The Winter Olympics may be crimped by COVID and shrouded in controversy, and Facebook’s metaverse ambitions facing a brutal attack, and yet, designer-retailer Ralph Lauren is riding high — even though it has ties to both.
This, as the official outfitter of the U.S. Olympic team and 55-year-old maker of the “Polo” brand delivered a set of holiday results and business guidance that more closely resembled the “Miracle On Ice” than a mid-winter freeze, as the New York-based firm played up its efforts to attract the next generation of customers.
Although CEO Patrice Jean Louis Louvet told investors on the company’s earnings call Thursday (Feb. 3) that while the Polo brand and “elevated sportswear” still sit at the heart of what Ralph Lauren does, the company is also aggressively seeking new, young customers that skateboard, play Roblox in the metaverse, and wear other logos from professional sports teams such as the Boston Red Sox.
“Our better-than-expected results across all three regions are a testament to the outstanding work our teams have done to fundamentally reposition our business, elevate our brand and pivot to offense,” Louvet said, pointing to “multiple engines” at work in North America and elsewhere that were being used to recruit high-value consumers and develop high-potential products, via a “multi category lifestyle proposition.”
From Hoodies to Evening Gowns
“Ralph Lauren is one of the few brands in the marketplace with the authenticity, quality and credibility to deliver products ranging from hoodies to evening gowns” Louvet said, adding that the company intended to continue to leverage its “flexibility and competitive advantages.”
“This flexibility enables us to be agile, as consumers shift their wardrobes to a new hybrid mix of elevated with comfortable casuals,” he added.
While Ralph Lauren’s total revenues for the three months ending Dec. 25 rose 27% to $1.8 billion, the company said its increasingly important “total digital ecosystem” rose more than 40% during the retailer’s most important selling season, over 60% from two years ago.
“This was driven primarily by full-price holiday selling as we delivered the right mix of products, pullback on promotion, and invested in AI-powered targeting and new full price consumer acquisition,” Louvet said.
After touching a one-year low on Jan. 26, with a weak and challenging market environment, investors appear to have had a major rethink on the Ralph Lauren story and turnaround strategy and have pushed the stock up for six consecutive sessions for about a 12% gain.
While more work still needs to be done on the company’s multi-category and multi-platform retail proposition, which includes its own physical stores, websites and social media campaigns, as well as its vast portfolio of store-in-store locations, the early results and forecasts look reassuring. Enough so that the retailer also raised its fourth quarter and full year sales outlook by five percentage points for the period ending in March, and now expects to book 39% to 41% sales growth for the year.