Earnings call: Ralph Lauren reported higher-than-anticipated results

Ralph Lauren Corporation (NYSE: NYSE: RL ) reported first quarter fiscal 2025 financial results, with total revenue up 3% and retail up 5%, beating expectations. The company's strategic initiatives, including branding and core product expansion, showed favorable results, particularly in international sales and direct-to-consumer businesses. Although sales in North America were lower due to planned wholesale reductions and the Easter shopping season, Ralph Lauren's overall financial position was strong and the company experienced strong growth in Europe and Asia. Adjusted gross margins expanded and management remains confident in its long-term strategy to drive sustainable growth.

Key Takeaways

• Ralph Lauren's total revenue increased 3% and retail up 5%.
• Adjusted gross margin increased 210 basis points to 70. 9%.
• North American sales decreased 4%, while Europe and Asia increased 7% and 9%, respectively.
• Constant currency revenue is expected to increase low single digits in fiscal year 2025.
• Ralph Lauren ended the quarter with $1. 8 billion in cash and short-term investments.
• Management maintained full-year guidance and expressed confidence in the brand's strategy and growth drivers.

Company Outlook

• Low single digit revenue growth is expected in fiscal year 2025.
• Operating margins are expected to expand 100-120 bps.
• Gross margins are expected to increase 50-100 bps.
• Second quarter revenues are expected to grow low to mid single digits.
• The tax rate is expected to be 22%-23% in fiscal year 2025.

Bearish Highlights

• North America revenues decreased 4% due to planned wholesale reductions.
• North America Proprietary Digital Company revenues decreased 4% due to softening traffic trends.

Bullish Highlights

• International markets, including Europe and Asia, showed strong growth.
• Adjusted operating margin increased 140 basis points to 14. 8%.
• The company's lifestyle portfolio and strategic marketing activities continue to drive positive growth.

Misses

• Revenues declined in North America, primarily in the wholesale channel.
• North America proprietary digital business declined due to softening traffic.

Q&A Highlights

• Executives discussed strategies to elevate the brand and improve value perception.
• Focused on closing lower-tier wholesale and prioritizing quality sales channels.
• Plans to balance growth between brick-and-mortar stores and digital networks.

Ralph Lauren's first quarter earnings call highlighted a strong start to fiscal 2025, with results that beat expectations. The results reflect the effectiveness of strategic initiatives and the brand's resilience in a challenging macroeconomic environment. The company's outlook remains cautiously optimistic, supported by its commitment to long-term value creation and strategic agility, as the company continues to address market pressures and invest in its digital and international presence.

InvestingPro Insights

As Ralph Lauren Corporation (NYSE: RL)'s first quarter fiscal 2025 results are released, Investing Pro's metrics and tips can help you better understand the company's financial health and the stock's potential.

Investment Data

• Ralph Lauren's market capitalization of $10 billion indicates the company's large presence in the apparel industry.

• Ralph Lauren's P/E ratio of 16. 27 suggests a reasonable valuation relative to its near-term earnings growth rate.

• The company's impressive gross margin of 66. 76% for the trailing 12 months through Q3 2024 indicates its ability to maintain profitability despite market volatility.

Investment Tip

• Ralph Lauren has a perfect Piotroski Score of 9, highlighting its financial strength and operational efficiency.

• The company has increased its dividend for three consecutive years, reflecting its commitment to returning value to shareholders. In fact, the company has maintained its dividend payment for 22 consecutive years, demonstrating its consistency and reliability as an income stock.

For investors looking for a more comprehensive analysis, nine Investing Pro Tips are available to access through the Investing Pro platform. These tips provide insights into share price volatility, cash flow stability, debt management, and other factors essential to making an informed investment decision. For example, a company that can fully cover interest payments with cash flow is an encouraging sign for debt holders and equity investors.

In addition, analysts expect Ralph Lauren to be profitable this year, which is consistent with the positive outlook presented in the company's earnings call. The combination of strong gross margins, stable dividend growth, and Piotroski's favorable ratings position makes Ralph Lauren a potentially attractive choice for both growth-focused and income portfolios.

For detailed indicators and additional instructions, investors are https: // www. Investing. Com/Pro/RL allows you to find out the entire Investing Pro hints and data points.

Full transcript - Ralph Lauren Corp Class A (RL) Q1 2025:

Welcome to handling Ralph Lauren, the first quarter of 2025. At the moment, participants are only for hearing. Later, we will set up a questio n-an d-answer session. I will explain how to ask the question at that time. [Follow the operator's instructions. Then, I would like to take over the meeting to Ms. Colinna Van del Ginsst. Please continue.

