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Ralph Lauren (NYSE:RL) wrapped up fiscal 2025 on a high note, outpacing expectations with 8% revenue growth in Q4 and a 13% increase in direct-to-consumer comparable sales. Adjusted earnings rose to $2.27 per share, marking strong execution amid global uncertainty. With over $2 billion in cash on hand and inventories in check, RL's board approved a 10% dividend increase and expanded its share repurchase authorization by $1.5 billionfurther cementing confidence in the brand's financial foundation.
Looking ahead, RL expects low-single-digit revenue growth and modest operating margin expansion for Fiscal 2026. Management remains cautiously optimistic, citing a resilient consumer ecosystem across key markets, especially in Asia and Europe. A focus on higher-margin categories like outerwear, handbags, and premium collections is expected to sustain pricing power and offset inflationary and tariff pressures.
From a long-term lens, RL's fundamentals appear solid. As seen in the chart, free cash flow per sharewhile fluctuatinghas shown a clear upward trajectory, recently reaching record highs. Dividends, despite a dip during the 2020 COVID period, have been consistently paid and are now rising again. With free cash flow outpacing dividend payouts most of the time, RL seems well-positioned to keep rewarding shareholders while navigating macro headwinds.
This article first appeared on GuruFocus.