Ralph Lauren (NYSE:RL) concluded its fiscal year with results that surpassed expectations, delivering 10% fourth-quarter revenue growth and a 24% increase in adjusted operating profits for the year. Strong performances across all regions, especially in Europe and Asia, underscored the company’s global and digital momentum, with China alone growing over 20% year-over-year.

Direct-to-consumer (DTC) channels remained a growth engine, with 13% comparable sales growth and a record 5.9 million new customers added across digital and store platforms. The company also reported $1 billion in free cash flow, supporting significant shareholder returns and continued reinvestment in strategic priorities.

Technology played a foundational role in Ralph Lauren’s execution and future positioning.

Leadership detailed ongoing investments in AI, data analytics, and predictive buying tools that are transforming demand forecasting, pricing strategies, and inventory planning. “We have fundamentally transformed our business and built a more agile organization,” said CEO Patrice Louvet, citing the company’s ability to flex expenses, diversify supply, and scale tech initiatives.

The company is scaling a multi-year digital transformation program while embedding AI and advanced analytics across its global omnichannel network. These efforts are key enablers of Ralph Lauren’s Key City Ecosystem strategy, a global initiative that merges digital platforms, physical stores, and localized experiences into a seamless, data-informed retail model.

Why It Matters: For CIOs and technology leaders, Ralph Lauren’s recent performance illustrates how AI, data, and digital infrastructure can be leveraged to navigate complexity and scale premium retail experiences. The brand is moving beyond traditional fashion operations, using intelligent systems for predictive buying, pricing agility, and real-time customer engagement. With a strong balance sheet and integrated tech strategy, Ralph Lauren presents a scalable blueprint for digital innovation in global retail.

• AI-Powered Predictive Buying Enhances Inventory Efficiency: Ralph Lauren now uses predictive buying across 25% of its international DTC business, allowing for more accurate inventory decisions and improved responsiveness to consumer demand. “These tools allow us to drive greater inventory efficiencies and better serve consumer demand,” Louvet stated. This use of AI and real-time data has helped improve product availability, minimize markdowns, and support gross margin expansion.

• Enterprise-Wide Digital Transformation Program Underway: The company continues to invest in a multi-year transformation initiative launched in FY2024 to modernize core tech platforms and retail systems. “This includes ongoing investments in our key city ecosystems, technology and AI, and our multi-year next generation transformation project,” said CFO Justin Picicci. The program aims to support long-term DTC growth and greater automation across back-end systems and front-end engagement layers.

• Data and AI Inform Pricing Amid Volatile Cost Pressures: Facing inflation and tariff uncertainty, Ralph Lauren is using AI-driven analytics to optimize pricing, streamline costs, and reduce discounts. “We have a proven toolkit to manage cost inflation headwinds,” Picicci noted. “One of those tools is price, but there are other tools… including greater cost efficiencies and leveraging AI analytics.” Selective pricing actions are planned for Fall 2025 in North America and Japan, informed by real-time data and market dynamics.

• Digital Ecosystem Supports Global DTC Momentum: Ralph Lauren’s digital ecosystem, encompassing owned e-commerce platforms and wholesale digital accounts, grew in the high teens, led by Europe. “Our digital ecosystem continues to drive momentum, with strong new customer acquisition and high engagement from younger cohorts,” Louvet said. The company gained 5.9 million new DTC customers in FY25, driven by digital-first activations and AI-supported segmentation.

• Tech-Enabled Key City Ecosystems Fuel Global Growth: The Key City Ecosystem model, an integrated mix of flagship stores, e-commerce, and localized marketing, continues to be enhanced through digital tools and analytics. “We are expanding our presence in key markets through this model, allowing consumers to engage and transact with Ralph Lauren like never before,” said Louvet. Store openings in Shanghai, Beijing, and San Francisco were supported by location intelligence and real estate analytics, including the strategic acquisition of its SoHo flagship, which Picicci described as “a smart investment to future-proof our business in a critical market.”

Go Deeper -> Ralph Lauren Quarterly Earnings – MarketBeat