RL · 10-Q · 2026Q3 · Full report

Operating Income and Margins

RALPH LAUREN CORP · 2026-11-05 · Importance 58 · Surprise 56 · In source text

Operating income increased $118.0 million, or 48.0%, to $363.7 million in the three months ended September 26, 2026, and operating margin rose 440 basis points to 16.6%. Segment operating income was $186.1 million in North America, $204.5 million in Europe, and $156.6 million in Asia; Asia’s operating income increased $45.4 million and its margin expanded 240 basis points to 27.4%. North America margin improved 160 basis points to 21.0%, while Europe remained at 29.4%, as gross-margin gains were offset by higher SG&A as a percentage of revenue. Corporate expenses decreased $75.0 million to $155.4 million, primarily reflecting the $82.3 million tariff-refund adjustment and lower compensation expenses, partly offset by $10.9 million of higher consulting and professional fees.

Key facts

• Quarterly operating income increased $118.0 million, or 48.0%, to $363.7 million, including $2.3 million of favorable foreign currency effects. source
• Six-month operating income increased $186.8 million, or 36.0%, to $706.1 million, with $6.8 million of favorable foreign currency effects. source
• Quarterly operating margin was 16.6%, up 440 basis points, primarily from higher gross margin, partly offset by higher SG&A as a percentage of revenue. source
• Operating margin was 17.0% for the six months ended September 26, 2026, up 310 basis points; the increase primarily reflected higher gross margin, partly offset by higher SG&A as a percentage of revenue. source
• North America operating margin improved 160 basis points, as a 270-basis-point gross-margin increase was partly offset by a 110-basis-point increase in SG&A as a percentage of revenue. source
• Europe operating margin was unchanged; a 280-basis-point gross-margin increase was offset by higher SG&A as a percentage of revenue, and the margin included 80 basis points of favorable foreign currency effects. source
• Asia operating margin improved 240 basis points, primarily from a 200-basis-point reduction in SG&A as a percentage of revenue and a 50-basis-point gross-margin increase, including 10 basis points of unfavorable foreign currency effects. source
• North America operating margin improved 200 basis points, as gross margin increased 210 basis points and SG&A expense as a percentage of revenue increased 10 basis points, including higher marketing expenses. source

Impact estimates