(Bloomberg) -- Ralph Lauren Corp. raised its outlook for the year, citing strong sales in Europe and Asia and expectations for a solid holiday shopping season.
The apparel retailer is forecasting annual revenue to increase between 3% to 4%. That’s above analysts’ estimates and the company’s previous forecast of an increase between 2% to 3%, excluding currency fluctuations.
The company’s shares rose as much as 14% on Thursday, the biggest intraday rise since February. Shares have risen 44% this year through Wednesday trading to a record high, outpacing a 24% increase in the S&P 500.
Ralph Lauren reported strong revenue growth in Asia in the most recent quarter, with sales in China up by what it said was a low-teen percentage increase.
China has been a source of weakness for other high-end apparel and accessory brands in recent quarters, as consumers in the country pull back on spending. For Ralph Lauren, though, the company’s growth this quarter was led by strong China performance. Revenue is still increasing in part because it has more room to grow: it only generates around 8% of sales in China versus more than 20% at other premium global brands.
The company plans to continue to expand in China and is building on solid sales growth in the US and Europe. Ralph Lauren executives have been successful during the last several years raising the cachet of the brand, which has allowed the company to charge more for some products, sell more expensive items and cut back on discounts – steps that have boosted profitability.
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