Hi. Good morning, everyone. Welcome. Thank you. Welcome to Ralph Lauren's 2022 Investor Day. I'm Corinna Van der Ghinst, Head of Investor Relations. It's wonderful to see you all here in person today, and also online on our first ever video stream. We're gonna kick things off in a moment with a quick video and turn it over to Patrice. Before we do that, I wanna direct your attention to some disclosures up on the screen here. The following presentation includes forward-looking statements that are based on information currently available to Ralph Lauren, and is subject to risks and uncertainties that could cause actual results to differ materially from the information presented today. In addition, the presentation will reference certain non-GAAP financial measures. Please see our investor relations website for a full reconciliation of GAAP to non-GAAP financial measures.
I hope you got that all down, there will be a quiz at the end. Without further ado, let's get started, and I will rejoin you all at the end for Q&A. Thanks.
Our company is built not on what we did yesterday, or even today, but what we dream of for tomorrow.
Can you see the sky cascading? The colors are infinite. Oh. Feel it now. A new sun risen, rising within me. Oh. We're flying higher than we've ever been. We're flying high. Oh. Oh. Oh. It's a good day for dreaming. There's a hope, there's a spark, there's a fire. There's a light in the dark, burning brighter. Oh. It's a good day for dreaming. Oh. Oh. Oh. Oh. It's a good day for dreaming.
Good morning. Welcome. Did you feel that energy? The brand heat, the incredible range of products, the elevation? That's what we've been building over the past four years since we last met here. Now, four years ago, there were questions about our company. There were questions about our ability to appeal to the next generation, our brand relevance, our path forward. Today is very different. Today, our brand is vibrant, our brand is elevated, and our brand is desired. There's a lot of evidence to support this, and we're gonna spend the next few hours sharing it with you. There's one data point I'd like to start with. 20 million. We added 20 million new consumers just to our DTC channels over the past four years. 20 million. You know like I do, that the ability to recruit new consumers is the lifeblood of any company.
We're able to achieve this and so much more because we delivered on what we said we would do four years ago. Promises made, promises kept. Very important at Ralph Lauren. We strengthened our brand desirability, especially among the young generation. We built our core and developed high potential categories, and you'll hear a lot about this today. Finally, we transformed our go-to-market model. Today, we are a stronger, more profitable company. We delivered on our plan while staying true to Ralph's vision and to what we stand for. Ralph, good morning again. You provided us with a clear ambition, set of values, and purpose that guides everything we do to inspire the dream of a better life through authenticity and timeless style. This grounds us, always has, and always must.
I'd like to take the opportunity, since we're all here, having just rung the bell together, to personally, and also on behalf of everyone here and on the webcast, acknowledge you and thank you for your tremendous inspiration and your amazing partnership. Thank you, Ralph. What an honor to be here with you today. We've always had a clear purpose, but a few years back, we needed to do a better job bringing it to life across all dimensions of our business. We also needed to do a better job connecting and engaging with consumers throughout our brand portfolio. And that's what we've been doing. These past four years were not just about a one-time transformation.
They were about building a foundation, a fortress foundation, so we could unlock the full potential of this brand, and keep in mind, this brand is so much bigger than its business, and sustain its momentum for the long term. The strength of this foundation is what is now enabling us to accelerate even in a more challenging context. That's really what today is all about. Accelerate. It's actually the name of our plan. Next great chapter, accelerate plan. We're gonna cover a lot of ground over the next few hours, but there are really three things I will want you to walk away with. First, our reset is complete, and we have built what I like to call a fortress foundation. Second, we have a clear game plan with choiceful, distinctive strategies.
Third, we are poised to accelerate our growth and our value creation, and we have the early momentum to prove it. The last four years have been an important chapter in our story. The story that spans 55 years, Ralph? Hard to believe. Like with any good story, the prior chapters prepare us, inform us, and to some extent, assure us of what's next. Over the next few minutes, let's review our progress since our last Investor Day, and many of you were here four years ago. It's hard to believe it was four years ago, but here we are. It is really this progress that has positioned us to now do exactly what is embedded in the name of our plan, which is accelerate. We have elevated and strengthened our three most important assets, our brand, our product, and our go-to-market model.
We have built out five core enablers that support all of them and enable us to bring them to life. Let's start with our assets, beginning with our brand. I hope you could see and feel from the video we just shared the strength and the desirability of our brand now across generations. The evidence goes deeper. Our brand perception has significantly strengthened since we were last here together, with now 74% of consumers perceiving Ralph Lauren as a luxury brand. 74%, critical number. 80% in the recent reading in the U.S.. 80% of consumers perceive Ralph Lauren as a luxury brand. It's the kind of luxury that transcends everything, from the red carpet to life's seminal moments.
I hope you all saw the partnership that we had during J.Lo's wedding and the three beautiful dresses Ralph and our teams developed for her, and also life's simple joys and moments. It is luxury lifestyle, and I will come back to that. As a result, the 20 million consumers we added to our DTC channels are predominantly higher value, younger consumers who fill their baskets with more elevated full-price items. Our brand elevation program has also provided us with strong, sustained pricing power. I think you are familiar with the progress we have made here. Just to kinda step back, we've actually been able to increase our AUR by more than 60% since we last met, 64% to be precise, while achieving our highest ever value ratings.
I am sure that four years ago, when I was on stage, had I told you that we were going to increase AURs by 64% four years later, not sure many of you would have believed me. And yet we've done it, and we've done it while increasing our value perception. And so we're very pleased with that progress, and I think that demonstrates the pricing power that this company and this brand has, not just this last quarter, not just this last year, since we started this elevation journey four-plus years ago. Most of you know. Let me get this right. Our brand is elevated, our brand is desired, and it's skewing younger. Now let's talk about our second asset, without which of course there would be no brand.
The beautiful, unique, and timeless products Ralph and our design teams, and we have several of our design team leaders here today, design and create day in and day out. Most of you know Ralph's story started with a tie. It was never about a tie, and it's good to see some of you wearing a tie, actually. Congratulations. It was never about a tie, or fashion for that matter. It was about creating the best, highest quality product that made Ralph and anyone who bought it feel like they were stepping into their dreams. To some extent, the product was a prop in Ralph's dream, in his movie.
In fact, from my perspective, when I see Ralph in action, and I've had a chance to see this for many years now, particularly now as we get ready for the next fashion show in a few weeks from now, Ralph is so much more than a fashion designer. In my mind, Ralph is actually closer to a movie director. Ralph creates worlds and then invites people into these different worlds. Over the past 55 years, we have built exceptional product upon exceptional product to widen our luxury lifestyle brand and enable more dreaming, more movies. This unique approach to luxury is about life. Not ostentation, status, or wealth, but love, family, connection, and a real appreciation for authentic living. It is what has allowed us to own the luxury lifestyle category.
As part of this unique proposition, we have an outstanding set of timeless core products, some of which you can actually see around me, and I'll give you a second to enjoy it. They range from our iconic polo shirt, to our classic chino, to our elegant double-breasted blazer. These are powerful pillars for our business. In the last four years, we have made our core even stronger, an even larger share of our business. Today, our core represents 70% of the total company. In times of uncertainty, you wanna make sure as a company you have a strong, robust core with products that consumers know, that consumers trust. Now, last time we were here, we also committed to building out new, high-potential, underdeveloped categories. New product categories where we had a real basis to win. We have made very strong progress here.
Take outerwear, for example. A higher AUR, higher gross margin product that uniquely appeals to the younger generation, as you can see here. We have more than doubled its size and penetration over the past four years to nearly 10% of our business, and I think you see some beautiful examples of outerwear on both sides available for purchase after this meeting. We are now, in outerwear, a serious contender, and you can expect us to continue to fuel that momentum and strengthen our position in this highly valuable, younger consumer relevant segment. Likewise, new underdeveloped categories like denim, like sneakers, which we had called out as priorities five years ago, are also showing strong momentum. Our brand and our incredible products then come together in our third asset, our go-to-market model. You have the visual. A model that powerfully and profitably showcases our luxury lifestyle proposition.
Here, our progress has been deep and broad. A few data points. Right now, 63% of the company is direct-to-consumer channels. Sometimes we have conversations, and I get the impression people believe Ralph Lauren is a wholesale company. That may have been true in the past. That is not true today. The majority of our business is coming from direct-to-consumer channels, and that will continue to expand. 63%. We've elevated our presence by dramatically reducing our brand diluted distributions, and those of you who listen to every single one of our earnings calls know that we've been kind of providing progress reports on this work. We're incredibly proud of the transformations we've driven here. We have exited, in the U.S. only, two-thirds of our department store doors. Two-thirds. We have reduced our exposure to off-price by over 50%.
We've also transformed our digital commerce operations. Which now represent about a little bit more than a quarter of our business, and that number will continue to expand. Our own digital sites are delivering a faster growing, margin-accretive, more elevated experience around the world. We've reset our distribution, but what's most exciting is how we're leaning into our unique consumer ecosystem model, a model that is predicated on truly connected retail. Now, what do I mean by that? Well, let me tell you a quick story about my two kids, Thomas and Clara, 25 and 21, and they just entered the workforce a few months ago. Their shopping pattern is anything but linear, is anything but single channel as maybe the prior generations were. They're bouncing around from one channel to the other. It actually gives me a headache just to keep track of it.
One day they're on TikTok, the next day they're in our store, the following they might be on Instagram. Then they might ultimately end up buying on our website or one of our wholesale partner's website. Then add on to that, my son Thomas, who's a massive gamer, spends a lot of time, probably a little too much, on Fortnite. He's got to dress his avatar. Who wants a nude avatar on Fortnite? He's buying skins for his avatar on top of that, and I'm very happy to report that I'm no longer paying for the skins of his avatar. All this to say that there's massive channel jumping, right? We have to be agnostic about where inspiration and transactions take place. Now, within that, we're also very focused on turning consumers into multi-channel connected retail consumers.
You probably know the stat that an omni-channel consumer is worth 4 times, not once, not twice, not 3, 4 times the size of a single channel consumer. Just imagine the potential as we put even greater emphasis on driving this omni-channel approach. We have these three unique and powerful assets, a desired brand, iconic products and lifestyle portfolio, and a proven go-to-market model. The performance of these assets and the ability to unlock their potential consistently, and I think we can characterize as being a relatively dynamic market, requires more. Requires something that is uniquely Ralph Lauren, a fortress foundation. In other words, five rock-solid enablers that have allowed us to execute with excellence at every turn. You know, in this industry, how critical execution is at every touch point for consumers.
I wanna start with our most critical enabler, our people and our culture. We have a short video that we'd like to share with you.
I've heard Ralph say it, and I love it when he says it, "We are the best. You know, there's not a better American designer out there."
You have the ability to be so many different people here. Why only be one thing? I work for a guy that's a cowboy one day, a race car driver the next day, and I'm like, "This is a home for me."
Movement, opportunity, trying different things is just part of how we operate. I know quite a few people that have worked their way up from temporary positions with the organiza tion to now be directors of departments.
The possibilities really become endless, and it's really just up to you to kinda carve out your own path.
This is a place where you can be yourself, express your ideas, being heard. That sense of inclusion that doesn't really come just from like sort of a corporate need, but really from the heart.
Life at Ralph Lauren for me is just about Kevin being able to be Kevin and people find the beauty in what I am and what makes me. That's a powerful thing for me. There are no caveats. There are no explanations. There are no asterisks. It's just everybody is who they are, and that's the standard, and that's beautiful.
That magic and connection you saw truly reflects the culture that Ralph has built and the talent that we attract. Let Kevin be Kevin. As I often say, culture eats strategy for breakfast, lunch, and dinner, and our company culture is a competitive advantage. The data here is very clear. In our most recent Korn Ferry survey of global employees, all 24,000 employees around the world, we were at or above the high-performing norm. Across all industries, not just our industry, across all industries that means our teams are clear they're focused they're committed and they're working effectively together and what's more today we have more diverse organization leadership team and board and this is helping to drive a spirit of innovation and excellence which you're going to see across all of our enablers.
Let me highlight all five elements of our fortress foundation, and then I'll provide some additional perspective on each one. After people and culture, our second enabler is best in class digital technology and analytics, followed by superior operational capabilities, a powerful balance sheet. Thank you, Jane. Finally, leadership in citizenship and sustainability. Let's take them one by one. Best in class digital technology and analytics. We've embedded these across every facet of the company. One example, we created a powerful new consumer intelligence organization called CIX, led by Iris, who you'll hear from later in this presentation, that leverages analytics and artificial intelligence to drive precision consumer targeting, recruiting, and retention. Remember that 20 million number we talked about earlier? This is the engine behind it. Third capability is superior operational capabilities.
This is all about our proven productivity muscle and our supply chain capabilities. This ranges from our step change emphasis on ROI to our focus on eliminating inefficiencies to all the work we've done on our supply chain. Many of you are very familiar with it under Halide's leadership, who you'll hear from later today as well. Diversification, localization, platforming, digitization, and I could go on and on. You have seen the power and the agility of our supply chain during COVID. Fourth enabler, a powerful balance sheet. This is at the heart of our stability and our ability to accelerate. It has enabled us to nearly double our marketing spending as a percent of revenue. Last time we were here, we were spending between 3.5% and 4% of revenue on marketing. Now we're at 7%.