Colinna Van del Ginst: Good morning, thank you for participating in the first quarter of Ralph Loren 2025. Today is Patrice Louve, the president and CEO, and the Supreme Finance Officer Justin Pichich. And the highest finance manager Justin Pichich. After the greeting, we will accept a question, but we will have one for one per person. At today's telephone conference, we will consistently talk about our performance. See the press release this morning for financial results including foreign currency. In addition, we will also describe the future outlook in the sense of the Federal Securities Law, including the financial outlook. The description of the future outlook is not a guarantee, and our actual achievements may be very different from what is specified or suggested in the future outlook. Our expectations are accompanied by many risks and uncertainty. The main risks and uncertainty, which can cause our business performance significantly different from the current expectations, are detailed in our SEC submission documents. For the disclosure and adjustment table of no n-GAAP indicators used when explaining our performance, please refer to the morning financial results and SEC submission documents that can be viewed in Investment Communications. < SPAN> For detailed indicators and additional instructions, investors are https: // wwww. Investing. Com/Pro/RL allows you to find out the entire Investing Pro hints and data points.

Welcome to handling Ralph Lauren, the first quarter of 2025. At the moment, participants are only for hearing. Later, we will set up a questio n-an d-answer session. I will explain how to ask the question at that time. [Follow the operator's instructions. Then, I would like to take over the meeting to Ms. Colinna Van del Ginsst. Please continue.

Colinna Van del Ginst: Good morning, thank you for participating in the first quarter of Ralph Loren 2025. Today is Patrice Louve, the president and CEO, and the Supreme Finance Officer Justin Pichich. And the highest finance manager Justin Pichich. After the greeting, we will accept a question, but we will have one for one per person. At today's telephone conference, we will consistently talk about our performance. See the press release this morning for financial results including foreign currency. In addition, we will also describe the future outlook in the sense of the Federal Securities Law, including the financial outlook. The description of the future outlook is not a guarantee, and our actual achievements may be very different from what is specified or suggested in the future outlook. Our expectations are accompanied by many risks and uncertainty. The main risks and uncertainty, which can cause our business performance significantly different from the current expectations, are detailed in our SEC submission documents. For the disclosure and adjustment table of no n-GAAP indicators used when explaining our performance, please refer to the morning financial results and SEC submission documents that can be viewed in Investment Communications. For detailed indicators and additional instructions, investors are https: // www. Investing. Com/Pro/RL allows you to find out the entire Investing Pro hints and data points.

Welcome to handling Ralph Lauren, the first quarter of 2025. At the moment, participants are only for hearing. Later, we will set up a questio n-an d-answer session. I will explain how to ask the question at that time. [Follow the operator's instructions. Then, I would like to take over the meeting to Ms. Colinna Van del Ginsst. Please continue.

Colinna Van del Ginst: Good morning, thank you for participating in the first quarter of Ralph Loren 2025. Today is Patrice Louve, the president and CEO, and the Supreme Finance Officer Justin Pichich. And the highest finance manager Justin Pichich. After the greeting, we will accept a question, but we will have one for one per person. At today's telephone conference, we will consistently talk about our performance. See the press release this morning for financial results including foreign currency. In addition, we will also describe the future outlook in the sense of the Federal Securities Law, including the financial outlook. The description of the future outlook is not a guarantee, and our actual achievements may be very different from what is specified or suggested in the future outlook. Our expectations are accompanied by many risks and uncertainty. The main risks and uncertainty, which can cause our business performance significantly different from the current expectations, are detailed in our SEC submission documents. For the disclosure and adjustment table of no n-GAAP indicators used when explaining our performance, please refer to the morning financial results and SEC submission documents that can be viewed in Investment Communications.

Patrice Louvet: Thank you, Cori. Good morning, everyone. We are off to a strong start in the third year of our Accelerate Plan, our next big chapter, and are well placed to deliver on our 25th fiscal year and our long-term strategic commitments. Our first quarter results highlight the strength and growing appetite for our iconic brands around the world at a key moment that demonstrates our ability to resonate across cultures, regions and generations. This, combined with our diversified growth engines and organizational agility, gives us confidence that our long-term strategy will continue to deliver results, even in these dynamic times. Our first quarter results beat expectations, driven by strong performance in international retail across all regions and sustained momentum across all consumer metrics. Performances in our global direct-to-consumer and European wholesale businesses more than offset expected softness in our North American wholesale business. At the same time, we continue to invest in our strategic priorities, including marketing, digital capabilities and expanding our ecosystem in key cities. Fueled by a culture of discipline and efficiency, these investments will drive long-term sustainable growth and value creation beyond the current three-year plan. In the first quarter, we made continued progress on three strategic pillars: first, elevating and revitalizing our lifestyle brands; second, advancing and further expanding our core business; and third, winning in key cities with our consumer ecosystem. Let me highlight a few takeaways from the first quarter. First, our efforts to elevate and revitalize our lifestyle brands. From recent activations in Milan, London, New York and across China to our burgeoning social media presence, Ralph Lauren remains at the forefront of culture across geographies and demographics. Major campaigns during the quarter included the women's runway collection show in New York in April. The collection also incorporated Ralph's signature design codes, such as western patterns, shimmering wet lingerie and warm, rich cashmere, expressing the confident, pretty luxury that Ralph does best. The global event exceeded our targets, garnering 16 billion PR impressions.

