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Ralph Lauren expects mid to high-single digits growth through fiscal 2025

By Prachi Singh

19 Sept 2022


Image: Ralph Lauren website

The Ralph Lauren Corporation expects an acceleration in revenue growth to a compound annual growth rate of mid to high-single digits in constant currency over the next three years, through fiscal 2025.

The company said in a statement that operating profit growth is expected to exceed the rate of top-line growth as a result of continued operating margin expansion.

The company plans to present its strategic growth plan, 'Next Great Chapter: Accelerate', to deliver sustainable, long-term growth and value creation at the investor day in New York City. Ralph Lauren will also ring opening bell of the New York Stock Exchange in celebration of the company’s 25th anniversary since IPO.

“This Company started over 50 years ago with a dream and a tie – and today, while it has expanded to become a leading luxury lifestyle brand, our vision for timelessness, authenticity and a life well-lived remains constant,” said Ralph Lauren, executive chairman and chief creative officer.

The company added that operating margin is expected to expand to at least 15 percent by fiscal 2025 in constant currency, driven by a combination of modest gross margin expansion and operating expense leverage balanced with continued investments in the company’s long-term strategic priorities.

In addition, capital expenditures are expected to represent approximately 4 percent to 5 percent of revenue annually. The company expects to continue returning excess free cash flow to shareholders over the next three years, with plans to return approximately 2 billion dollars on a cumulative basis through fiscal 2025.

The company’s board of directors also increased the regular quarterly cash dividend on the company's common stock by 9 percent to 75 cents per share at the beginning of fiscal 2023, representing an annual dividend of 3 dollars per share.

The company further said that its current share repurchase authorization enables it to repurchase up to 1.4 billion dollars in shares of Class A common stock, subject to overall business and market conditions.

“Since our last investor day in 2018, we have transformed our business – building a strong foundation with multiple engines of growth that are already showing momentum. Our clear and choiceful strategies are expected to deliver sustainable long-term growth and value creation – fuelled by our strong balance sheet and operating discipline,” added Patrice Louvet, the company’s president and chief executive officer.

Ralph Lauren Corporation