It has enabled us to open 450 new standalone stores and concessions around the world, and also to build a brand new global, highly competitive global commerce digital infrastructure. All these investments while returning $2.3 billion in cash to our shareholders, to many of you. Last enabler and capability, leadership in citizenship and sustainability. You know, I do roundtables with our teams on a regular basis. I will tell you, citizenship and sustainability consistently comes up as the first topic of discussion. In every market, we hear that from our consumers as well, especially the younger ones. We've transformed our approach to our impact in the world. Not because it's trendy, but because it is critical to our future success and to who we are.
We create things that are meant to be loved, worn, and passed on to the next generation. There's a lot of conversation about ESG right now. I will tell you, our point of view on this is very clear. Our stakeholders expect us to play a leadership role in sustainability and citizenship, and we will continue to play a leadership role in sustainability and citizenship, whatever the noise may be out there. It is the right thing to do for the business. It is expected by our stakeholders, and we are focused on addressing our impact in the most effective way. We call our approach Timeless by Design, and we've prepared a little video for you to check it out.
I discovered the heritage of a timeless world, uncontrived, free-formed, and free-spirited, natural, and from the earth. It touched me and became part of all that I design.
This is an area where we are driving major innovation, and our leadership commitment is very clear. Ralph and I are so proud of the teams that have trailblazed in areas like taking wastewater out of dyeing materials through Color on Demand and open sourcing it for the industry, because on these topics, we have to leverage our industry scale. Again, we wanna be the tip of the spear on all these activities. We're partnering to create the first-ever performance cotton material. Three assets, five enablers, and we've made great progress on each one in I think what we can characterize as a relatively difficult context. As I said earlier, our reset is complete, and we now have a fortress foundation. Now on to the future.
Before we get to our game plan for the next three years, I wanna talk about the bigger picture for our company. Because as you know, we're not just planning for the next three years, we're planning for the next decade and beyond. Bear with me for a moment. I think, as you know, Ralph Lauren is about building dreams. That's at the origin of this company, building dreams. We like to dream. We like to imagine. This is something actually Ralph and I do frequently with our teams. In fact, one of the very first things I did when I started a little more than 5 years ago is ask my leadership team to write the Harvard Business Review article for 10 years out, what the company would be 10 years out, what the next chapter would look like 10 years out.
It was an incredibly inspiring exercise. So many possibilities emerged and actually informed our plans. For the next couple of minutes, I invite you to join me in imagining what our business could be even further into the future. Imagine if every consumer who purchases one of our iconic Polo shirts, and we sell over 10 million every year, also bought a pair of our denim, pair of Polo sneakers, or one of the new Polo ID bags we launched. Imagine if we were able to replicate our success in men's, which accounts for a little more than half the company, into the women's segment. Imagine if we expanded our successful ecosystems that already exist in Shanghai, London, Tokyo, New York, into new cities like Houston, Atlanta, Berlin, and Seattle. Imagine the incremental growth and value creation that would create. I could go on.
There's an amazing runway of possibilities for this company, and it is the strength of our assets and our fortress foundation that give us the confidence to continue to dream, to imagine. Remember, we started with a tie. Look at where we are today. Ralph has said it. You've said it. You're here, I should say you said it. We all have the ability to step into our dreams. Actually, Ralph Lauren is reinforcing its position as a leading luxury lifestyle company. This is our ambition, to be the leading luxury lifestyle company in the world. With strong momentum, we are well on our way to unlocking even more potential. Our aspirations will translate into attractive and sustainable growth and value creation for all of our stakeholders.
Now, as investors, I know you'll be particularly interested in this next part, those of you who haven't seen the press release yet. In terms of financials, over the next three years through fiscal 2025, we plan to, first, drive accelerated top-line growth in the mid- to high-single-digits. Second, deliver bottom-line growth ahead of top line with further margin expansion. And third, doing all this while continuing to invest in the business on our key strategic priorities, which we'll talk in a second, and continue to return significant capital to shareholders, to many of you. Jane will provide more details on the numbers later in the presentation. That's the what. Let's talk the how. We have a clear game plan rooted in choiceful, distinctive strategies. What do I mean by choiceful? They're focused, they're prioritized, and they're intentional.
They're really comprised of three strategic growth drivers, which correspond to our key assets. First, elevate and energize our lifestyle brand. Second, drive the core and expand for more. Third, win in key cities globally with our consumer ecosystem. Let's take them briefly one by one. Strategic driver number one, elevate and energize our lifestyle brand. You heard me talk about our brand's credibility and premium appeal and the massive progress we've achieved over the past few years. We believe there's an even greater opportunity to expand and further elevate in the eyes of the consumer. We're also gonna continue to drive brand heat in a way only Ralph Lauren can.
From our iconic runway presentations, our next one is in a few weeks in California for the first time ever in the west of the U.S., and heart-pumping moments like the Olympics, we had two this past year, and the U.S. Open, which we got a chance to see some of you there, to our innovative Roblox, I hope you all have your avatar on Roblox, and Snapchat collaborations in the Metaverse. Ralph Lauren is clearly, distinctly, powerfully on the map as one of the best storytellers in the world. Now, we also know that purpose and values are increasingly driving purchase decisions, and that's excellent news for our company.
This really plays to our advantage because we have some of the strongest brand equities in the industry when it comes to values like socially and environmentally responsible and conscious, authenticity, timelessness, and this allows us to connect with our consumers around the world authentically. You're gonna hear more from David. Where are you, David? Right there. You're gonna hear more from David and Iris, who's from my home country, about these areas in a minute, all right? How we're taking our powerful brand, converting and retaining more consumers across every demographic, every generation, thanks to our unique portfolio of marketing assets and platforms. Now let's talk product. Strategic driver number two, drive the core and expand for more. The large market we play in is poised to grow roughly 3%-5% annually over the next three years.
This is expected to be led by several key areas like women's ready-to-wear and leather goods. This is precisely where we have clear opportunities to expand, and part of the reason why we believe we will outpace the market for our cash growth trends. These are not just uncertain bets for us, right? These are businesses where we already have a foothold. You can see around me. These are businesses where we already have credibility with consumers, just like we did with outerwear. It's about execution. You'll hear from Halide, over there, about how we will continue driving our core, a major asset for our business, as we discussed earlier, 70% of the company, as we pursue highly targeted unit growth coupled with continued AUR expansion.
Now, we've also updated our new high-potential underrepresented categories to zero in on those products that consumers crave the most as their lifestyles and approach to dressing evolve. As we know, during COVID, things got a little disrupted. Now, moving on to strategic driver number three, our go-to-market model. Win in key cities globally with our consumer ecosystem. Owning the consumer experience, driving digital-first, and scaling our ecosystem model across the top 30 cities globally. As I said earlier, one of the most important transformations we have undertaken over the past four years is taking direct ownership of the consumer experience, offering an elevated Ralph Lauren experience wherever consumers meet our brand. Our ecosystem model, which fully integrates the physical and the digital, has a significant opportunity to scale across all three of our key regions. North America, you'll hear from Bob. Europe, Ashley is here.
You won't hear from him, but he's here. Shin, who covers Asia. All three regions have significant opportunities for scaling. Bob and Shin will specifically take you through how we're building this connected retail experience in key cities in their markets. While we've made excellent progress on digital commerce and our digital commerce operations, there is so much more runway ahead. You're gonna hear from Janet, who will tell you more about how we're accelerating and elevating our digital channels, as well as leveraging digital across every dimension of our business. With the strength of our performance to date, our clear strategic growth drivers, and our fortress foundation, Ralph Lauren is poised to accelerate growth and value creation. This is our plan to be the leading luxury lifestyle company in the world. Three strategic growth drivers, five enablers.
It's clear, it's choiceful, distinctive, and powerful, even in a continued volatile environment. In a moment, you're gonna hear from some of the leaders I mentioned. You all know Jane, who's been a tremendous partner in designing and executing our strategy. You'll also hear from David and Halide, terrific leaders who I think many of you have had the opportunity to meet. I look forward to introducing several new faces today. Each of them has a successful, long-standing track record at Ralph Lauren and at other leading firms. What they all share with Ralph and me is their passion and belief in our brand, in our teams, and in our potential. I cannot say enough about this team, and you might say I'm a little biased, and maybe I am. I think they're the best team in the industry.
Before I hand it off to David, I'll say this. This company started with a dream, an idea, a possibility, and it expanded into so much more. That notion of making dreams a reality continues to fuel all that we do, and you can count on that continuing to play out with our next great chapter, accelerate plan. Let me repeat. Our reset is complete, and we have established a fortress foundation. We have a clear game plan with choiceful, distinctive strategies. With early momentum under our belt, we are poised to accelerate growth and value creation. We are unlike any other company in the world. We have the strength to build on our incredible track record to firmly establish Ralph Lauren as the leading luxury lifestyle company in the world.
With that, I'm gonna turn it over first to David Lauren, our Chief Branding and Innovation Officer. David is the orchestrator of amazing moments like our unveils at the Olympics, and your teams have been busy over the past year since we've had two Olympics. Like all the activities at the U.S. Open, and also the fantastic groundbreaking celebration of our fiftieth anniversary on the polo shirt. You will have seen the polo shirt campaign, the beautiful book that was launched. You should all have a copy. Check if your picture is in it. Or maybe you'll be in the next edition. With that, I'm very happy to welcome David on stage. David.
Thank you, Patrice, for that presentation and for showing us just what our future can be. Thank you always for your partnership and your leadership. Especially, I always like to thank you for reminding us that we're not just in the clothing or the fashion business, but we are in fact in the dreams business. Thank you. I'm David Lauren, and I'm here to talk about the power of the Ralph Lauren brand. My father started this company over 50 years ago, and you've all heard that story, I know. The story that resonates with me is the story of my mother and my grandmother helping to sew the labels into the ties in an apartment in the Bronx.
Now, on each label said the words Polo, and even though my father had never actually been to a polo match, it conjured up an image of a sophisticated world, an aspirational lifestyle, an elegance, and a stylish sensibility on and off the field. From that singular tie, the brand grew into shirts, into menswear and womenswear, children and home, and so many other products that you all know. With each product grew new ideas, and dreams, and they became the backbone of our advertising and our marketing. Some people would even say that today and over the last 50 years, those ads have become as iconic as the products themselves.
Some people buy our products and pay a premium to buy them just so they can feel like it's a, it's an opportunity, it's a ticket to step into those dreams and to live out the worlds that they see in our ads. As the company grew and as new people came to support Ralph and build his vision with him, the brand started to develop more and more stories, and we started to connect with men and women and children of all ages, of all generations, all around the world. Those stories have resonated, and they connect with people, and they excite them like no other brand can do. Today, Ralph Lauren takes you from the highlands of England to the Great Plains of the West. From the streets of Milan to the coast of New England. From the beaches of Nantucket to the glamour of Hollywood.
From the snowy Aspens, snowy mountains of Aspen, to the French Riviera. From the highways of California, to the fields of Oxford. From the boardroom to the classroom. What holds this all together is that it's about family, it's about love, it's about a community. Ralph Lauren has always invited you to be a part of his dreams. He wants you to step into his worlds, literally, and envelop you, to pull you in and build this kind of world together. We invite you into our beautiful restaurants, like our restaurant up on Fifty-fifth Street, which I hope you've all been to. We wanna invite you into our coffee shops, so you can sit together and have a coffee and enjoy the warmth of each other, just like we're doing here today, enjoying a Ralph's Coffee.
It was kind of amazing to see that coffee truck sitting outside the stock exchange and watching people asking for a cup of coffee. Ralph wants you to join us in our stores. It's not just a store. It never was just a store. It was about coming into his home, being invited into something that felt warm and enveloping with a roaring fireplace there to greet you. People love to come, and they love to dress up and to wear the clothes. Whether they're in Chengdu or Milan, whether they're in Berlin or Paris, whether they're in Los Angeles or Boston, people love to wear the clothes and be a part of this world, to be a part of this dream, to literally step into it and feel the sense of class and aspirational world. Now, the ultimate invitation is to Ralph Lauren's fashion show.
Right here in New York City, we recreated Ralph's own apartment at the MoMA Museum. It was just for 400 people, a very select group of people, editors, influencers, celebrities got the chance to see the best of Ralph Lauren come down the runway. The most elegant clothes in the world, our men's and women's collection, the finest fabrics, the finest craftsmanship. From a small show of only 400 people, we generated almost 11 billion impressions, which is a huge number. What's even more exciting is that after the celebrities saw the show, they started to wear the clothes. At the two Met Galas last year, between J.Lo and Alicia Keys and Lady Gaga, we generated 21 billion media impressions.