Jodie Turner-Smith, Jessica Chastain, Kerry Washington, Crystal Yuan, Rebecca Hall, Morgan Spector, and more. As we entered the warmer months, we rolled out our Only Polo campaign, reinforcing our position as the ultimate destination for effortless summer. Our teams delivered on-site activations in Sunset Boulevard in Los Angeles, Roppongi in Tokyo, SoHo in New York, Miami Design District, Dubai, and Seoul. The stars aligned for our Purple Label presentation in Milan this June, as part of Men's Fashion Week, with Usher, John Legend, Chris Pine, Rufus Wainwright, and more, celebrating the new collection. At the prestigious home design trade fair, Salone del Mobile, in Milan, we presented our first collection with a new licensing partner, inviting the international design community to experience American style in Milan. Our 18/6 activity in China led to high double-digit growth, well ahead of our competitors. Our teams leverage these events for long-term brand building, with a focus on quality sales and new customer acquisition. And finally, we are in the midst of a glamorous summer of sports. Our campaign for the Paris 2024 Olympics kicked off with the unveiling of the official uniforms of Team U. S. A., a beloved partnership across nine Olympic Games.

Starting with core products, which account for over 70% of the business, sales grew in the low single digits, slightly outpacing overall company growth in the quarter. Highlights this spring include linen styles from sport shirts to custom suits, the recently reintroduced mesh polo shirt, increased heavyweight jerseys, and Polo Bear polo shirts and sweaters. In kids, linen fabrics saw strong growth along with seasonal mini cable sweaters and flag sweaters, as well as a foray into the big kids segment. High potential categories like apparel, outerwear, and women's handbags all grew in the mid single digits, outpacing overall company growth. In women's, the iconic cable knit sweater, oxford linen and shirts, polo shirts, easy fit shirtdresses, and canvas city jackets were top sellers in the quarter. In bags, strong growth was driven by Polo Women's, where continued momentum from the Polo ID collection led to higher AUR revenues and new customer acquisitions, such as Jennifer Lawrence's yellow Polo ID bag in the spotlight. Starting with our flagship products, which account for over 70% of our business, sales were up in the low single digits, slightly outpacing overall company growth in the first quarter. Highlights this spring include linen styles from sports shirts to custom suits, the recently reintroduced mesh polo shirt, increased heavyweight jerseys, and Polo Bear polo shirts and sweaters. In kids, linen fabrics saw strong growth along with seasonal mini cable sweaters and flag sweaters, as well as a push into the big kids segment. High potential categories like apparel, outerwear, and women's handbags all grew in the mid single digits, outpacing overall company growth. In women's, the iconic cable knit sweater, oxford linen and shirts, polo shirts, easy-fit shirt dresses, and canvas city jackets were top sellers for the quarter. In bags, strong growth was driven by Polo Women's, where continued momentum in the Polo ID collection led to higher AUR revenues and new customer acquisitions, such as Jennifer Lawrence's yellow Polo ID bag, which was spotlighted by her. Starting with core products, which account for over 70% of the business, sales were up in the low single digits, slightly outpacing overall company growth in the first quarter. Highlights this spring include linen styles from sports shirts to custom suits, the recently reintroduced mesh polo shirt, increased heavyweight jerseys, and Polo Bear polo shirts and sweaters. In kids, linen fabrics saw significant growth with seasonal mini cable sweaters and flag sweaters, as well as a foray into the big kids segment. High-potential categories like apparel, outerwear and women's handbags all grew in the mid-single digits, outpacing the company's overall growth. In women's, the iconic cable knit sweater, oxford linen and shirt, polo shirt, easy-fit shirtdress and canvas city jacket were top sellers during the quarter. In bags, strong growth was driven by Polo Women's, where continued momentum from the Polo ID collection led to higher AUR revenue and new customer acquisition, as Jennifer Lawrence stole the spotlight by wearing a yellow Polo ID bag.

