Results cleared both the company’s own bar and published EPS expectations. Adjusted diluted EPS was $4.59 versus $3.77 a year ago and a published consensus near $4.29, while constant-currency revenue rose 13.4%—well above the prior Q1 outlook for mid- to high-single-digit growth.
| Metric | Q1 FY27 | Q1 FY26 / prior expectation |
|---|---|---|
| Net revenue | $1,959.8 million | $1,719.1 million; +14.0% reported, +13.4% constant currency (Net revenues; Constant Currency Financial Measures) |
| Adjusted diluted EPS | $4.59 | $3.77 prior year; published consensus ~ $4.29 |
| Adjusted operating margin | 18.7% reported; 18.5% constant currency | 17.0% prior year; prior guidance implied roughly 17.8%-18.2% (Reconciliation of Non-U.S. GAAP Financial Measures) |
| Gross margin | 73.7% reported; 73.6% constant currency | 72.3% prior year (Gross Profit) |
| Global DTC comparable sales | +12% constant currency | Driven by +8% digital, +10% brick-and-mortar in North America; +23% Asia (Comparable Store Sales Data) |
The quality of demand was better than a headline revenue beat. Direct-to-consumer comparable sales increased 12% in constant currency, AUR rose 15% with lower-than-planned promotions, and gross margin expanded 140 basis points despite tariff and product-cost pressure (Comparable Store Sales Data; Gross Profit). Asia was the standout at +25% constant currency, including China above 40%, while North America grew 13% and Europe was more subdued at +5% constant currency (Segment results; Constant Currency Financial Measures).
The full-year upgrade is the clearest expectation reset. Fiscal 2027 constant-currency revenue growth is now centered at 5%-6%, up from the prior 4%-5% outlook, while operating-margin expansion is now expected at 60-80 basis points versus the prior 40-60 basis-point framework. Second-quarter guidance of 5%-6% constant-currency revenue growth and 80-100 basis points of margin expansion also keeps momentum above the original first-quarter setup (Company outlook). The prior full-year framework was mid-single-digit growth centered around 4%-5% with 40-60 basis points of margin expansion.
There is one quality caveat, but it does not overturn the read. North American wholesale growth included roughly 15 percentage points from resumed shipments to a luxury account and shifted shipments, while Europe wholesale benefited from earlier shipment timing (North America Revenue; Europe Revenue). That makes some of the quarterly outperformance timing-related, but the broader DTC, pricing, Asia, and margin trends were strong enough to produce a genuine positive surprise rather than a purely shipment-driven quarter.
Cash deployment was aggressive but financially manageable. Operating cash flow rose to $339.3 million from $176.1 million, while the company repurchased $325.1 million of stock and paid $54.8 million in dividends (Cash Flow statement). Cash and short-term investments ended at $1.94 billion against $1.24 billion of long-term debt, with inventory down 5% reported year over year to $1.16 billion (Balance Sheets; Cash Flow statement).
Read the original 8-K on SEC EDGAR ↗