Ralph Lauren (NYSE:RL) stock dropped 4% Tuesday morning after the luxury brand unveiled its refreshed strategic growth plan, “Next Great Chapter: Drive,” along with a long-term financial outlook during its investor day in New York City.
The company outlined a three-year financial roadmap, projecting revenue growth in the mid-single digits compounded annually in constant currency through fiscal 2028. Operating margins are expected to improve by roughly 100 to 150 basis points over the same period, fueled by gross margin expansion and operating expense efficiency, while continuing to invest in key strategic priorities.
Despite these forward-looking targets, investors reacted cautiously, sending shares lower. The company also reaffirmed its fiscal 2026 guidance shared during its August 7 earnings call.
Ralph Lauren emphasized three core strategic growth initiatives: elevating its global lifestyle brand positioning, driving performance in core products while expanding into under-penetrated categories, and scaling its ecosystem strategy across major cities worldwide.
The company further announced plans to return at least $2 billion in excess free cash flow to shareholders through fiscal 2028 via dividends and share repurchases. Earlier this fiscal year, the board increased the quarterly cash dividend by roughly 10% to $0.9125 per share.
Capital expenditures are projected to remain around 4% to 5% of annual revenue through fiscal 2028, according to the company.
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