The store also features Ralph's first coffee shop in the Midwest. With over 30 coffee shops and five restaurants, the company now engages with over 3 million consumers annually through its hospitality business, attracting a new generation of consumers to Ralph's iconic brand around the world. By region, Asia led growth, again with high single-digit growth this quarter, in line with our outlook. This was followed by Europe, which again exceeded expectations, and North America, which was on track. Momentum in China continued, with sales growing in the low double digits this quarter, amid an extremely favorable comparison, up more than 50% year-over-year. While closely monitoring macroeconomic trends and consumer behavior, our team continues to successfully drive consumer purchasing power within China. In addition, we continue to be disciplined in our ecosystem expansion, with a focus on six major city clusters. Finally, in terms of what drives us, our business continues to be driven by five key drivers: As we incorporate citizenship and sustainability into everything we do, we had some great moments this quarter. First, our collaboration with Navajo designer Naiomi Glass won the Fast Company Innovation by Design award.

Justin Picic: Thank you, Patrice. I am honored to take on the role of CFO, and I thank Ralph, Patrice, Singh and the Board for the support they have shown me throughout this transition. On behalf of the entire Ralph Lauren team, we remain committed to achieving our strategic and financial objectives, leveraging the timeless strength of our brand and our strong momentum around the world. We are off to a strong start in FY25 with first quarter and bottom line results beating expectations. Our quarterly results highlight our continued momentum, growing brand ambition and multiple growth drivers, enabling us to deliver on our commitments in a highly dynamic global operating environment. Our progress in the first quarter also gives us confidence to continue with the overall guidance we shared in May. Let's take a look at our financial highlights. These results are on a constant currency basis. Overall revenue growth in the first quarter was again driven by our direct-to-consumer channels and international business, which beat our guidance. Overall retail grew 5%, with balanced growth in brick-and-mortar and digital channels. Total sales

The operating profit margin after adjustment increased 140 bp to 14. 8%. Replacing segment business performance with North America reduced sales in the first quarter of 4%. This is because the continuous momentum of retail was offset by the planned shrinking wholesale channel. The first quarter of the North American Retail Section increased by 1%, as expected, as expected, including the negative effect of about 120 bp due to the Easter vacation shifted in the fourth quarter. The sales of actual store channels increased by 3%by full price stores, but digital channels have decreased by 4%. Focusing on improving the orbit of the North American digital business, we will mainly improve location experience and improve the assortment of top main products. In the North American wholesale business, the sales were reduced by 13%as expected, which greatly reflects the sale of surplus products at of f-price channels and the shift of the pickup timing mentioned above. Except for the shift, the sales of full price decreased in the first half of the single digit range, following the spring trends until the sales time. The wholesale sale has increased slightly in accordance with recent trends due to the steady stock in the channel. The operating profit margin after adjusting the outlook for the future has increased 140 bp to 14. 8%. Replacing segment business performance with North America reduced sales in the first quarter of 4%. This is because the continuous momentum of retail was offset by the planned shrinking wholesale channel. The first quarter of the North American Retail Section increased by 1%, as expected, as expected, including the negative effect of about 120 bp due to the Easter vacation shifted in the fourth quarter. The sales of actual store channels increased by 3%by full price stores, but digital channels have decreased by 4%. Focusing on improving the orbit of the North American digital business, we will mainly improve location experience and improve the assortment of top main products. In the North American wholesale business, the sales were reduced by 13%as expected, which greatly reflects the sale of surplus products at of f-price channels and the shift of the pickup timing mentioned above. Except for the shift, the sales of full price decreased in the first half of the single digit range, following the spring trends until the sales time. The wholesale sale has increased slightly in accordance with recent trends due to the steady stock in the channel. The operating profit margin after the outlook adjustment has increased 140 bp to 14. 8%. Replacing segment business performance with North America reduced sales in the first quarter of 4%. This is because the continuous momentum of retail was offset by the planned shrinking wholesale channel. The first quarter of the North American Retail Section increased by 1%, as expected, as expected, including the negative effect of about 120 bp due to the Easter vacation shifted in the fourth quarter. The sales of actual store channels increased by 3%by full price stores, but digital channels have decreased by 4%. Focusing on improving the orbit of the North American digital business, we will mainly improve location experience and improve the assortment of top main products. In the North American wholesale business, the sales were reduced by 13%as expected, which greatly reflects the sale of surplus products at of f-price channels and the shift of the pickup timing mentioned above. Except for the shift, the sales of full price decreased in the first half of the single digit range, following the spring trends until the sales time. The wholesale sale has increased slightly in accordance with recent trends due to the steady stock in the channel. Future outlook

