, I will extract themes and quotes by management related to strategy, operations, and market conditions.
Forward Guidance
No explicit numeric full-year guidance was present in the provided data. Given the QQ4 2025 quarter’s mix—solid YoY margin expansion but a seasonally weak QoQ top line—the prudent baseline is a modestly constructive view on margins supported by pricing, product mix, and cost controls, with growth driven by direct-to-consumer expansion, digital channel optimization, and selective international growth. Investors should monitor: (1) regional revenue progression (especially North America vs international markets), (2) gross margin sustainability amid mix shifts and any currency impacts, (3) working capital dynamics given elevated DIO and CCC, and (4) continued investments in omni-channel capabilities and store network optimization. If management provides updated guidance, assess achievability against the luxury consumer backdrop, currency headwinds, and potential promotional intensity in a volatile macro environment.