It gets even better than that because once the editors started to see the clothes and to see all the things we were doing as a company throughout the year, the credibility that they started to see what we were doing and write about it in their publications, in print, online, across television, we generated 380 billion total earned media impressions worth almost $3 billion. How many brands can you think of that can generate that kind of excitement and galvanize and inspire customers this way? It's pretty incredible.
Now, the fashion show may be a wonderful way to build fashion credibility, but perhaps an even bigger stage, a global stage, is the U.S. Olympics, where we had this amazing opportunity to dress Team U.S.A as they walked out in front of the audiences in Japan and then in China, representing America, and they're wearing Ralph Lauren. It's an amazing opportunity for us as a company to showcase who we are, but to also reflect what's so great about the leadership of America and the spirit of our country. From there, we just outfitted and worked closely with the U.S. Open here in New York City to Wimbledon, the most elegant of all sporting events over in Europe, and of course, the Australian Open, which reaches an Asian community and has incredible reach over there.
Now, for years, we've been doing golf, and we're proud to work with the Ryder Cup and the PGA. My favorite is the Yankees because my father grew up in the Bronx, and this amazing opportunity to be honored by the Yankees and be able to throw out the first pitch was an amazing moment for him. From the time he walked from the pitcher's mound to the dugout, we had sold through tons of the product from our capsule collection that we did with the Yankees. It was amazing to just watch it right there on our app and to see how fast people were buying it and so excited about it. If you wanna speak to a new generation, there's nothing like being in the digital leagues.
We're proud to outfit G2 and to work with digital athletes as they are gamers wearing our products. Of course, what we've done with Bitmoji, we're 1 billion try-ons. People put on our clothes and tried it on, 1 billion try-ons. Of course, ZEPETO, Roblox, Snapchat, these are all part of our digital strategy and many other companies as well, and we're continuing to grow in the Metaverse. Now, it's one thing to be relevant, but it's another thing to be authentic. For over 50 years, Ralph Lauren has been the very definition of authenticity in our fashion industry. Long before it was fashionable to talk about being a supporter of the world, Ralph Lauren put Pink Pony on the runway, and he led our industry by creating Fashion Targets Breast Cancer, which galvanized the fashion industry to fight cancer.
Today, our Pink Pony efforts are growing, and we're talking to people not only who suffer from cancer, but people who want to help raise funds and awareness and wanna get the message out there. We've created this capsule collection, which has totally been a way to inspire people. I'm so proud that over the next five years, our company will be able to open five new cancer centers. From there, I am so proud of the partnership we've created with Morehouse College and Spelman College. Our own employees, alumni of these prestigious universities, came together to work with Ralph Lauren to design this collection, which has been incredibly popular. It's also helped to celebrate these Black universities, and it's been an incredibly successful way for us to connect with new audiences and to celebrate what we've always believed in.
Pride is something that we've been involved with for years, and it continues to be a central part of who we are. Of course, sustainability. A lot of companies talk about it, but we are making a difference. We're making better products every day that are better for the environment, and I know Halide is gonna speak to that more. I'm especially proud, though, of what we did with our Polo Earth fragrance. It was a leadership fragrance where we were able to inspire a new generation of customers to recognize the Polo fragrance. Of course, with our Polo shirt, we led our industry finding new fabrications, finding new ways to bring the brand to life. We recycled plastic bottles from the oceans that otherwise would have caused further destruction, and we turned it into a Polo shirt.
It's just one of a number of ways that we're innovating. Now, the polo shirt, in many ways, it is synonymous with Ralph Lauren, and this year, Rizzoli chose to honor and to celebrate Ralph Lauren's polo shirt by creating a 500-page book which showcases all the ways in which he's made this shirt his own, how he dressed it up, how he dressed it down, how he cut it and sewed it and stitched it in a million different ways, and all the different ways he styled it, and how it connected with so many women, men, and children all around the world. The shirt has become so popular, in fact, so ubiquitous, that it is literally a part of the fabric of our culture. The shirt has become literally a symbol of Ralph Lauren's American dream.
How many people can say that a shirt really represents the American dream? It's uncanny. If you look at this shirt has been worn by presidents and royalty. It's been worn by rappers and rockers, movie stars, legends, moguls and leaders, and of course, it's been worn by real people who share real stories and have real memories, getting married in their polo shirt, going on their first date with a polo, going for their first job interview. I bet somebody in this story would like to get up here and share their story. So many people have stories, and we started to collect them. In this book you can see this amazing young boy. His mother tells this story about how every year for his class picture she dressed him in a red polo shirt, and as he grew up, you can see it.
When he was too old to go to school, she took the polos, and she knitted them into a blanket which she sleeps with at night. That's the emotion that this shirt has for her. This doctor, under her scrubs in an emergency room, wears this shirt for a sense of femininity and a sense of humanity. Kehinde Wiley, who created Obama's portrait, one of the great Black artists in America, when it came time for him to paint some of the most iconic paintings which hang in museums today, he chose to put his subjects in polo shirts because they reflected the American dream and an aspirational sense of how people live in America today.
Of course, this young woman, for her high school graduation speech, when it was time for her to talk about companies that were helping to make our planet better, she wore our Earth Polo shirt, which I just talked about. She talked about how companies can make a difference, how Ralph Lauren is an example of this, and how we can all change the world and make it better. Of course, on social media, we've collected these stories from all around the world, from all generations, from men, women, and children, and everybody has a story, and it's become a social media moment for us, thousands of stories coming in from everywhere. As Ralph Lauren has often said, "It was never about a shirt. It's about a way of living." What Ralph Lauren does is connects with people. He builds stories. It's about authenticity.
It's about values. It's about emotion. It is about a dream of a better life. I can't stress enough how exciting it is to be in this company. This is a company about humility but also confidence. It knows who it is. We know who we are, and we know where we're going. I'm so proud of the excitement and the energy that we've created and how we've connected with men and women, with children all around the world, this company is more relevant than ever, and all the stories I've talked about today may seem like a lot, but that's because there is a lot of people. There are a lot of people to connect to, and there's a lot to say, and we're doing it every day, and we're really, I think the future for us is truly limitless.
I thank you very much for being here today and being a part of our story. I wanna turn it over now to Iris, who I've worked with. I said yesterday, "Wow, we worked together for 12 years," and she said, "No, it's almost 14 years." I am so lucky to work with her. She heads up our marketing globally and has been an incredible partner, and she's gonna talk about many of the ways in which what I talked about up here is really connecting with our customers. Thank you.
Thank you, David. It's been a privilege to bring the world of Ralph Lauren to millions of customers throughout the world. I'm Iris Langlois-Meurinne, and I'm the Chief Marketing Officer. I've witnessed how the brand resonates throughout the world. I grew up in Paris, lived in Asia, lived in South America. This dream is universal. It transcends cultures, communities, and generations. What I would like to demonstrate today is to what extent this dream translates into tangible business results. Here are three takeaways for you today. First, the brand is more relevant than ever, and we have driven unprecedented consumer growth. Second, we still have room to grow thanks to our new data-leading capabilities and our brand values. They are where the market is shifting. Third, we have clear growth opportunities with women and the next generation. They love us. In fact, they adore us.
Let me tell you, since the last Investor Day, we have fueled impressive results. We are in a very strong position. We recruited 20 million new consumers in our DTC business alone. I know Patrice mentioned it, but it bears repeating. 20 million. What's more, 74% of consumers consider Ralph Lauren as a luxury brand. What Patrice didn't tell you is that our brand has the highest consideration with the next generation. What's most impressive to me is the huge scale that our brand drives. We have a massive penetration. One in four consumers in the world today shopped at Ralph Lauren in the last 12 months. Despite this huge penetration, we have continued to grow at a rate of 38% for our DTC first tier and digital stores. In short, we have reach, we have luxury credentials, and we have appeal across generations.
How did we achieve those results? We created a powerful marketing engine that brings together brand desirability and consumer performance, magic and logic. I'm extremely proud of our team that brings amazing talents from CPG luxury marketing talents, new media web three pioneers, and data scientists. We work with a network of 250 data scientists. There is indeed a real science behind our marketing strategies. In the last two years, we have built a new leading consumer intelligence functions. Its mission is to turbocharge consumer acquisition, retention, and most importantly, lifetime value, and I will come back to this in a minute. It does that through real-time consumer analytics, AI modeling, and personalization at scale. They have accelerated our ability to trade in, trade up, and trade across our consumers. They predict consumer behaviors, leveraging our first-party data.
This is a massive competitive advantage in a world which is digitally complex with inflation costs rising and e-privacy restrictions. No one in luxury has anything like it. It is a unique vision to pair artificial intelligence with style. Our ambition is to offer the styling service that you get on Madison Avenue or on Boulevard Saint-Germain anywhere in the world, in our stores, digitally on our websites or on our social commerce, and in the future, in the Metaverse. This is what we call 3D clienteling at scale. This is the foundation for consumer recruitment, satisfaction, and ultimately long-term loyalty, lifetime value. I say it is unique, well, the many awards that our team has received prove the point. We are recognized as industry leaders. Congrats, team. It's just the beginning. We still have ample room to grow.
In line with the power of our brand and our new capabilities, we have three major growth opportunities. First, grow consumer lifetime value. Who better than Ralph Lauren to accompany the consumer throughout their life stages to dress for themselves, for their family, their friends, or furnish their home. Second, elevate our consumer base. Luxury consumers today are looking for brands that have a strong sense of purpose, that sell more than products. Our cinematic lifestyle world has never been so appealing to luxury consumers. Third, harness consumer and market shift. The market is getting younger and the young love us, and so do women. The majority of our consumer base are women, and we have a huge potential to trade them across, and I will explain shortly. Now let's look at each of these building blocks, starting with lifetime value.
Our timelessness is at the heart of our ability to retain consumers for life, paired with our new data capabilities. We are synonymous with timelessness. In fact, we are rated as the most timeless brand amongst our competition. You're gonna tell me, why does it matter? Well, in an increasingly circular world, timeless brand prevails. Consumers are looking for products as investment which value accrue over time. Most importantly, a timeless style transcends trend. In other words, a Ralph Lauren style never goes out of fashion. It is reassuring. It gives great style confidence season after season and year after year. Most importantly, we are in a time when acquisition costs are rising, so retention, and by extension, lifetime value are even more important, and we are extremely well-placed from that perspective. The concept of lifetime value is inherent to the way Ralph imagined this world.
It's actually the heart of our philosophy. Consumers come for us for every occasion, from the classroom with a polo shirt, we've seen it, to the boardroom with a suit or a dress, to the living room with a sofa. They come for themselves, they come for their family, they come for their friends, from one generation to the next. In the U.S., 1/3 consumers say that they grew up wearing the brand, and 1/3 DTC consumers shop across our brands and our categories. This sense of belonging to the brand creates trust and an emotional connection, and ultimately long-term loyalty, high lifetime value. Okay, but we don't only rely on our timelessness to fuel lifetime value. Our CX team is developing AI models, AI lifetime models.
This model will empower us to strategically invest in those consumers with the highest predicted value for the long term. Now let's move to our second building block, elevate our consumer base. In short, increase the penetration of high spenders. Our company, our brand has elevated to new luxury heights in the last few years across channels and across geographies. What we are the most proud of is our ability to increase AUR, but at the same time increase our value for money perception. We increase our prices, but also see that our value is increasing. I know it's counterintuitive, but I think it's a great testament to the way we have elevated our brand from all angles. How did we achieve those results? We concentrated on the two ends of the consumer spectrum, the high spenders and the highly promotional consumers.
Let's start with the high spenders. Always better. We know already that we over-index in high-income consumers. We have increased the number of our top spenders by 41% since the last Investor Day, and they have an unprecedented loyalty to our brand with a retention rate of 60% year-over-year. We have amazing clients. Just give you an example. Some of our top customers spend up to $1.6 million a year with us, and $7.7 million on a lifetime value basis. We will keep pushing on high net worth strategies in our top 30 cities that Bob will walk you through later on. In the back end, our CX team is also working on developing new loyalty programs. Now let's go to the other end of the spectrum.
We have traded up our highly promotional clients by reducing our discount volume to increase our margins and protect our brand image. We built price elasticity models. We can now identify those consumers who do not need a discount to convert. In parallel, we have developed tailored discount for the rest of the base. These price elasticity models are our best weapon to continue to increase AUR and margins up in the future, especially in uncertain times. Believe me, as this calming image suggests, we went through a bit of a detox. It's been a huge relief. Let's now look at the major demographics that are driving the market growth in the next 10 years. Women, the next generation, and ethnically diverse consumers. Ladies first, I cannot stress enough the huge potential that women represent for our business, arguably our largest opportunity.
We know that 56% of our consumers are women. However, less than 30% of our business is in womenswear. We therefore have a huge opportunity to trade across those women to convert them to shop for themselves, as opposed to only for their partners, their kids, and their home. We have developed a very robust strategy for womenswear that Halide will walk you through later on. In parallel, we will invest disproportionately in women high desirability campaigns with handbags at the center as we know they're a great entry point to the brand. Another exciting opportunity is the next generation. Gen Z and millennials are expected to represent up to 70% of the luxury market by 2025, and we are so well positioned to win further market share with them. Our brand has the highest consideration with the new generation.