We continue to expect growth in our European wholesale channel to be in the low single digits for FY25, but below overall trend in Q3 due to the timing of planned shipments as mentioned above. We remain encouraged by growing consumer awareness of our brand in Europe and the strong execution of our team, especially as the dynamic business environment continues across Europe. With regards to Asia, we saw growth across all markets, with sales increasing 9%. The retail division also saw strong growth, both digital and brick-and-mortar, increasing 9% on top of last year's 13% increase. Sales in China grew in the low double digits, especially after a strong comparative reopening of over 50% last year. While our 618-day sales are significantly outperforming the market, we continue to experience a normalization of post-pandemic consumer trends, as reflected by the confirmation of our outlook for China's growth rate in the low teens this year. Sales in Japan, the region's largest market, increased to high single digits, supported by major marketing campaigns and a recovery in tourism spending, which returned to pre-flat levels in the quarter. Our balance sheet transition, strong balance sheet and cash flows remain key drivers supporting our strong foundation,

Our prospects include the growth potential of DTC and closing the demand, but still strictly strict North American Hall Sale Channel. The exchange rate is expected to have a negative effect of about 150 bp to sales growth, mainly at Asian exchange rates. Considering the structural headwind of Japanese yen in recent years, Japan will increase the selective price for this term. We expect that the first and third quarters will be less than the overall outlook, based on the scheduled time of wholesale, for this year's revenue level. The third quarter also has a unique factor of the year, the period of holiday sales from thanksgiving to Christmas, which is shorter than last year, and the potential effects related to the fluctuations in the US presidential election and consumer behavior. Operating margins are expected to continue to increase by about 100 to 120 Basis points from 13, 5 % to 13, 7 %. The basis, excluding the effects of foreign exchange fluctuations, can achieve a 15%margin target for this fiscal year in comparison with the Investor's Tax Standard period in FY2010. We expect gross profit margin to be led by advantageous indicators and expand 50 to 100 Basis points. < SPAN> Our prospects include continuing to strengthen DTC's growth and watching the North American Hall Sale Channel, which has improved, but still strict. The exchange rate is expected to have a negative effect of about 150 bp to sales growth, mainly at Asian exchange rates. Considering the structural headwind of Japanese yen in recent years, Japan will increase the selective price for this term. We expect that the first and third quarters will be less than the overall outlook, based on the scheduled time of wholesale, for this year's revenue level. The third quarter also has a unique factor of the year, the period of holiday sales from thanksgiving to Christmas, which is shorter than last year, and the potential effects related to the fluctuations in the US presidential election and consumer behavior. Operating margins are expected to continue to increase by about 100 to 120 Basis points from 13, 5 % to 13, 7 %. The basis, excluding the effects of foreign exchange fluctuations, can achieve a 15%margin target for this fiscal year in comparison with the Investor's Tax Standard period in FY2010. We expect gross profit margin to be led by advantageous indicators and expand 50 to 100 Basis points. Our prospects include the growth potential of DTC and closing the demand, but still strictly strict North American Hall Sale Channel. The exchange rate is expected to have a negative effect of about 150 bp to sales growth, mainly at Asian exchange rates. Considering the structural headwind of Japanese yen in recent years, Japan will increase the selective price for this term. We expect that the first and third quarters will be less than the overall outlook, based on the scheduled time of wholesale, for this year's revenue level. The third quarter also has a unique factor of the year, the period of holiday sales from thanksgiving to Christmas, which is shorter than last year, and the potential effects related to the fluctuations in the US presidential election and consumer behavior. Operating margins are expected to continue to increase by about 100 to 120 Basis points from 13, 5 % to 13, 7 %. The basis, excluding the effects of foreign exchange fluctuations, can achieve a 15%margin target for this fiscal year in comparison with the Investor's Tax Standard period in FY2010. We expect gross profit margin to be led by advantageous indicators and increase 50 to 100 Basis points.

Sales are expected to grow in the low to mid single digits in constant currencies, centered around 3% to 4%, driven by DTC channels. Wholesale is expected to improve sequentially from the first quarter as North American sales trends align more closely with retail trends. Digital trends in Europe are expected to be impacted by end-of-season sales shifts in the first quarter. Currency is expected to negatively impact sales by approximately 160 bps. We expect second quarter operating margin to expand by approximately 80-120 bps in constant currencies, with gross margin expansion of approximately 110-130 bps offsetting higher operating expenses due to the timing of major marketing campaigns this quarter, including the Summer Olympics and September fashion shows. We expect marketing investments to increase at a faster pace in the first half and decline in the second half. Excluding marketing, we continue to expect second quarter spending to be slightly levered, consistent with first quarter trends. In addition, foreign exchange is expected to negatively impact gross margin by approximately 40 basis points and operating margin by 50 basis points in the second quarter. Based on favorable tax credits realized in the first quarter, the company expects to achieve a favorable tax impact of approximately 40 basis points in the second quarter. Management: [The first question is from Michael Binetti of Evercore ISI.

