Ralph Lauren tops quarterly sales estimate on strong demand

Ralph Lauren topped Wall Street expectations for revenue on Thursday in its 12th straight quarterly beat, powered by steady demand from wealthier U.S. shoppers for its expensive sweaters and shirts coupled with a strong rebound in China.

Shares of the company jumped about 6% in premarket trading.

Despite economic uncertainties, wealthy shoppers in the U.S. went on a luxury spending spree over the holiday season, propping up the luxury industry with solid sales reports from LVMH and Cartier-owner Richemont in recent weeks.

While several brands have seen persistent weakness in their North American wholesale business due to cautious ordering from retailers, some companies like Ralph Lauren have doubled down on their direct-to-consumer business to offset the pressure.

Ralph Lauren also saw a strong recovery in China, with sales surging more than 30% in the holiday quarter, building on the 20% increase seen in the prior quarter.

Net revenue climbed to $1.93 billion in the fiscal third quarter, from $1.83 billion a year earlier. Analysts on average had expected revenue of $1.87 billion, LSEG data showed.

The company also lifted its profit margin outlook and now expects its gross margin to increase by roughly 140 to 180 basis points for the full year, in constant currency, compared to 120 to 170 basis points expected previously.