We over-index in terms of the new generation, but what's very important is that they resonate with us. They understand our sustainable values and our sense of purpose, and they embrace our style. These Korean pop stars, as you can see, are embracing our iconic and preppy style in a major TV show in Korea. Our timeless style is embraced by the new generation. Over the last few years, we have been concentrated in breaking through where this generation is spending time. No surprise on social media and on the gaming platforms. They get inspired there, and they shop there as well. We have worked hand in hand with the media giants such as Meta, TikTok, Kakao, Roblox, ZEPETO, just to name a few. They have given us access, exclusive access to their main innovation for us to express our world, and the results speak for themselves.
Over the last four years, our database of, I mean, our social followers of 50 million have grown by 71%. I'm gonna give you one striking example, which is in Japan, and I'm looking at Jay here. On the social platform called LINE, we are the leaders. We have 10 million followers. It's 8% of Japanese population following us. That's it. We were also very early in the Metaverse. Since 2020, we have recruited 35 million consumers with our virtual goods. The Metaverse is a new playground for us to recruit new consumers of the new generation. Let's now move on to a very important demographic shift. Our markets are becoming more ethnically diverse than ever. Our consumer base is actually highly representative of America's ethnic diversity, and this is a testament to Ralph's vision.
Since the seventies, we have featured ethnically diverse cast members in our campaigns in front and behind the camera, reflecting the makeup of our consumer base. This was perfectly illustrated in the HBCU project that David shared with us earlier on. These are just a few example of our commitment to continue to expand our portrayal of the American dream. When we do that, we deeply connect with consumers. Let me recap. Our brand is more relevant than ever, and our timeless values are in line with where the market is shifting. We have clear opportunities to invest in these strategies. We are therefore committed to maintain our increased investment at 7% of revenues, up from 4% in 2018.
We have strong confidence in the high ROI this investment will deliver given our track record and our laser-focused approach in terms of marketing with great balance between long-term brand building and short-term commercial performance. Finally, we have a clear vision for the future of marketing. Our dream is universal. Our cinematic world is ready to cut through with style and emotions across the physical, digital, and virtual world. This 3D world is our new lifestyle playground to engage a new generation of consumers and to retain them for life from one generation to the next. Let me now introduce you to Halide Alagöz, who is my partner in crime and our Chief Product Officer. Halide first transformed our supply chain, and she now oversees our teams from product design to sourcing to merchandising. Halide.
Thank you. Thank you, Iris. Such a joy to partner with you. Before I move any further, I know you've been sitting for a while, and I'm the only one between you and your lunch, so I would like everyone just to take a few seconds just to, you know, chill out, stretch your legs, stretch your arms, bring some energy to yourselves because I need your full attention. Great. Thank you. I am very, very excited and proud to talk to you about our products today. During the last investor day, one of our investors told me that we are always the best-dressed executive leadership team they meet. So today, I'm gonna tell you why and how. As Iris mentioned, the strength of our purpose and the enduring clarity of Ralph's vision enables us to meet the consumers wherever they are in their life.
This is what makes us unique in the industry. We are so fortunate that everything we do is guided by our purpose: to inspire the dream of a better life through authenticity and timeless style. When Ralph founded our company over 50 years ago, he did so with the conviction that everything we create endures the test of time and be loved, worn, and passed on to the next generation. This ethos today is fully embraced by our creative directors, who are mentored and coached by Ralph every day, and it's further embedded into the missions of our design and product teams, so they can manifest this vision through products to inspire our consumers and enhance the strength of our brand. We do this by leveraging one of our core strengths, which is creating products that are timeless.
We have previously defined timelessness as the durability and longevity of our products as well as the intergenerational desirability of them. Recently, we have expanded that definition to cover principles of circularity, both in the ways we bring those products to life, but also building systems to keep them in use longer, like rental, repair, upcycling, and recycling opportunities. From polo shirts that are beautifully weathered to a perfectly broken-in jean or a well-worn sport coat, the concept of timelessness is part of the magic of our brand and will remain a key differentiator at Ralph Lauren. The best example of that lasting power of timelessness is the power and strength of our Core.
Originated in menswear, today our core spans across women's and kids' lines and comprises the foundation of the modern wardrobe across generations. I cannot emphasize enough how important our core and their seasonal iterations have been and will continue to be to drive our growth going forward. Our core has created a lot of stability to our business, and besides that, it also creates a point of leverage for better visibility between supply and demand planning and shorter lead times, so we can flex up and down as the consumer demand shifts in the market. It also enables us to have a better control in costing and margin opportunities. What products I'm referring to when I say our core? From our button-down Oxford shirts, polo shirts, chinos, to our beautiful cashmere cable sweaters or the sports coats.
Our core products really form the foundation of our business, and consumers look at our brand as the premium arbiter of those styles. They are the consistent drivers of our business because they are the consistent staples of the wardrobes of our consumers from all walks of life as they ease into new eras of their lives or new seasons. Our core is the foundation of modern sportswear, which affords it the versatility to span wearing occasions from weekday to weekend, from day to night, from sporty to casual, to put together or sophisticated. Our iconic Polo shirt, it exemplifies these principles. The combination of its sporting roots, its durability, its easy sophistication allows us to stand the test of time, and it has become a staple for women, men, and kids all over the world, all walks of life.
As you've seen in David's presentation earlier, our polo shirt, like our brand, has become a part of the culture, and not only in U.S., all around the world. It represents the best of fashion as a universal language that transcends continents, ethnicities, and ages. Our design teams, merchandising teams, and marketing teams are working together to engage and connect the next generation to these icons. Another thing we love about our icons is that they are not static. The timelessness of our polo shirt allows us to constantly reimagine and evolve it through design codes, but also through principles of sustainability and innovation to continue to capture the imagination of our consumers and meet their needs. As you see on top here, our Earth Polo circular principles, it's both recycled and fully recyclable, or the RLX shirt you see at the bottom.
It's our newly launched recycled cotton fabric, CLARUS, developed with our partners, NFW. It also has full functionalities, one of its kind, one of the first functional recycled cotton products out in the market. The fancy animation you see in the middle is our custom-made Polo program where you can imagine and create your own. We are also continually evolving how we merchandise it. Here you see it styled for young generation in the streetwear, or for a more fashion-forward consumer, or for a more classic look. The common thread is the authenticity, the quality, and the confidence our consumers tell us they feel when they wear it their own way. These principles apply to all of our core programs, not only our iconic Polo shirt, from our down jackets to Oxford shirts, to our luxury cabled cashmere sweaters.
We continue to reimagine and evolve them through design codes, styling, innovation, and sustainability. As a result, we are increasingly proving out that there are no limits how we will carry our icons forward. Like I said, our core transcends geographies and demographics, resonating very well both with the existing consumers and our next gen consumers. These consumers create a rock-solid platform for us to build on every season. For these reasons, we strategically set our core and their seasonal iterations to form the majority of our business. Today, our core and their seasonal colors cover 70% of our business, being an anchor to our sales and profitability. Our foundation and our ability to drive newness in our icons drive consistent growth year-over-year.
As we look into the future, it is this strength that establishes our credentials with our consumers and enable us to bring them into the full world of Ralph Lauren luxury lifestyle. Our core products have outperformed since the last Investor Day, and the consumer response has accelerated through the pandemic. As the consumers, like all of us, adjusting to the realities of life throughout COVID, we brought them comfort at their at-home life, which drove a stable high single-digit growth versus fiscal 2018 outpacing the company trajectory. As I told you before, we do have a unique ability to meet the consumers wherever they are in their life. As they were shifting into a more hybrid life within work, life, events, weddings coming back, their wardrobe preferences have evolved across comfort, sophisticated, casual, and luxury.
We were then able to cater those needs through our shirts, through our dresses, our perfectly tailored tuxedos, our back to travel accessories and leather goods. Today, the consumers can leverage the breadth of our product with our sweet spot right at the epicenter of elevated casual. Last Investor Day, we have outlined five high potential underdeveloped categories, and one of them was outerwear. Outerwear has been a mainstay of our focus and an example of our strength and credibility as a leading luxury lifestyle company, and it will continue to be a key driver of business and AUR during the coming years. Combined with our reputation for style and quality with an elevated product offer, it allows us to build a very strong business balanced across a range of complementary products for all consumers, climates, and wearing occasions.
We are equally known and loved for many of the beautiful outerwear products you see today. From our classic cotton windbreakers to our sophisticated wool overcoats, to our barn jackets, to our active down jackets, consumers love our outerwear. This, coupled with the strong partnership between design, merch, and marketing teams, builds the wardrobes of our consumers not only with what they want from us, but also it drives the benefit of driving AUR gross margin and lifetime value, and allows us to trade those consumers across our various offers and up within our assortment. With the evolving consumer needs and where the market is going, we have recently refined our category opportunities under the Next Great Chapter accelerator plan. We have created robust strategies in our new high potential categories, outerwear, home, and womenswear.
These categories have already grown 50% versus last year, and they lead growth in AUR, but they also expand the emotional connectivity we have with our consumers. While many of our competitors seek a foothold in any of these categories, we have the credentials and strength across the range. That strength reinforces our luxury credentials and unlock further opportunities. Outerwear has strongly outperformed since fiscal 2018, fueling AUR gross margin and lifetime value. Home is a currently small part of our business with significant long-term potential, and Ralph Lauren's luxury lifestyle proposition lends itself extremely well in the home category as we inspire people to step into the movie sets or the dream worlds that Ralph creates. The single largest opportunity that I wanna talk to you today is our womenswear business.
We are among the few brands that can dress her for every occasion of her life. We have established well-recognized and loved brands from Collection and Double RL on the luxury side to Polo and Lauren, where we can reach a significantly broader audience. We are focused on delivering compelling and differentiated products in the market through Ralph Lauren DNA codes and our storytelling. From our high-end proposition to more accessible price points, our aim is to deliver the Ralph Lauren dream. Ralph Lauren is particularly differentiated and number one among our female consumers versus our luxury competitors in three attributes, worth the price, great for gifting, and environmentally conscious.
Like Iris mentioned, we have so much work to be done, both to recruit new consumers as well as converting the existing consumers who today make more than half of the purchasing decisions at Ralph Lauren for their families, for their loved ones, for their home, but only less than a third is purchasing our women's wear products. That is a huge opportunity. We expect our women's business to drive low double-digit growth, led by the growth in Polo women's over the next three years. This will increase the penetration of our women's business by 400 basis points by fiscal 2025. We are confident that we're gonna set the U.S. business on a similar path as international, particularly in Asia, where we have a more balanced dual gender split between men's and women's.
Building on our proven record, we will continue to inspire the range of female consumers through clearly articulated creative vision and brand proposition across various tiers and digital and physical touchpoints. It starts with our collection line. The most elevated women's proposition in our range and a halo for our business with its inspirational fashion shows, amazing marketing campaigns, and immersive in-store experiences. In Lauren, where we reach a broader audience, we have delivered a significant repositioning of our business since fiscal 2018 through exactly what Patrice walked you through of our brand elevation journey. Very encouraging results so far by six quarters of continued market share growth in ready-to-wear women's in U.S. and AUR growth, and U.S. is where we had the greatest work to do. Very encouraging.
With Ralph Lauren turned around and on a strong growth trajectory, our focus is now on the meaningful opportunity to scale Polo women's. Polo women's is the reference point for timeless, joyful, warm American style for women around the world with foundational wardrobe staples in apparel, footwear, and handbags. With the iconic Polo pony player debuting on a woman's shirt by Ralph in 1971, Ralph has led Polo women's with a timeless, active, and effortless sensibility. Since Fiscal 2018, we have grown our women's business by 38%. Our core programs within the women's business, Polo women's business, have been growing over 50%. This momentum validates our iconic and foundational premium proposition, and this growth came with a high gross margin and double-digit AUR growth year- over- year.
Our women's consumer is also growing at a faster pace in our DTC channels compared to the rest of our business in DTC. Females are more valuable, obviously. They drive high levels of average consumer value over 50% versus our average, thanks to the frequency of their shopping and the cross-shopping they do in between our categories and brands. Womenswear Polo is the biggest opportunity we have to recruit new consumers, as well as the conversion of those female consumers that we mentioned who already drive more than 50% of our purchasing decisions today. We are trading up by selectively building into categories like handbags and SLGs. We have amazing handbags in our product displays here, so I do hope during the break you will just go and check both on our Collection line and our Polo women's line.
You can see the handbags that we launched. We are trading her up to the more elevated product within our assortment and within our family of business as we can do hybrid styling as only Ralph can. Many of the females we have in the room are dressing hybrid within our brand. Am I. This is a combination of Polo women's and Collection, proudly carrying. We are driving her across. Our Polo women's team is building a strong foundational core, not only the key core categories that we have in men's business like polo shirts and Oxford shirts, but also female-driven core categories like dresses, like sweaters, like sophisticated coats and denim, which will form the basis of her wardrobe.