Michael Binetti: Hey, guys, thanks for taking the questions. One question for Patrice, given the volatility in the market, especially this quarter with your peers reporting, why does your consumer appear to be holding up relatively better than the rest of the market and do you think these trends will continue? And the macro data for Europe, it all looks pretty cautious. I think the Olympics got a lot of attention, so can you tell us what the strongest and weakest trends are in D2C comps? How sustainable do you think the wholesale trends are in Europe? And do you think the wholesale trends are sustainable in Europe? Michael Binetti: Hey, guys, thanks for taking the questions. Given the volatility in the market, especially this quarter with your peers reporting, why does your consumer appear to be holding up relatively better than the rest of the market and do you think these trends will continue?

Patrice Louvet: Okay, good morning, Michael. Thank you for the double question. Let's start with the first part. I want to start by saying how exciting marketing activations are happening right now for Ralph Lauren. Just to name a few of the activities over the last few months: our April fashion show in New York, our presence at Milan Salone, Wimbledon, the Summer Olympics in Paris. Ralph Lauren is a powerful presence not just in fashion, but in culture. And consumers are responding all over the world. Our Net Promoter Score, as I reported in my prepared remarks, is at 400 basis points worldwide. Last quarter, online searches grew 25%, beating our competitors. And this was before the Olympics started. Of course, we're not immune to macroeconomic pressures on the consumer. And we're very aware of the concerns in the market this week. But in terms of fundamentals,

We have a diversified strategy that has been implemented for the past 5-7 years. We have a diversified strategy that has been implemented for the past 5-7 years, and we will continue to promote our desires and use multiple growth drivers to create lon g-term value. Justin, would you ask me about Europe as your baptism?

Justin Pichich: Great. In Europe, consumer demand has grown, and sales in the first quarter have gained strong. It grew in all markets except the UK, and DTC sales were also strong. In addition, promotion is still thriving in a wider area. But we did not participate in the promotion. In fact, we were promoting and were able to see the great quality of sales in the market. In terms of wholesale, the business has grown on the backdrop of powerful revival. In particular, the digital net play was very good, and the quarter was very strong. In addition, when I took a step back, there was a little tailwind from the tourism industry, but it is domestic demand that leads business in Europe. However, domestic demand in Europe is the driving force of business. As Patrice mentioned macros, we are not watching the UK, and we look at Southern Europe. We also know that the exchange rate is swinging to the dollar, and that there are some problems between the Middle East and the Red Sea. However, we continue to predict the growth of this area and are satisfied with the outlook.

Patrice Louve: In addition, I am really proud of the work that the European team is doing in an unstable situation, that is, how to show the brand. Recently, we have had the opportunity to see brands in Paris and European markets, but we are enhancing their presence. And in the relationship between stores, online, and all partners, the quality and touch point we have are really wonderful. So I am still cautious in the environment, but I am really excited about the work that our team is doing there.

Colinna Van del Ginst: Thank you. Please ask the next question.

Handling: Thank you. The next question is from Laurent Vasilesk of BNP Pariba (OTC: BNPQY). < SPAN> We have a diversified strategy that has been implemented for the past 5-7 years. We have a diversified strategy that has been implemented for the past 5-7 years, and we will continue to promote our desires and use multiple growth drivers to create lon g-term value. Justin, would you ask me about Europe as your baptism?

Justin Pichich: Great. In Europe, consumer demand has grown, and sales in the first quarter have gained strong. It grew in all markets except the UK, and DTC sales were also strong. In addition, promotion is still thriving in a wider area. But we did not participate in the promotion. In fact, we were promoting and were able to see the great quality of sales in the market. In terms of wholesale, the business has grown on the backdrop of powerful revival. In particular, the digital net play was very good, and the quarter was very strong. In addition, when I took a step back, there was a little tailwind from the tourism industry, but it is domestic demand that leads business in Europe. However, domestic demand in Europe is the driving force of business. As Patrice mentioned macros, we are not watching the UK, and we look at Southern Europe. We also know that the exchange rate is swinging to the dollar, and that there are some problems between the Middle East and the Red Sea. However, we continue to predict the growth of this area and are satisfied with the outlook.

Patrice Louve: In addition, I am really proud of the work that the European team is doing in an unstable situation, that is, how to show the brand. Recently, we have had the opportunity to see brands in Paris and European markets, but we are enhancing their presence. And in the relationship between stores, online, and all partners, the quality and touch point we have are really wonderful. So I am still cautious in the environment, but I am really excited about the work that our team is doing there.

