Ralph Lauren (NYSE: RL) reported Q1 EPS of $2.70, $0.22 better than the analyst estimate of $2.48. Revenue for the quarter came in at $1.51 billion versus the consensus estimate of $1.49 billion.

Full Year Fiscal 2025 and Second Quarter Outlook:

The Company's outlook is based on its best assessment of the current geopolitical and macroeconomic environment, including inflationary pressures, other consumer spending-related headwinds and foreign currency volatility, among others. The full year Fiscal 2025 and second quarter guidance excludes any potential restructuring-related and other net charges that may be incurred in future periods, as described in the "Non-U.S. GAAP Financial Measures" section of this press release.

For Fiscal 2025, the Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, centering on around 2% to 3%. Based on current exchange rates, foreign currency is now expected to negatively impact revenue growth by approximately 150 basis points in Fiscal 2025.

The Company continues to expect operating margin for Fiscal 2025 to expand approximately 100 to 120 basis points in constant currency, driven by gross margin expansion and operating expense leverage. Gross margin is expected to increase approximately 50 to 100 basis points in constant currency. Foreign currency is now expected to negatively impact gross and operating margins by approximately 40 basis points.

For the second quarter, the Company expects constant currency revenues to grow approximately low- to mid-single digits to last year, in a range centered around 3% to 4%. Foreign currency is expected to negatively impact revenue growth by approximately 160 basis points.

Operating margin for the second quarter is expected to expand approximately 80 to 120 basis points in constant currency, with roughly 110 to 130 basis points of gross margin expansion more than offsetting higher planned operating expenses to support key marketing campaigns in the quarter. Excluding marketing expense, operating expenses are expected to decline slightly as a percent of sales compared to prior year. Foreign currency is expected to negatively impact gross and operating margins by approximately 40 and 50 basis points, respectively, in the second quarter.

The Company's full year Fiscal 2025 tax rate is now expected to be in the range of approximately 22% to 23%, increasing from 19% in the prior year, following discrete tax benefits recognized in the prior year period. The second quarter tax rate is expected to be in the range of 21% to 22%.

The Company continues to expect capital expenditures for Fiscal 2025 of approximately $300 million to $325 million.

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