Like in our men's business, she will come back to us to replenish and update that wardrobe year over year, and she will trust and rely on our quality, durability, and confidence. Driving the consumer value proposition is at the heart of what we do and a key part of our brand elevation journey. Of course, the most compelling product needs to be seen and touched by the consumers. For that, we have created a very clear roadmap for our go-to-market strategy, a strong cut-through ecosystem brand momentum to derive desirability, elevation, and consumer experience. That roadmap is inclusive of three pillars. The first one is our strong focus on our foundational products by resetting our core, increase full price sales within our key categories.
This is enabled by ensuring that the right price will be at the right place at the right time through brand-led tiering and our assortment building strategy that addresses the local needs and is informed by data and market research. Second, expanding our base with an elevated full price distribution. We will continue to expand within our top-tier accounts and channels, both in physical and digital marketplaces. We know our female consumer is highly influenced by online touchpoints. Our ralphlauren.com penetration over our total Polo woman business has doubled since fiscal 2018. As we continue, we will increase our exposure in these key online spaces and amplify our presence in influential accounts. Third, always-on social-first marketing which Iris walked you through. We will reach our target consumer and be top of mind for her.
We will strengthen the expression of Polo woman in store and online through enhanced presentation, stronger storytelling, activations, pop up, standalone stores for women, just to capture her attention and be top of mind for her. With this strategy in place, we expect to continue to see an accelerated growth in our women's business. We are confident that with our strong foundation and our clear roadmap, we will continue to build upon our recent momentum. Enabling all is our best-in-class global supply chain that is built for integrity, agility, and scale. Patrice talked about our supply chain, and later Jane will also refer to some numbers around our supply chain, but I didn't want to miss an opportunity to brag about it a little bit. We have built a future-ready supply chain over the last six years, and it's a key competitive advantage for us.
We are uniquely positioned to deliver high quality craftsmanship across luxury lifestyle products. From our Made in Italy programs, as you see on my left and right, that showcases high quality of attention to details and high quality craftsmanship. To our higher volume core programs that drives the sell-throughs, we work with the best partners in the world. We built and created an agile and resilient global network. We focused on our strategic and key supplier partnerships. We focused on diversification of our production, so no single production market today produces more than 20% of our business. We have created and duplicated capabilities in between markets, so we can shift in between markets when needed. This includes our nearshoring capabilities, which creates shorter lead time opportunities for each region, so they can chase as per the changing demand of our consumers. We have been building a data-driven value chain.
We are building future ways of working for our teams to increase the efficiency and effectiveness of our operations, and we've been digitizing our value chain to increase the visibility and real time decision-making, all while delivering on our global citizenship and sustainability strategy, Timeless by Design. During the last two years, going through layers of disruption in the intricate global web of supply chains, upstream, downstream, balancing agility, resilience, and purpose was a delicate act. There is never a dull moment in a supply chain person's life. As we've been focusing and securing execution short term, we managed to keep our eyes long term and continue to create long-term strategies and targets and goals for ourselves in Timeless by Design.
We have been doing this by integrating Timeless by Design into everything we do, like increasing the use of our sustainable materials, using circularity principles, and also supporting and enhancing female leadership on our factory floor. I'm very proud of all these three. They really showcases how we integrated Timeless by Design, both the philosophy and the principles, into everything we do. All these give us a resilient and agile supply chain that delivers high quality products that are always available. We have the best-in-class talent, we have the best-in-class partners, and our supply chain will continue to fuel growth and strong margins with, again, high integrity products constantly available. In conclusion, we have established clear competitive strengths that position us to win, not only in apparel, but in the broader lifestyle space.
These strategies served us really well, both in stronger macro or cyclical periods, and also enabled us to outperform during tougher periods for the industry. We have clear plans. They are proven and ready to implement. They are built on our timeless core business, our high potential categories, outerwear and home, and a significant growth in moments. With our strong foundations and plans, our products will continue to play a key role in our broader goal of becoming the leading luxury lifestyle company over the next three years and beyond. Thank you, and over to you, Corinna Van der Ghinst.
Thank you, Halide. We're gonna take a 30-minute break, roughly 30-minute break for lunch. Lunch is to your left on this side. I do encourage you to check out our gorgeous product displays on both sides of the room, but also on the right side of your room here. It might inspire your fall wardrobing. We will meet back here at 12:30 P.M. for the next presentations. Thanks.
Good afternoon, everyone. A free book, free food. Incredible insight into one of the world's leading lifestyle luxury companies, all before one o'clock. What more could we ask for today? You guys have heard this morning from Iris and David about our brand's incredible reach and resonance, and it's how it's driving connections with our consumers, and from Halide about our product, from icons to new categories, and how that's driving desirability. Well, Shin and I are here to talk to you today about another key component of how we're winning in the market. First, let me tell you a little bit about myself. I've had the privilege of working for Ralph Lauren for the better part of a decade, running operations of finance across every region. Living in China, Switzerland, the United Kingdom, and now the United States, leading the North America business.
In fact, I was part of the Ralph Lauren China team that helped develop the model I'm gonna talk to you about today. It was refined, fine-tuned, and implemented across every region, and it's an approach that we can and will scale because the power and appeal of our brand is much bigger than our business reflects today. I'm gonna give you a quick overview of where we stand, then I'm gonna walk you through the model a little bit, and then I'm gonna get to the part that I'm most excited about, and that's North America and how we plan on delivering sustained growth over the next three years. Where do we stand? We are reinforcing Ralph Lauren as a luxury lifestyle company. We have already built a diversified global footprint across North America, Europe, and Asia.
Our growth has been direct-to-consumer-led, as you've heard Patrice talk about, through both digital commerce and physical store expansion, where we can fully own the relationship, experience, and engagement with the consumer. Our direct-to-consumer business represents 63% of our total revenue. That's nearly a 600 basis point improvement from our last Investor Day. There's been a nearly doubled the rate of digital penetration in our own digital network, and we've opened over 450 full-price stores and concessions globally to better establish the brand in under-penetrated markets. Through our strategy of building brand-elevating ecosystems, we're now delivering growth in all three of our regions, including North America. Now, let's talk a little bit about the model. We call it our key ecosystem strategy.
The ecosystem is inclusive of our digital flagships and our virtual stores. Our physical stores, our flagship stores, our smaller format stores, which include our emblematic stores and our Polo boutique stores and our outlet stores. It also includes our increasingly elevated physical presence, both across the stores and the digital environments. The ecosystem hinges on five core principles. First, we put the consumer at the center of our design. That means however and wherever they shop, we show up in a consistent and cohesive way. The consumer is at the center. Second, each one of our touch points is connected. Might have missed a line, but I think they're all there. They're all connected, and this reinforces our brand message across every single touch point.
Third, digital is not just one of our channels, but it's embedded across the entire ecosystem, from how we leverage our consumer data to increasingly giving our consumers the ability to shop the entire Ralph Lauren product assortment through endless aisle, virtual stores, and virtual appointments. Fourth, we are directing our resources towards those cities that deliver the highest return on investment based on demographics, location, and influence. Fifth, our approach is gonna be globally consistent but locally relevant, from tailored product assortments to store presentations to how we engage with the local community. While each one of our channels play a distinct role, including our wholesale and digital partners, which are important from a brand discovery and share gains perspective, we're gonna continue to shift our business towards direct-to-consumer, where we can own the relationship, experience, and engagement with the consumer.
Let me take you briefly through those direct-to-consumer channels. Within digital, we've implemented a full suite of digital touch points, from our flagship sites to our virtual store experiences and our mobile apps. We have also integrated omni-channel capabilities to provide a seamless experience from online to offline, which you're gonna hear more about in a little bit from Janet. Our flagship stores. Our flagship stores are enabling the consumers to step into the world of Ralph Lauren, to feel inspired, to dream, and experience our world-class customer service and hospitality, like Ralph's Coffee, that really reinforces our lifestyle positioning. Flagships are also a critical starting point for relationship building with our top spenders. Hear about those top spenders from Iris earlier today. Our smaller format, full price stores.
These range from our emblematic store concepts that are 5,000-10,000 sq ft to our Polo boutiques that range from 1,000-5,000 sq ft. These are less capital-intensive than our flagships, but incredibly rich and brand-elevating experiences. They're particularly successful at attracting the new and younger consumer. These smaller format stores have a greater focus on productivity. Our hardworking fleet of outlets. For many of our consumers, the outlet is their local Ralph Lauren store, where they can engage with our brand and access our product. Over the last four years, we've learned that we can offer these consumers an elevated product assortment. Think less basic tees, more outerwear, more home, more accessories, and even customization.
Looking forward to the next three years, you're gonna see us continue to elevate this channel and this experience across product, presentation, and consumer engagement, all towards the goal of increasing the consumer's lifetime value. The significant elevation work that we've accomplished since our last Investor Day across our full price network has really enabled the beginning of the transformation of this outlet channel. Where are we gonna deploy the model as we look around the world? We've identified our top 30 cities globally for expansion. We have 14 of those in North America, 8 of those in Europe, and eight in Asia Pacific. These cities were selected because they're a center of gravity for our consumers for fashion and style, from a population perspective, GDP, and attractive household incomes. A few examples where we've already started to roll this out since our last Investor Day.
This isn't a new concept for us. As we look at Beijing, Shanghai, Milan, and Munich. What are we seeing in some of these cities? We're seeing outsized growth across each touch point. We're seeing growth for the ecosystem, and we're seeing the entire market lift as a whole. What's been exciting is, over the past few quarters, we've already started to roll this out in North America. As we look at Los Angeles, Miami, Chicago, Atlanta. One city cluster is not going to look like the next. For example, in North America, where we have flagships in Los Angeles on Rodeo Drive, Michigan Avenue in Chicago, Madison Avenue in New York. We're going to use our smaller footprint store format, our emblematic stores to really be a focal point of elevation and engagement for the brand in other cities across North America.
Within these ecosystems, we're taking a highly disciplined and focused approach to our new store openings, how we're leveraging consumer data, how we're looking at targeted marketing and communication, and more localized and nuanced product assortments. When we look at our store openings, we're targeting over 250 stores over the next three years, with over 200 full-price stores and concessions in Asia Pacific, 40-50 full-price stores and full-price partner stores in Europe, and 15-20 new full-price stores in North America. I want to be clear, this isn't just a retail square footage growth story. This is about the ecosystem. This is about the model I'm talking to you about. We have developed a clear and proven strategy, and the full-price store opportunities are just one touch point that's driving the overall ecosystem and overall market growth.
Now I want to move to North America, the region I'm looking after, which is inflected from a turnaround story to one of the most important contributors of Ralph Lauren growth over the next three years. Last time we came together for Investor Day, we were just starting to fundamentally reposition our brand. There were a lot of questions, a lot of questions from people sitting here today about our brand value and relevance, about where we were distributed, about our ability to command the luxury AURs that we were seeing in other regions. Well, I can stand here today and tell you the brand is strong, Ralph Lauren is strong, and our team's delivered. We elevated ralphlauren.com to be a true digital flagship and one of the best expressions of our brand, driven by full-price sales.
We reduced our wholesale door presence by almost 2/3 and completely exited the lower-tier department stores. We cut our off-price presence by more than half to reposition that channel as a true vehicle for liquidation. To give you a sense of the financial magnitude of this reset, AURs in North America up 68%. Full-price sales units up over 25%. Off-price units down 50%. Gross profit expansion of over 700 basis points. That's transformation. That's repositioning. The brand is strong, and Ralph Lauren is strong. The foundation has clearly been set, and we've already pivoted to growth in North America, with 49% growth coming out of COVID. As we move through fiscal year 2023, we're guiding to mid-single-digit revenue growth despite uncertainties around the current macro environment.
As I mentioned earlier, our ecosystem model is already working and delivering in some of our more developed markets like Los Angeles, Chicago, and New York. What are we seeing in these more developed markets in North America? We're seeing strong brand and luxury credentials. We're seeing increased rates of digital penetration. We're seeing outsized revenue and AUR growth. We're seeing a lower penetration of off-price sales. And importantly, we're seeing a higher number of new and younger consumers. I mentioned 14 cities in North America. These cities make up almost 2/3 of the premium market, enabling targeted expansion where our consumers shop. There is significant white space opportunities in and around cities like San Francisco, Seattle, Denver, to name a few. Contrary to popular belief, given our brand's wide range and appeal, we're still significantly under-penetrated in many cities in North America.
Consistent with our global approach, when it comes to new store openings, we are hyper-focused on the right location, the right environment, the right economics. This is an intentional and targeted approach as we move towards our goal of sustainable growth. Looking ahead, we have a clear path for growth across all of our channels in North America. This speaks to the growing strength of our brand, our compelling product, and our unique connection with the local consumers and a financially attractive expansion model. The underlying growth was already evident in our fiscal year 2022 performance and will accelerate as we move through the next year, three years. North America will be a significant contributor to overall company growth. Now let's take a look at the building blocks. Integrated digital commerce. Double-digit compounded annual growth for our integrated digital commerce. Retail expansion, 15-20 new stores.
