(Reuters) – Ralph Lauren Corp reported a surprise rise in fourth-quarter revenue and easily beat profit estimates on Thursday, as its new seasonal collections and Polo bags resonated with affluent shoppers when luxury spending has cooled in U.S.
The company also benefited from a strong recovery in demand in China after the easing of COVID-19 restrictions, with sales in the country jumping more than 30%.
Ralph Lauren (NYSE:RL)’s shares jumped nearly 5% in premarket trading.
Revenue in North America – the company’s biggest market – decreased a smaller-than-expected 3%, also due to some post-holiday season sales shifting to the prior quarter.
Asia revenue rose 13% to $390 million, riding the surge in China.
Ralph Lauren said it expects revenue to increase in the low-single digits range for fiscal 2024, on a constant currency basis, while analysts were expecting a 5.56% rise to $6.73 billion, according to Refinitiv IBES data.
Luxury companies ranging from LVMH and Gucci-owner Kering (EPA:PRTP) to Coach handbag maker Tapestry (NYSE:TPR) have flagged softer demand in the U.S. as consumers turn cautious after a post-pandemic spending spree.
Net revenue rose to $1.54 billion in the fourth quarter, compared with analysts’ estimates for a drop to $1.47 billion, according to Refinitiv IBES data.
Excluding one-time items, Ralph Lauren earned 90 cents per share, beating estimates of 61 cents.
