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Ralph Lauren said second-quarter revenue rose 5% to $1.6 billion, beating expectations as it managed to evade macroeconomic challenges such as inflation and ongoing Covid-19 disruptions in China.
Asia revenue increased 17% to $316 million. Despite store closures in China, physical store sales in Asia increased by 25% and online sales by 22%. Revenues in North America increased by 3% and revenues in Europe remained stable compared to last year. Shares rose 5% on Thursday.
“We’ve had disproportionate growth in Asia, where we’re seeing brand strength in almost every country,” said Patrice Louvet, president and chief executive of Ralph Lauren, during Thursday’s earnings call. “We are particularly proud of the continued growth in China, even with the closure of a number of our stores.”
This quarter, the company opened 29 new stores and concessions in its main markets, the majority of them in mainland China. “Our brand momentum and opportunities in China remain strong,” Louvet said. “China not only provides the successful models of our globally elevated ecosystem strategy, it also represents one of many long-term geographic opportunities for our brand, with strong brand momentum, higher [average unit retail price] in the world and an important lead for strategic store openings to strengthen our relationship with the Chinese consumer. Ralph Lauren also reported strong demand in its basic and outerwear categories.