The right location, the right environment, the right economics. We see 100 new store opportunities in North America. Low single-digit retail comp growth. Think about elevation, going into new home, accessories, customization, women's. Accelerated share gains in wholesale as we look across men's, women's, kids. North America is clearly pivoted to growth with broad-based strength across channels, geographies, and categories. We have elevated and repositioned the brand. We have a robust ecosystem that engages a wide range of consumers wherever they work, live, or play. All of this drives us towards our target of mid-single-digit revenue growth, compounded annual revenue growth over the next 3 years. While we sit here in a near-term, uncertain macro environment, we have proactively taken actions to mitigate that macro risk that Jane's gonna talk to us about in a little bit.
Regardless of the environment, our fundamental position and opportunity is clear. Our brand is strong, our product is strong, and our model is strong, and we continue to strengthen the quality of our consumer base as we shift towards more elevated channels and experiences. I wanna reiterate what Patrice has said and the team has said. Ralph Lauren has built a strong foundation, and we have a clear game plan, and we are poised to accelerate growth and value creation. What I'm most excited about in North America is we're just at the beginning of this progress. Next, you'll hear from Shin Hwee Chua, our Regional CEO of China and Southeast Asia. I fondly remember meeting Shin six years ago in Bangkok, Thailand, at the Mandarin Oriental for breakfast, to talk about the opportunity for Ralph Lauren in these very important markets for us.
Well, Shin has led the tremendous progress in our China business, driving exceptional levels of brand elevation and sustained growth. Now for more on what a further developed ecosystem model can deliver, Shin.
Well, thank you. Thank you, Bob, for that very warm, flattering introduction, and I still today remember your breakfast order, and it was Eggs Benedict. Thank you all and a very good afternoon to you all. For this section, as Bob mentioned, I'm here and proud to walk you through our successful key ecosystem model that was originally first developed and tested in the Chinese market. Some of you may know or many of you may know that we started a reset in China back in 2015 when it was still a small, unprofitable business, with the goal of repositioning China for a healthier, sustainable, long-term growth. That reset started by closing nearly half of our stores in the country, many of which these stores are brand dilutive, unprofitable, luxury flagships in undesirable location.
This allows us to essentially start from a clean slate. From fiscal 2018 onwards, we implemented a new expansion plan centered around six key city clusters. Sorry, this is six in Chinese, so. Focusing on the key principles of brand elevation, digitalization, and putting consumer in the center in everything that we do. As outlined in the last Investor Day, these six key city clusters includes Beijing, Shanghai, Chengdu, Shenzhen, Hong Kong, and Taipei. At that time, we set out a goal to open 150 new stores by fiscal 2023. As of today, we opened 135 new stores. Come on. Thank you. We are well on track to meet that target and also to exceed that target.
An important goal in this reset strategy was really to build the company's first digitally connected and led connected ecosystem. How did we do that? First up, we focused on owning what we can control, so we made it a priority to own and operate these ecosystems directly, which we believe is a unique advantage that has differentiated us from our peers in the market. We opened an average of about 30 stores per year. These are highly productive, smaller format stores, freestanding and concession, and each of these new stores satisfy our strict criteria of location selection within the six key city clusters and appropriate brand adjacency and, of course, meeting our profitability target.
Next, as we know, the consumers in China are very sophisticated and digitally savvy, so we knew from the get-go that we need to put on a digital-first lens so that we can expand into these clusters quicker. Hence, we partner and launch with powerful and big digital players in the market like Tmall, JD.com, and in 2018 we launched our China digital flagship site with social commerce enabled through WeChat. This marked our commitment to localizing the consumer experience. At the same time, we strategically invested to build various connected retail technology to tie the Ralph Lauren brand experience seamlessly across the physical and digital spaces. Finally, you know, I'm very proud here to say that we were able to execute on these plans fairly quickly thanks to a really highly engaged local Chinese team that has strong leadership and expertise locally.
The strategy, thank goodness, is delivering for us. Financially, it's working, as you can see from the screen. We're proud to deliver consistent revenue growth in the mid-teens%, and at the same time as we scale, we have gained operational efficiency and our margins grew significantly, and we were able to grow and contribute to both the top line and the bottom line growth for the company. With our commitment to brand elevation at every consumer touch points, we have been gaining momentum, and we have significant growth in brand awareness and strong consumer considerations. A true testament to our high brand equity and our brand positioning is really our AUR, which is the highest globally, and we've been improving year-over-year, and over the last five years it's a 45% increase in AUR.
We believe that this AUR growth will continue to be durable for years to come as we continue to execute our brand and progress and elevate our brand towards new and existing consumers to elevate them to our elevated luxury offering. As you can see, the strategy is delivering. Next, allow me to deep dive a little bit into the two approaches of this strategy. The first one, as Bob mentioned earlier, we want to be globally consistent and locally relevant. From the very beginning, we put consumer in the center in everything we do, so this allows us to weave our brand's DNA into the local culture successfully. From a product perspective, we have local merchants who worked hard to understand each cluster, their specific nuances, so be it seasonality, size, curves, color, material.
Each cluster have their unique tailored assortment best fitted for their needs. Next, in terms of communication, we complemented beautiful global campaigns with localized content that were created specifically for the important cultural festivals and events such as Lunar New Year, Chinese Valentine's Day, Qixi. As you can see from the screen here, this is our Family is Who You Love campaign, which is inspired by our holiday campaign, and this was created specially for this year's Lunar New Year. To further amplify the brand locally, we leverage local celebrities and key opinion leaders or key influencers to create content specifically for different platform, from Weibo to Douyin to Little Red Book. Here we nurture a pool of key influencers who are friends of the brand, and these friends have authentic, strong relationships with us, and they are able to express their true appreciation and strong advocacy for the brand.
In this way, we build long-lasting partnerships with voices that resonate with the local consumers. The second key approach that I want to mention is the digital-first approach. As you have heard, I've mentioned, we put a digital lens on in everything that we do. Digital not just provide us with nationwide e-commerce coverage and brand reach, but it also enables us to build a strong foundation for ecosystem connectivity. I'm gonna share with you three areas of connectivity that we have built. Connecting people, connecting inventory, and connecting places. In connecting people, we make use of a tool called WeChat Work, which essentially is a e-clienteling tool, and it enables targeted communication based on data science and analytics, and it provides a platform for sales associate to connect with their VIC 24/7. It's very convenient. This helps to drive higher sales conversion.
Really, this became a really big asset for us as we navigate through multiple COVID lockdown over the past few years. In connecting inventory, we use a tool called ShopDoc. Essentially, this is what in America we call BOSS, which is buy online, ship from store, and this today contributes to 20% of our digital business. Finally, in connecting places, we have several tools here, but I will zoom into live streaming. Live streaming really is a powerful platform that helps to amplify our brand storytelling. We have celebrities and key opinion leaders that are filming from our stores, and we telegraph this, and we put it online. This tool basically helps us to increase our brand reach, fan base tremendously across all digital platforms. The digital connectivity and our brand momentum are driving significant outperformance versus our peers.
Although we just launched our digital sites and partnership 5 years ago, and our digital business have been accelerating at an incredible speed of 100% CAGR. 100%. In the last event in Tmall, which is the 6th event, 618 event, and also in the last quarter, we became the top 5 apparel brand on Tmall Luxury Pavilion. We see digital spaces not just as a growth driver for the future, but also as a key accelerator for brand elevation, consumer engagement, and acquisition. Through these approaches, we are seeing that we're attracting a younger consumer, which is significantly lower than our global average age. Nearly half of them are Millennials and Gen Z, and these younger consumers are definitely more discerning, more brand conscious, and more affluent.
I can say that firmly today that our reset in China is complete, and we have established multiple strong pillars of growth, and we're well on track to our next chapter. In our next chapter of acceleration in China, our focus is really on two things: continuing building higher brand desirability and luxury credentials in China. Over the next few slides, I will illustrate how our new emblematic store concepts in China further elevate our ecosystem and create a halo impact and uplift to the total ecosystem. For these emblematic stores that I will show you later, we really have reimagined and enhanced the overall shopping experience, giving store visits new purposes. Let's have a look. Let's go to first Beijing. Beijing Sanlitun store was opened in April 2021. Was still in pandemic.
This mall is one of the most visited places in Beijing after the Forbidden City and the Great Wall of China. This mall is also a key fashion hub for Chinese brands, and also for international brands like Apple, Nike, and many luxury brands, international luxury brands, to build their iconic flagship stores. Here we apply our localized knowledge and discipline and develop our first emblematic store concept. First up, central prominent location. You saw from the video earlier, it's right in the center of the mall. It is essential for us to appear central and prominent to establish our brand as a powerhouse in the Chinese market. Secondly, with consumer at the center, we assort and design the store. This is a world of Ralph Lauren store with mainly Polo labels, as we are targeting a younger and more fashion conscious consumer.
In keeping with the concept of experience, we launched the first Ralph's Coffee. Finally, with our digital first mindset, this store we partner with Tencent to develop a full suite of smart retail capability and modules. Here you can see from the screen we have AR fun camera, RFID endless aisle, mobile create your own app, and also we have a WeChat online ordering and loyalty scheme for our coffee business. Really, this helps us to bring the unique world of Ralph Lauren experience to life, both in store and online. All right, let's go to Shanghai. Located in Jing'an, which is Shanghai's key commercial district. You'll see a 5m tall pony player 17 ft for America. This pony logo is visible from one of the busiest traffic junctions in the city. Here we reapply the success model from Beijing.
With consumer in the center, this store was tailored for a more affluent, more sophisticated, more elegant luxury consumers with our luxury labels and our coffee offering. Likewise, the smart retail modules that we have created and the brand communication plans that we have tailored to that elevated consumers. Okay, now let's move over to the west, to Chengdu, one of my favorite city in China. Chengdu, I think a lot of people think of it as, you know, a place full of panda bears and spicy hot pot. Well, really it is, but it's also known as the youth capital of China and leads China's lifestyle trend. Over here, our journey continues with our third successful launch May this year.
This store, once again, has a central location in the Taikoo Li Mall, which is a unique luxury retail mecca at the heart of Chengdu's fashion and dining scene. Once again, you can see from the video, we have designed yet another dynamic, beautiful, unique, localized experience that truly express the Ralph Lauren lifestyle. This store has many firsts. Trust me, it was a challenge when we bring it to the designer, but they deliver on such a beautiful execution. Thank you, Karen. This store has many firsts, and basically it was the first dedicated Double RL brand store in China, the first Polo Originals store, and the first Ralph's Bar in Asia. Again, our smart retail modules, our brand communication really target at these young lifestyle driven consumers.
This third emblematic store firmly established Ralph Lauren as a strong dynamic player in the luxury lifestyle space in China. We're so pleased and so proud to say that three emblematic stores opened during the pandemic are all trading above expectations in terms of both sales and profitability. We are even more encouraged with the uplift to the total ecosystem. We've seen digital sales in these ecosystem accelerated, and we have seen no cannibalization of physical stores nearby. With that, you know, we're well on track for our next great chapter of growth in China, and we have established strong, solid fortress foundation and we are reaching scale. Our vision of building key city ecosystem that is digitally connected worked. We successfully built stronger brand desirability, higher brand positioning with strong, sustainable AUR and profit growth.
Our model is proven to be resilient through multiple COVID challenges and lockdowns, and we continue to deliver on growth and expansion. More importantly, this model is translatable to other markets around the world, and especially in Asia. This is the reason that I'm here today, the spotlight for China. Looking ahead to fiscal 2025, we will continue to execute against the next great chapter strategy. While we are committed to grow our footprint of 30 new stores a year, again, these will be small format stores, full price stores with a handful of emblematic stores to drive brand halo across the ecosystem. We are expected to grow at high teens yearly with sales accelerating, of course, faster in mainland China and also our digital business. We know the market is dynamic.
We know that there are headwinds with COVID, but we remain committed to investing in the long-term brand and business momentum in China as it is one of our multiple vectors of growth for the company. As Patrice said, we're here for decades, and hence we're very deliberate in our approach. We are ambitious but smart. We're balancing speed and quality. You can see that our playbook is firmly in place, and we're confident that we will continue to excite and engage the Chinese consumer all around the world. Thank you. With that, I'm gonna introduce to you Ms. Janet Sherlock. She's the Chief Digital and Technology Officer, and Janet joined the company about five years ago as we reset and expand into China.
She and her team have been incredible partners to enable our countless digital initiatives in China, and I look forward to continue collaborating with you, Janet. Thank you very much. Over to Janet.
Thank you, Shin. It has been such a pleasure working with you and your team, bringing those connected retail experiences to life in China and throughout Asia. Wow. It's examples like Shin's that show just how far we've come in the past four years. I am pleased to spend the next several minutes going more deeply into the progress that we've made on our commitments on digital. First, let me tell you why we're investing in digital and why when we met four years ago, leading with digital was one of our key strategic pillars. It's because at Ralph Lauren, we believe that connected retail is the future. I'm not talking about the definition of omnichannel from years gone by. I am talking about creating truly connected experiences where there is no online or offline consumer. There are blended experiences for everyone.
