Ralph Lauren raises revenue outlook, warns on costs

Unlike its European luxury peers Ralph Lauren sources the vast majority of its offerings from outside the US  making it more susceptible to shipping delays.

Ralph Lauren has said it expects to face higher shipping and commodity costs in the next few months as the high-end clothing maker is spending heavily to ensure stores are stocked with its product in the run-up to Christmas. during the holiday season.

The company's shares fell more than 6% even after it raised its full-year revenue forecast.

Unlike its European luxury peers, which manufacture the bulk of their products in their home market, Ralph Lauren sources the vast majority of its offerings from outside the US, with 40% manufactured in China and Vietnam alone, making the company more susceptible to shipping delays and factory closures.

Those supply chain disruptions have especially hobbled the clothing industry, with apparel having the highest online out-of-stock levels among US retail sectors.

However, Ralph Lauren said it was confident it would have enough stock to meet near-term demand, in part because it is spending heavily to ship products by air.

"While we expect continued variability of inventory flows, from quarter-to-quarter, we believe our inventories are well-positioned," it said.

The retailer said it expects constant currency fiscal 2022 revenue to rise 34% to 36%, compared with a prior forecast of a 25% to 30% increase.

• Reuters