Ralph Lauren is doubling down on handbags, and early results suggest the strategy is working.
In the company’s fiscal first-quarter earnings report, released on Thursday, handbags were named among the brand’s top-performing categories, growing at a strong double-digit pace and outpacing overall company growth. CEO Patrice Louvet called handbags a key accelerator for the business, alongside women’s apparel and outerwear.
“Our high-potential categories, including women’s apparel, outerwear and handbags, continue to be accelerators for our business,” said Louvet on the call. “We expect that to continue.”
The company launched its new foundational handbag line, Polo Play, earlier this spring, with what Louvet described as a “very strong initial response.” The line complements Polo ID, while the higher-tier Ralph bag under the Collection label is also gaining traction. “We’re still in the early stages of development,” he said, noting strengthened merchandising and design teams as well as a growing focus on consumer storytelling.
Louvet emphasized that handbags are helping attract new customers, particularly women. “What’s resonating with consumers is that these propositions complement the overall lifestyle for the women we’re engaging with,” he said. “The value proposition is really well positioned within the current market.”
For the quarter ending June 29, Ralph Lauren’s revenue rose 11% year-over-year in constant currency, totaling $1.6 billion, above the company’s high single-digit forecast. Operating margin expanded to 16.6%, up 230 basis points year-over-year, aided by a 14% increase in average unit retail. Strong full-price performance and reduced discounting helped drive profitability across all three major regions.
Asia led the growth, with revenue up 19%, while Europe climbed 10% and North America rose 8%. The company added 1.4 million new customers globally, with growth skewing toward digital channels and younger demographics.
Ralph Lauren’s handbags range from around $200-$3,600, spanning entry to luxury tiers. According to FTC findings from April 2024, when the agency sued to block the merger between Tapestry and Capri, their Coach, Kate Spade and Michael Kors brands owned 53% of the accessible luxury handbag market — Coach bags run for $100-$1,000. In the American handbag category, Ralph Lauren’s increased focus on leather goods represents a bold effort to carve out share. Analysts say the timing could work in its favor.
“I think it makes sense for Ralph Lauren to try and build up its leather goods business,” said Luca Solca, senior luxury analyst at investment firm Bernstein. “European mega-brands have increased prices well above average in the past few years, creating a significant blank space for brands wanting to sell handbags at less than $2,000. Not everyone can make the most of this, but Ralph Lauren could have the brand equity to build a stronger position.”
Solca added that rising import duties are likely to make European products even more expensive, further opening the door for brands like Ralph Lauren. Ralph Lauren primarily produces its handbags priced $200–$700 in Asia, particularly China, Vietnam and Cambodia, making the company vulnerable to U.S. tariffs on Asian imports, as noted in the earnings call. Its higher-end pieces are made in Italy and Spain. Other American players producing in Asia, like Capri-owned Michael Kors, face similar cost pressures.
“The biggest challenge for Ralph Lauren is likely to be soft demand for handbags, particularly in the wholesale channel,” said Beth Goldstein, executive director of footwear and accessories for Circana and board member of the Accessories Council. “According to Circana’s Retail Tracking Service, unit sales in the first five months of 2025 declined 1% year-over-year, on top of a 12% drop from 2023 to 2024, with average prices also falling and total dollar sales down 8%. That said, brands like Ralph Lauren, Coach and select contemporary players offering unique, accessibly priced items are finding success as retailers seek to fill gaps left by struggling designer labels.”
The company raised its full-year revenue guidance, now expecting low- to mid-single-digit growth, citing the strong first-quarter performance. However, it remained cautious on the second half of the year, noting the potential impact of tariffs, inflation and broader macroeconomic uncertainty.
To mitigate tariff-related risks, Ralph Lauren pulled forward strategic inventory receipts in the first quarter of 2026, contributing to an 18% increase in total inventory. The company expects inventory levels to normalize in line with sales growth by year-end.
Despite those uncertainties, Louvet said Ralph Lauren remains “on offense,” with handbags among the brand’s biggest long-term opportunities. More details on category expansion and brand strategy are expected to be released during the company’s Investor Day in September.
“We’re just getting started,” said Louvet. “There’s still a lot of white space to cover.”