Digital isn't just a channel for us at Ralph Lauren. It's an enabler, enabling us to connect more deeply, intimately, and powerfully with our consumers. Now, we've had some catching up to do since last Investor Day, but I am pleased to say that we are pulling away from the pack with our digital capabilities and offerings. As you've heard for the past two hours, we are immersing digital in everything we do, and the progress speaks for itself. Since last Investor Day, our digital business has grown $1 billion, more than double our $500 million commitment. Woo. Digital now comprises 26% of total company revenues on a sell-out basis versus 12% in FY 2018. Since then, operating margin in our owned and operated sites is up over 850 basis points.
Digital is now accretive to the profitability of every region, and it's also comparable to our wholesale margins. This is a major unlock for us at Ralph Lauren because it gives us the flexibility to engage with our consumers, especially next gen, wherever they're getting their inspiration or choosing to transact. Let's get into the specifics of our digital ecosystem. Our digital ecosystem is represented by our owned and operated sites, wholesale.com, and digital pure plays. It's roughly evenly balanced across those channels, each with their own unique and distinctive role to play. Let me start with our owned and operated sites, which begin with our digital flagship, the very best expression of our brand digitally. This category also includes our Ralph Lauren app as well as our social commerce partner, platform partnerships.
As Bob said earlier, we are focused on owning that direct-to-consumer relationship, so our owned digital channels are key to that strategy. Next, we look at our digital pure plays, which use a little bit of scale to engage a new, younger, and more fashion-conscious consumer. We've launched our presence on NET-A-PORTER and continue our elevation journey with partners like ASOS and MR PORTER and Farfetch. Our wholesale.com channel leverages the scale of very well-known stores to reach consumers. We've recently launched with partners like KaDeWe in EMEA, and continue to deepen our relationship with key existing partners like Selfridges and Breuninger and Macy's in North America. To support our strategic growth drivers that you've been hearing about for the past couple of hours, we've made significant investments in our digital capabilities. First, we've made investments in our digital studio, asset development, and content creation.
All this is in doing what we do best, storytelling and bringing Ralph's vision to life digitally through elevated styling in our product and our lifestyle imagery. We now more vividly showcase fits and fabrications on our digital flagships with additional product content and rich product videos. All this helps the consumers to be guided in their purchase decisions and drives conversion. As you've seen behind me, we have these beautifully curated brand shops that feature key looks and capsules and product innovations. Why is this important? It's because on average, consumers who engage in our storytelling content spend over $100 more per order than our site's average order value. Content not only elevates and energizes our brand, but it drives sales and profitability.
Not only are we supporting our core products and our underdeveloped high-potential product categories with rich photography and videos and with storytelling, we're also creating digitized content and experiences for every Ralph Lauren product. Nearly all of our garments will be tagged with these digital product ID codes. Consumers can scan these codes from anywhere, from our stores, from department stores, or from their very own closets. These tags provide consumers peace of mind regarding the authenticity of their Ralph Lauren products. In addition, they're able to access additional product information like technical or sustainability features. We capture the geolocation of each scan so we know exactly where consumers are engaging with us. Soon, consumers will be able to add the products that they've purchased at their favorite department stores into our connected retail virtual closet, which we call My Wardrobe, using this digital product ID technology.
Connecting each product with each consumer across each and every channel, that's connected retail. In order to win in the market with our consumer ecosystem, we needed to make some investments in our digital infrastructure. Our e-commerce channel is now complemented by a new front-end platform, back-end order management system, and full integration across direct-to-consumer channels, very carefully architected to create seamless connected retail experiences. We've also made investments in machine learning platforms to assist with areas like personalization and order fulfillment optimization. Like Bob shared earlier, digital is the surround sound for our top city ecosystem model. Our new platforms deliver full connected retail capabilities like buy online, pickup in store, digital clienteling, and endless aisle capabilities that allow consumers to shop the world of Ralph Lauren across channels, driving consumer lifetime value.
Our platforms also enable inventory accessibility options too, like leveraging store inventories to fulfill e-commerce orders, like Shin mentioned earlier. Those capabilities also include being able to use stores for fulfilling same-day delivery orders. These infrastructure investments provide us leverage, true leverage to be able to nimbly and quickly expand the seamless reach of our ecosystem. As a result, we've been able to launch localized sites across dozens of markets in EMEA and Asia Pacific. The foundations and investments that we've made in our content and in our ecosystem have not only helped us to achieve the revenue and profitability success we've achieved to date, but they also paved the way for our forward-looking plans.
Looking ahead, we expect our digital ecosystem, which comprises our owned and operated sites, wholesale.com and digital pure plays, to drive a CAGR in the low-to-mid-teens% over the next three years. On a sell-out basis, this represents approximately 1/3 of total company revenues up from 26% in fiscal 2022. How are we going to continue this momentum? Well, we have a multitude of engines to drive our growth, leveraging the building blocks that we've already created, specifically focusing on enhancing the performance of our digital flagships, on connected retail, and on new and extended partnerships and platforms. There is still a lot of white space and potential in our digital flagships. First, we're gonna continue to launch localized sites.
In addition to the sites we've already launched over the years and last month's digital flagship launch in Korea, this includes launches in Taiwan, Canada, Singapore, and Malaysia. We're gonna continue to add ship-to destinations across the globe, including 16 different countries in Latin and South America. Based on the tremendous success that we've had with our full catalog Ralph Lauren app in North America, we're going to launch that catalog app in EMEA as well. We are excited to expand Ralph Lauren's lifestyle proposition by continuing to add products and expand upon our lifestyle proposition of our home flagship.
It's so luxurious, and we're going to be adding new features and functions, including customized capabilities as well as well as be able to add features for our key trade partners, for our home business. In addition, we're going to continue our optimization of personalization on-site search and site experiences. All this is going to drive guided selling, and also we're going to be able to utilize test and learn capabilities across our site. What does all of this mean? There is a lot more to come. We have additional flagship launches, additional apps, new product offerings, and optimization across our digital flagships, all to drive incremental sales and profitability. Like most specialty and luxury retailers, we've created this table stakes connected retail capabilities, several of which I referred to earlier.
Where Ralph Lauren is excelling in this space is with the intricacies between the consumer touchpoints. We meticulously map consumer journeys for seamless, connected experiences across channels. We are focused on trading every consumer into a multi-channel consumer. As Patrice mentioned earlier, our multi-channel consumers spend 4x as much with us than a single-channel consumer, 4x . When you consider the size of our consumer database, well, that is tremendous opportunity. Consumer devices, our stores, our apps, our e-com platform are all interconnected. For example, a consumer's wish list is also available to them in our stores and can be available to their stylist, who can reach out to them with curated looks on customized pages on our e-commerce platform. These are just examples of some of the journeys we've built, and we're gonna continue to build to drive those valuable multi-channel sales.
Our connected experiences extend well beyond our own digital landscape. We have many opportunities to attract a new generation of younger consumers and places to recruit new high-value consumers. As you heard Iris say, we've developed many strong relationships on virtual and social platforms. From a social commerce perspective, Ralph Lauren was one of the very first fashion apparel brands to launch on Instagram Checkout in early 2020, and we're continuing to add revenue-driving social commerce opportunities on platforms like TikTok and other platforms. Ralph Lauren has proven itself a leader in augmented and virtual experiences, like our virtual stores and AR offerings. We've recently launched AR and virtual try-on across dozens of products on our very own Ralph Lauren app. In addition to driving engagement and driving repeat visits, we've learned that AR increases conversion rates over 40% higher while decreasing product returns.
We've partnered with Snapchat to co-create unique virtual try-on experiences on their platform, including this amazing full-body virtual try-on of our Wellington handbag. Here we've used advanced gesture recognition technology that allows users to point without even touching their phone to change their product selections. This innovation brings a whole new dimension to AR that encompasses fit, styling, and intuitive control. I bet there's a lot of Snapchat users here. If you haven't tried it, you definitely should. The Wellington handbag would look amazing on you. We have so many more AR and VR experiences planned to immerse consumers in the world of Ralph Lauren.
Speaking of immersion into the world of Ralph Lauren, as you're likely aware, or if you weren't before, you know it today, Ralph Lauren has been at the forefront of creating immersive experiences in the metaverse and in the creation of virtual digital products. We don't approach the metaverse or these areas because they're trendy. In fact, if you think about it, Ralph Lauren has always been about stepping into new worlds, into new dreams, and that's why we've entered the metaverse boldly and authentically over the past four years. As you've heard, we've got very successful activations on platforms like Roblox and ZEPETO, and with Snap with our Bitmoji offerings. Stay tuned. We have many other exciting metaverse launches planned, and we also have NFT projects and a crypto wallet under development.
We are all very highly confident in the potential of the Metaverse, not just to engage with next gen consumers, but to also drive new revenue streams for us. Because we have the ability to take our unique talent for content creation and storytelling and apply it to our leadership position in connected retail to create experiences that traverse physical, digital and virtual worlds. We've undergone a tremendous digital transformation since last Investor Day. Earlier I said that connected retail is the future, where every consumer interaction is going to be a digitally enabled one. Through thought leadership, strong partnerships, and innovation, we are going to thrive in that future, connecting more deeply, intimately, and powerfully with our consumers as a result. Now let me turn it over to our Chief Operating Officer, Jane Nielsen who most of you already know.
I am probably one of Jane's biggest fans, not just because she hired me five years ago, but in addition to her intelligence and wisdom, what I admire the most about Jane is her passion. Her passion for this brand, this company, and most of all, the passion for this work that we're all doing here. Thank you, Jane. Over to you.
An incredible journey, Janet, that you and the team have led. We reap the benefits every day. It is so great to be back with you all here and in person. I hope you feel what I feel. It is an exciting time at Ralph Lauren. A little over four years ago, we shared with you an ambitious plan to put our company on a healthy foundation and a path to sustainable growth and value creation. Here on this stage, I shared with you a story about a farm that's been in my family since the 1920s in Southern Illinois, and how my grandfather faithfully worked the soil to make sure that his crops grew every season and every year. How he demonstrated through his commitment that there really is no substitute for hard work.
Since that time, we have put in that hard work. We fundamentally elevated and evolved every facet of our business, from brand positioning to product to elevating our distribution. We've done that work so that today we are strategically positioned to accelerate our growth, to accelerate our value creation, and more importantly, to sustain it. Let me take you through some of the highlights of our work. We increased our brand desirability, strengthened our luxury lifestyle credentials, and added 20 million new consumers. We invested in our products and raised our price value proposition with our consumers and grew our AUR 64%. We elevated our store experiences and exited brand-dilutive distribution while adding over 450 new stores and concessions.
We created high impact digital flagships, thank you, Janet, and substantially improved the profitability of our digital business so that it is now accretive to every region that we operate in, and that the digital ecosystem now accounts for 26% of our total sales. We're proud of our team's work. We're proud of the execution, and we're proud that we were able to return $2.3 billion to our shareholders. Today I'd like to take you through our superior operational capabilities. It's a passion for Halide, and it's a passion for me. Then I'd like to turn to our growth and profitability building blocks, and finally, now that you've been waiting for it, but I'll talk about our future growth outlook and our capital allocation principles. I wanna start with superior operational capabilities.
Our operational capabilities have unlocked substantial value creation, and I'm only gonna highlight a few examples for you. First, we've built an agile and responsive supply chain, so that two-thirds of our product is now on lead times of 6 months or less. That's a substantial over delivery of the 50% on 6 months or less that we promised you last Investor Day. We've done that through initiatives like fabric platforming and 3D design that Halide talked a little bit about. We've made absolutely great progress on being responsive, and that responsiveness has showed up in our disciplined inventory management. Our disciplined inventory management is based on a simple principle. We wanna have the right product at the right time for our consumers.
Now, this has included sharpening our inventory planning and better on-time delivery because this means we can maximize full price selling and minimize end of season excess. We achieve this by driving faster chase capacity on 20% of our core products. That means that we can fast chase up to 20% of the total volume of our core products. We achieved this with the faster chase times and a really complete process redesign led by our supply chain. We shortened e-commerce processing times. This has resulted in less holding times for inventory and lower shipping costs, all while delivering to our consumers faster so that we've taken down click-to-delivery times by 38%. Third, we've streamlined our cost structure, delivering over $200 million in value. We reduced our corporate inventory, our corporate headquarter structure.
We also exited non-core brands, and importantly, we realigned our organization to our key strategic growth pillars. This has given us the fuel to fund our investments in brand marketing and in capability building. Like all real progress, the work starts with the team and the culture. The team has done an incredible job of embracing operational discipline and built a real productivity muscle, and that muscle is here to stay. Now, before I turn to outlook, I wanna give you a quick progress report from a financial perspective, of course. Let me start with revenue. A critical part of our elevation journey has been exiting $700 million of brand dilutive revenue. It was comprised of things like off-price wholesale, low-end department store volume, digital grey market sales, and non-core brand volume.