The store also features Ralph's first coffee shop in the Midwest. With over 30 coffee shops and five restaurants, the company now engages with over 3 million consumers annually through its hospitality business, attracting a new generation of consumers to Ralph's iconic brand around the world. By region, Asia led growth, again with high single-digit growth this quarter, in line with our outlook. This was followed by Europe, which again exceeded expectations, and North America, which was on track. Momentum in China continued, with sales growing in the low double digits this quarter, amid an extremely favorable comparison, up more than 50% year-over-year. While closely monitoring macroeconomic trends and consumer behavior, our team continues to successfully drive consumer purchasing power within China. In addition, we continue to be disciplined in our ecosystem expansion, with a focus on six major city clusters. Finally, in terms of what drives us, our business continues to be driven by five key drivers: As we incorporate citizenship and sustainability into everything we do, we had some great moments this quarter. First, our collaboration with Navajo designer Naiomi Glass won the Fast Company Innovation by Design award.

Handling: Thank you. The next question is from Laurent Vasilesk of BNP Pariba (OTC: BNPQY). We have a diversified strategy that has been implemented for the past 5-7 years. We have a diversified strategy that has been implemented for the past 5-7 years, and we will continue to promote our desires and use multiple growth drivers to create lon g-term value. Justin, would you ask me about Europe as your baptism?

Justin Pichich: Great. In Europe, consumer demand has grown, and sales in the first quarter have gained strong. It grew in all markets except the UK, and DTC sales were also strong. In addition, promotion is still thriving in a wider area. But we did not participate in the promotion. In fact, we were promoting and were able to see the great quality of sales in the market. In terms of wholesale, the business has grown on the backdrop of powerful revival. In particular, the digital net play was very good, and the quarter was very strong. In addition, when I took a step back, there was a little tailwind from the tourism industry, but it is domestic demand that leads business in Europe. However, domestic demand in Europe is the driving force of business. As Patrice mentioned macros, we are not watching the UK, and we look at Southern Europe. We also know that the exchange rate is swinging to the dollar, and that there are some problems between the Middle East and the Red Sea. However, we continue to predict the growth of this area and are satisfied with the outlook.

Patrice Louve: In addition, I am really proud of the work that the European team is doing in an unstable situation, that is, how to show the brand. Recently, we have had the opportunity to see brands in Paris and European markets, but we are enhancing their presence. And in the relationship between stores, online, and all partners, the quality and touch point we have are really wonderful. So I am still cautious in the environment, but I am really excited about the work that our team is doing there.

Colinna Van del Ginst: Thank you. Please ask the next question.

Handling: Thank you. The next question is from Laurent Vasilesk of BNP Pariba (OTC: BNPQY).

Laurent Vasilescu: Good morning. Thank you for taking my question. Justin, it's great that you're maintaining your full-year outlook, especially in this volatile environment. Q1 is coming up, why are you maintaining your full-year outlook? Or are you confident that you can achieve your full-year plan, even if the consumer environment becomes more difficult? And from a model perspective, how should we think about North American Wholesale, on an annualized basis, for the second quarter and the full year? Thank you. Laurent Vasilescu: Good morning. Thank you for taking my question. Justin, it's great that you're maintaining your full-year outlook, especially in this volatile environment. Q1 is coming up, why are you maintaining your full-year outlook? Or are you confident that you can achieve your full-year plan, even if the consumer environment becomes more difficult? And from a model perspective, how should we think about North American Wholesale, on an annualized basis, for the second quarter and the full year? Thank you. Thank you for taking my question. Justin, thank you.

Justin Pichich: Thank you, Laurent. First of all, I am happy to be able to participate in today's live call with Patris and everyone. I was blessed with the opportunity to meet many people in my previous job. I am looking forward to being able to be with you in the future. Then, Laurent, your question. Regarding the ful l-year guidance, we have maintained both to p-line and bottom line in accordance with our three years of commitment and in our general approach to guidance in this period before the important holiday season. I am happy. This term was assumed that recent customer trends and macro trends would be maintained. And in today's report, I support that opinion. It also includes a global macro environment and consumer trends, the softness of wholesale channels in North America, and the vigilance of the gentle pressure from the commodity cost in the latter half of the year. However, by taking a step back, we have been building a tough strategy for several years. And Ralph created the ultimate timeless brand. And we are facing a potentially harsh consumer environment. We will continue to support our brands that are truly powerful, brought by consumers who know and trust this clear value proposal. We will support the product. Consumers trust their quality and reliability. We will support differentiation between growth drivers and flexible supply chains. We support inventory in an advantageous position and emphasize productivity. And we recognize that a strong balance sheet based on all of these is an important differentiation factor in the industry. So, this year and and ahead, we feel we are in a good position, but in a very dynamic environment, we will continue our business with agility and discipline. Regarding wholesale businesses, the seasonal sales trends of wholesalers in North America have been demonstrated in recent seasons, and I am reassured. Nevertheless, our prospects are still cautious, and demand in channels remains relatively soft and modest than last year. The first quarter, especially the sales of the North American hall sale, was squeezed by several factors. First, in the first quarter, there were several full price timing, which was a pressure factor. There was also a significant price reduction of pure stock. First, I will explain these two factors,

