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Due to a recovery in demand for luxury goods, Ralph Lauren Group has announced that it is raising its growth forecast for 2021. However, the group warns that supply costs will rise to meet this new demand.
The increase in sales in North America has particularly helped Ralph Lauren to raise its revenue forecasts for 2021, in line with the rebound of the luxury industry after the losses due to the 2020 pandemic. Consumers are starting to go out and consume again. Many are splurging on their wardrobes.
Ralph Lauren‘s European peers, including LVMH and Hermès, also reported strong sales increases, despite concerns about a slowdown in China and a decline in tourist purchases, a key source of revenue for the sector.
Ralph Lauren said it expects fiscal 2022 sales at constant currency to rise 34% to 36%, compared with an earlier forecast of a potential 25% to 30% increase.
Ralph Lauren‘s net sales were $1.50 billion in the second quarter ended September 25, up from $1.19 billion a year earlier. Analysts had expected revenue to average $1.47 billion, according to IBES data from Refinitiv.
Despite the good news, however, the group remains cautious, saying it expects to face higher shipping and commodity supply costs in the coming months, especially as Ralph Lauren spends a lot of money making sure all its shops are well stocked for the winter season.
Unlike its European luxury counterparts who manufacture the bulk of their products domestically in their home market, Ralph Lauren sources the vast majority of its products outside the US, primarily from China and Vietnam, making the company more prone to delays and factory closures.
These supply chain disruptions have particularly hampered the apparel industry, whose online inventory is close to running out as the holiday season approaches.
However, Ralph Lauren said it was confident it had enough inventory to meet holiday demand, in part because it spends a lot of money shipping products by air.
“While we expect continued variability in inventory flows from quarter to quarter, we believe our inventory is well positioned to meet demand for the upcoming holiday season and spring 2022,” said Jane Nielsen, the group’s chief financial officer.
Read also > RÉMY COINTREAU POSTS BETTER THAN EXPECTED Q2 RESULTS
Featured photo : © Ralph Lauren[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
Due to a recovery in demand for luxury goods, Ralph Lauren Group has announced that it is raising its growth forecast for 2021. However, the group warns that supply costs will rise to meet this new demand.
The increase in sales in North America has particularly helped Ralph Lauren to raise its revenue forecasts for 2021, in line with the rebound of the luxury industry after the losses due to the 2020 pandemic. Consumers are starting to go out and consume again. Many are splurging on their wardrobes.
Ralph Lauren‘s European peers, including LVMH and Hermès, also reported strong sales increases, despite concerns about a slowdown in China and a decline in tourist purchases, a key source of revenue for the sector.
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Due to a recovery in demand for luxury goods, Ralph Lauren Group has announced that it is raising its growth forecast for 2021. However, the group warns that supply costs will rise to meet this new demand.
The increase in sales in North America has particularly helped Ralph Lauren to raise its revenue forecasts for 2021, in line with the rebound of the luxury industry after the losses due to the 2020 pandemic. Consumers are starting to go out and consume again. Many are splurging on their wardrobes.
Ralph Lauren‘s European peers, including LVMH and Hermès, also reported strong sales increases, despite concerns about a slowdown in China and a decline in tourist purchases, a key source of revenue for the sector.
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