By Uday Sampath Kumar
(Reuters) -Ralph Lauren Corp raised its annual revenue forecast on Thursday and became the latest luxury goods retailer to top market estimates for holiday-quarter revenue as demand for high-end apparel soars.
Shares in the New-York based designer, which also announced a new $1.5 billion stock buyback program, rose 4% in morning trading.
Global luxury groups, including Versace owner Capri Holdings (NYSE:CPRI), LVMH and Prada (OTC:PRDSY), have reported strong results as customers coming out from lockdowns splurge on luxury fashion, propelling sales to above pre-pandemic levels.
Capri on Wednesday raised its annual sales outlook and said it would further increase prices across its brands, including Michael Kors and Jimmy Choo, to take advantage of soaring demand.
The surge in luxury demand will continue if international travel can return to pre-pandemic levels over the next 12 to 24 months, Zachary Warring, equity analyst at CFRA Research said.
Ralph Lauren (NYSE:RL) said it expects current-quarter revenue to rise by about 17% to 18% on constant currency basis, helped by higher prices, which the company said will also offset higher freight and raw material costs.
Chief Executive Officer Patrice Louvet said demand was strong to support "many more quarters" of price hikes.
"Our company is fundamentally healthier than it was 2 years ago. We're bringing in a younger, higher-value, less price-sensitive consumer," Louvet said on a call with analysts.
The company said it expects constant currency revenue for fiscal year 2022 to rise 39% to 41%, compared with a 34% to 36% increase it forecast earlier.
Ralph Lauren's net revenue rose 27% to $1.82 billion in the third quarter ended Dec. 25. Analysts on average had expected revenue of $1.64 billion, according to Refinitiv IBES data.
Revenue rose 30% in North America and 47% in Europe.
Excluding certain items, Ralph Lauren reported a profit of $2.94 per share, beating estimates of $2.17.