RL · 10-Q · 2026Q3 · Full report

Trade Policy and Tariffs

RALPH LAUREN CORP · 2026-11-05 · Importance 47 · Surprise 60 · In source text

In February 2026, the U.S. Supreme Court invalidated tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA), and in March 2026 the U.S. Court of International Trade directed U.S. Customs and Border Protection to refund previously collected IEEPA tariffs. Ralph Lauren recognized an $82.3 million cost-of-goods-sold benefit in the three months ended September 26, 2026 from realizing those refunds; it used $33.2 million of the refunds for charitable donations during the second quarter. After the court decision, the U.S. imposed new tariffs under other trade authorities, and the company says future trade-policy actions remain uncertain and could raise product costs and inflation, disrupt supply chains, slow economic growth, and increase financial-market and foreign-exchange volatility. The company has diversified its supply chain geographically and cites supplier negotiations, country-of-origin flexibility, pricing actions, and inventory management as mitigation measures, while warning that significant tariff increases or other trade restrictions could harm profitability.

Key facts

• In February 2026, the U.S. Supreme Court invalidated tariffs previously imposed under IEEPA. source
• In March 2026, the U.S. Court of International Trade directed U.S. Customs and Border Protection to refund previously collected IEEPA tariffs. source
• The U.S. imposed new tariffs under other trade authorities following the Supreme Court's February 2026 decision. source
• Approximately half of the 410-basis-point gross-margin increase, including approximately 20 basis points from favorable foreign currency effects, came from IEEPA tariff refunds received during the second quarter; the remainder primarily reflected AUR growth, favorable channel and geographic mix, and lower product costs. source
• The company recognized an $82.3 million cost-of-goods-sold benefit during the three months ended September 26, 2026 from realization of previously paid IEEPA tariff refunds. source
• Ralph Lauren recorded $33.2 million of other charges for charitable donations during the six months ended September 26, 2026, funded by a portion of second-quarter IEEPA tariff refunds. source
• The company used $33.2 million of the tariff refunds for charitable donations during the second quarter. source
• The company said tariff-related costs, including uncertainty about tariffs imposed after the IEEPA ruling and potential retaliation, could affect product costs, financial markets, exchange rates, and inflation, and identified mitigating sourcing strategies as a factor. source

Impact estimates