RL · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

RALPH LAUREN CORP · 2026-11-05 · Importance 57 · Surprise 76 · No source text

Gross profit increased 19.1% to $1.628 billion in the three months ended September 26, 2026, and gross margin expanded 620 basis points to 74.2% from 68.0%. Approximately half of the margin increase, including about 30 basis points of favorable foreign currency effects, came from $82.3 million of IEEPA tariff refunds recognized in cost of goods sold. The remaining improvement was primarily attributable to AUR growth, favorable geographic mix, and lower product costs. The company also recorded $33.2 million of charitable donations funded from a portion of the tariff refunds, within restructuring and other charges.

Key facts

• Six-month gross profit increased $463.4 million, or 17.8%, to $3.072 billion and included $8.5 million of favorable foreign currency effects. source
• Quarterly gross profit increased $261.5 million, or 19.1%, to $1.628 billion; gross margin rose from 68.0% to 74.2%. source
• Three-month gross margin rose 620 basis points to 74.2%; approximately half of the increase was due to IEEPA tariff refunds, with the remainder primarily from AUR growth, favorable geographic mix, and lower product costs. source
• Six-month gross margin rose 410 basis points to 74.0%; approximately half of the increase was due to IEEPA tariff refunds, with the remainder primarily from AUR growth, favorable channel and geographic mix shifts, and lower product costs. source
• Gross margin increased to 74.0% for the six months ended September 26, 2026 from 69.9% in the prior-year period, up 410 basis points. source
• The 620-basis-point quarterly gross-margin increase included approximately 30 basis points of favorable foreign currency effects. source

Impact estimates