The basic ful l-price sales in the current quarter almost matched the tendency of seasonal spring sales, which was in the first half of this singl e-digit range. The first quarter was expected to be the toughest quarter for Hall Sale and North America in North America. In the future, in the 25th fiscal year, we expect that the sales in the first half of the single digit will be closer to the current sales and stabilize. This will start in the second quarter. In such a channel, the reserves are kept in a really clean state and keeping a good position. We want to be able to follow it anytime, especially in core businesses. And in all fields that seem to have traction, such as the top door, digital, the first quarter, and in all fields that seem to have traction, such as hig h-level businesses. We will continue to focus on promoting growth.

Colinna Van del Gainst: Okay, thank you. Next question, Angela?

Operator: Thank you. The next question is Matthew Boss of J. P. Morgan.

Matthew Boss: Thank you. It was a wonderful quarter.

Patrice Louve: Thank you, Matt.

The store also features Ralph's first coffee shop in the Midwest. With over 30 coffee shops and five restaurants, the company now engages with over 3 million consumers annually through its hospitality business, attracting a new generation of consumers to Ralph's iconic brand around the world. By region, Asia led growth, again with high single-digit growth this quarter, in line with our outlook. This was followed by Europe, which again exceeded expectations, and North America, which was on track. Momentum in China continued, with sales growing in the low double digits this quarter, amid an extremely favorable comparison, up more than 50% year-over-year. While closely monitoring macroeconomic trends and consumer behavior, our team continues to successfully drive consumer purchasing power within China. In addition, we continue to be disciplined in our ecosystem expansion, with a focus on six major city clusters. Finally, in terms of what drives us, our business continues to be driven by five key drivers: As we incorporate citizenship and sustainability into everything we do, we had some great moments this quarter. First, our collaboration with Navajo designer Naiomi Glass won the Fast Company Innovation by Design award.

Colinna Van del Gainst: Okay, thank you. Next question, Angela?

Operator: Thank you. The next question is Matthew Boss of J. P. Morgan.

Matthew Boss: Thank you. It was a wonderful quarter.

Patrice Louve: Thank you, Matt.

Matthew Boss (hereinafter-): Now, we have achieved international outpoons in both European and Asian regions, but found by the international brand lift strategy, or by the second quarter. Did the dynamics directly sales have changed? Then, please tell us about the factors of the buil t-in leverage of SG & Amp; AMP. A, and still SG & amp; amp? A; The basic full price sales in the quarterly focused on the seasonal spring sales trends, which is the percentage of this singl e-digit range. The first quarter was expected to be the toughest quarter for Hall Sale and North America in North America. In the future, in the 25th fiscal year, we expect that the sales in the first half of the single digit will be closer to the current sales and stabilize. This will start in the second quarter. In such a channel, the reserves are kept in a really clean state and keeping a good position. We want to be able to follow it anytime, especially in core businesses, if there is demand. And in all fields that seem to have traction, such as the top door, digital, the first quarter, and in all fields that seem to have traction, such as hig h-level businesses. We will continue to focus on promoting growth.

Colinna Van del Gainst: Okay, thank you. Next question, Angela?

Operator: Thank you. The next question is Matthew Boss of J. P. Morgan.

Matthew Boss: Thank you. It was a wonderful quarter.

Patrice Louve: Thank you, Matt.

Matthew Boss (hereinafter-): Now, we have achieved international outpoons in both European and Asian regions, but found by the international brand lift strategy, or by the second quarter. Did the dynamics directly sales have changed? Then, please tell us about the factors of the buil t-in leverage of SG & Amp; AMP. A, and still sg & amp; amp? A;

Patrice Louvet: Thank you for your question, Matt. I don't know if the baseball analogy really works for our elevate strategy. So we certainly see that where we are internationally is where we elevate our brand the most. If you go to Shanghai, if you go to London, if you go to Munich, you see how elevated our brand is. And obviously, that translates to strong performance. We're going to continue to steadily elevate our story, our product and our consumer experience through online and digital. I don't think that's something that's ever going to stop for the company. And I think if you look at the history that Ralph has built over the last 57 years, that's the line that's driven all of the business and the focus. So I'm excited to continue to drive that. We continue to drive AUR, even in markets like China and Japan, for example, where we recorded the highest AUR in the world. And we're really excited to see that momentum. Japan doing well last quarter, China continuing to double in a complex environment, Korea doing well, Australia doing well, and key European markets doing well as we just heard from Justin. The lifting journey continues