We have been intently focused on not just replacing that revenue, but fundamentally rebuilding it with higher margin product and higher quality sales. We've done just that. At the end of fiscal year 2022, our volume was slightly ahead of pre-pandemic levels. On this higher quality revenue, coupled with brand elevation and a multi-pronged approach to pricing, our AUR is up over 60%. This has been the most important driver of our gross margin expansion, and we've expanded that gross margin by over 560 basis points. In operating margin and in operating expenses, we nearly doubled our marketing investment, so that today our marketing investment is at about 7% of sales. Again, almost double the level that when we stood here last with you at Investor Day.
We did that by at the same time that we expanded our operating margin by 240 basis points. In addition, we grew operating profit by 20% on about the same revenue base, despite meaningful COVID headwinds. With this performance, as I mentioned, we returned $2.3 billion in cash to our shareholders. Our reset is complete. I wanna be clear, the past four years has been about more than a cleanup story. We have been planting the seeds of future growth. They've given us momentum, and they've enabled our pivot to offense. As you've heard today, we're focused on three pillars of strategic growth. As any good farmer knows, a well-tended field and planting strong seed stock may not ensure a great harvest. That takes preparation, it takes resourcefulness, and it takes dexterity.
From irrigation to hay baling the river levees, my grandfather prepared for change, some known and some unexpected. We, too, have built planning, agility, and resiliency into our business. They are our fortress foundation Patrice described. When combined with our major building blocks of growth, they deliver accelerated growth. Let me take you through it. Let's start with today. Because we have a fortress foundation, and because we have a proven track record, and because we have momentum, we are reiterating our Fiscal 2023 guidance from our Q1 call. We're keenly aware of the volatile macroeconomic environment, but believe that this still represents a balanced view of our fiscal 2023 performance. This year's 8% constant currency growth is at the high end of our three-year outlook, but we are introducing a new three-year guide of mid- to high-single-digit top-line volume growth in constant currency.
This is a step change in our outlook versus last Investor Day, where our outlook was low to mid single digit growth. With our accelerated growth, we expect our operating margin to continue to expand to about 15%, about consistent with our previous guidance. Importantly, as you've seen today, this is a diversified plan with multiple engines of growth. Let me take you through them. Starting with the top line, our growth is driven by our elevated consumer base with high value and loyal consumers. It'll continue to grow with our accelerated new consumer recruitment. It's comprised of both AUR growth and targeted unit expansion, all focused on what Iris called out, all focused on driving consumer lifetime value. That's our growth algorithm. Let me take you through the components of growth.
From a regional perspective, you'll see that each region is now targeted to deliver an accelerated level of growth from where we were at last Investor Day, with the biggest change coming, Bob, in North America, our largest market, turning from a drag on our algorithm to a solid mid-single digit annual growth rate. North America will be our most significant dollar driver of growth. Europe is expected to grow mid to high single digits, up from mid-single digits at last Investor Day. This outlook is really based on our strong and elevated DTC distribution footprint, our high-quality wholesale partners, and continued growth in digital pure-play partners. Overall, we still see strong long-term growth in Europe.
We have opportunities in Germany and Italy, where we still have significant white space for store expansion. However, our guidance does contemplate a more challenging, weaker consumer environment in Europe in the coming fiscal year based on the current macroeconomic headwinds. Lastly, in Asia. Shin took you through a part of it. Jay Kimpton, our head of Japan and Korea is here. Guys, together we're stepping up Asia growth to low double digits, up from high single digits previously. That's really based on our strong brand positioning, strong momentum across multiple countries in Asia, and significant runway for DTC expansion. Let's take a look at our revenue growth by channel. All channels are expected to contribute to our growth.
This will be led by digital, which will continue to be our growth accelerant, as Janet called out, and our full price store expansion across every single region, and market share growth in our repositioned wholesale business. That in total digital, both owned and wholesale, is expected to grow low- to mid-teens% over the next three years. This is where our consumers are shopping. This is where we can communicate with them directly and personally. It's where we'll leverage our innovation for new user experiences, and I promise you, so much more. In our brick-and-mortar, we now expect to grow mid-single digits% through a combination of comp growth and new store growth. As Bob laid out, our plans call for at least 250 new elevated stores across all three regions, where we still believe we have significant white space.
Finally, in wholesale brick-and-mortar. We expect wholesale brick-and-mortar to grow low- to mid-single-digit . We've done the work to reposition those channels, and the most significant change is going to come in North America. North America has pivoted to positive sell-out with strong positive AUR growth. We're growing share across men's, women's ready-to-wear, and kids. Really, this is the best position we've had in North America wholesale in a very long time. Let's take a look at gross margin. We continue to expect gross margin expansion over the next three years with drivers that'll be about similar to what you saw over the last four years. Pricing and promotion will continue to be our most significant contributor, with pricing to offset inflation and promotion effectiveness driven by a combination of personalization and targeting that Iris talked about.
Then you'll see an ongoing elevation of our product mix and continued contributions from channel and geographic mix and productivity, so that you'll see expanded gross margin over the course of our plan, and our guidance has incorporated the investments that we'll make in product quality, the investments that we'll make in sustainability, as well as headwinds in input cost inflation and labor inflation. That taking all those factors together, coupled with our multi-pronged and proven approach to pricing, you'll see sustained gross margin expansion, albeit at a more moderate rate than you saw in the last four years. Our superior operations are a foundational part of our culture, and we've worked to institutionalize it over the last four years and have a broad range of productivity initiatives. This productivity is key to fueling our future growth.
In total, we expect to deliver gross savings across COGS and operating expenses over the next three years of about $400 million. Let me give you a few examples of what we'll drive in productivity. First, we've created a new integrated business planning organization to further improve inventory management, reduce excess, and streamline our planning processes. Second, we have a dedicated cross-functional team to systematically address our vendor costs. That team's been in place for the last four years, and they are dead reliable and capable of delivering significant savings year over year over year. Finally, we're leveraging data and analytics, not just on the front end that Iris took you through, but also on the back end in things like size curves and order fulfillment algorithms.
All of those things combined. This will fuel necessary investments in elevating our brand, building out our digital and store infrastructure, enhancing further our data and analytics, and building our people capabilities. Importantly, these initiatives save money, yes, but they also make us better. They're a part of what we've done to drive operational excellence and executional excellence. Where does that put us from a profitability perspective? We are guiding for further operating margin expansion to 15% plus. Corey, did I emphasize the plus a lot, enough? Okay. 15%+ by Fiscal 2025. It's a combination of modest gross margin expansion and operating expense leverage. Now, we're not putting a ceiling on 15%, but we're mindful of both the investments that we need to make and the current business operating environment.
In addition, we plan to deliver operating profit growth at an average annual rate ahead of top line growth. We remain committed to investing in our brands and our strategic drivers to deliver value for all our stakeholders over the long term. A key enabler of this, yesterday and today, is a strong balance sheet. Ralph, you inspire us in so many ways, even in our capital allocation principles. You've created this incredible brand. It's been here for 50 years, and we will have the balance sheet to ensure that we can invest in the business for the long term so that we're here for another 50 years plus.
With these capital allocation principles, we're really encouraged by our $1.8 billion in cash and short-term investments at the end of Q1, our disciplined inventory management with a higher penetration of our core product, and our powerful cash flow and cash conversion cycle. Our capital allocation priorities are consistent with what you saw during our last Investor Day. With our first and most significant priority to invest in our business. We'll spend about 4%-5% of our sales in CapEx to build new stores, renovate our stores in digital infrastructure. Our second priority is to return excess cash to shareholders, first with our dividend, and you can expect our dividend to grow with durable net income. We'll be keeping our payout ratio about consistent to where it's been in the past and the remainder in share repurchases.
Over the next three years, we expect to return $2 billion to shareholders. Third, our debt leverage will be closer to our historic levels at about 1-2x EBITDA. Finally, the strength of our balance sheet gives us the flexibility to selectively pursue M&A with a focus on advancing our operational and digital capabilities. Now, it's important to note that none of the goals that we've called out today are premised on doing an acquisition. We wanna be opportunistic if we find something that's in the long-term interest of our business, that builds our capabilities, and importantly, delivers true value creation. You've seen us do a few things like our minority investment in NFW, or Natural Fiber Welding, which gives us access to recycled high-performance cotton. It's an interesting investment. It builds our capability.
Those are a good example of the type of thing we're looking for. I wanna be clear, our focus is on the Ralph Lauren brands. We have so much opportunity. Let me bring this together from a financial perspective. Our next great chapter accelerate plan will deliver accelerated growth and operating margin expansion. It's driven by a combination of gross margin expansion and operating expense leverage. Our top line growth is accelerating to mid- to high-single-digit growth. That growth will be driven by every region, that growth will be driven by every channel, and that growth will come from core and high-potential categories. In the last few years, we've learned a few lessons, and if it's taught us anything, it's that change is now constant.
Our guidance range contemplates a range of scenarios, a more challenged macro environment across all three regions on the low end, and a more normalized macro and operating environment on the high end. Our gross margin is going to expand modestly about 50-100 basis points on top of the nearly 600 basis points we've already delivered. Of course, this is all driven by continued elevation of our brand, pricing to offset inflation, productivity across our businesses, and product mix enhancements across channels and geographies, all coupled with what I called out in terms of efficiency gains. On operating expenses, importantly, our reset is behind us, and we're at a pivotal point in the company where we are seeing the growth from the seeds that we planted starting to scale, and we're reaping the benefits of that scale.
As a result, operating expense leverage will include the marketing investment that we're at today, about 7% of sales. Of course, we can flex that up and down depending on the operating environment we're in. Let me just say, our targets are ambitious, but we have a strong record of delivering during turbulent times. Let me share with you some of the key elements that give me confidence in our ability to deliver into the future. We have a unique and timeless brand with increasing desirability. We have an elevated and growing consumer base. We have multiple engines of growth, each tested and in the process of scaling. Our operating discipline will allow us to fund brand elevation and growth into the future. We have a strong balance sheet, and we have a clear-eyed view of the current market environment.
Our fortress foundation gives us organizational agility and resiliency in volatile times. All our goals reinforce our position to be a leading luxury lifestyle company. If I can take you back to my farm in the Midwest, we've done the hard work. The ground is tilled and rich. The seeds are planted and growing. This is not our first growing season. Our team is experienced, united, and ready to meet the challenges ahead. I know that our best harvest is in front of us. Thank you, and I'd love to turn it over to Patrice to bring us home.
Thank you, Jane. First, thank you for your awesome partnership. Second, it's been five and a half years, and I'm still inspired by these farming metaphors. Listen, before we jump into the Q&A, actually, today would not be complete if we didn't have the opportunity to hear from the person without whom none of us would be here today. You heard David earlier tell the story of Ralph with his mother and his wife, Ricky, in the apartment in the Bronx, putting labels on those new Polo ties. The journey that's been established since that moment to now, this company being a leading luxury lifestyle company, is absolutely awesome. Ralph, the dream that you laid out, that you created first for yourself, has inspired hundreds of millions of consumers around the world.
We were gonna say billions, but I'm not sure we have the data support for billions, but it's probably billions as well. Certainly billions in the future. I know the group would love to hear from you now. If you could join me here.
Okay. All right. All day long, I'm limping around and, this made me not limp anymore. It's amazing. This is not the serious time 'cause there's no speech prepared here for this. I must say, I am the largest shareholder in this company, and I'm very proud of it. I'm very proud of it because the team here is amazing. This is amazing. I've been around, and I've seen other companies, and one thing I do know is name doesn't matter who's cooked up the brew, if you don't have a great team, you're not gonna have a company. This is a great team. This is a team that is so impressive. Charles asked me, "Would you buy into this?
Would you buy more stock if you could?" I said, "Yes, but now is not the good time." Now this is a good time. This is. You wanna know when things happen is when things are bad and people have the guts to hold on to who they are and to believe in what they are. That's the time, and that's what this company has. This is not. I'm not here as a hype. I'm not here. Ralph came to pump us up. I'm here 'cause I love to be here, and I'm proud of the team that we have here, and you all look so cool, and the voices that come out of here and the professionalism is so infectious and strong. I hope you appreciate it, and I just thank you so much. Patrice, you. This is more than four years.
You and I have spent a lot of time together talking, and I hear the connection, and I'm so impressed by the team and by you. You've done an amazing job, and you've put this company in the right place. This is really wonderful to see, 'cause I know, you know, I've been in other companies a long time ago, and I've watched. I remember going to my boss. I sold gloves in a store, and I thought I had ideas to make a new tie. I went to my boss, and I think I was about 25 years old, and I said, "I wanna design. I have an idea to do ties," you know, wide ties, you know.
Well, he said, "The world is not ready for Ralph Lauren." I left the company. I felt sorry for the company that left because I turned out to be pretty great. Just know that, I don't go out and around and do this, and I don't get paid for this, but I must say that I hope you understand what it is to feel what I feel, that when you get up to go to work in the morning, you're happy. You're happy to be with other people and friends, and you look forward to going to work because the people around you are smart, and they're loving, and they care, and you enjoy that. There are not that many companies that have that. This company has a heart. It has a soul. It has a power.
I thank you very much for being here. I love you. I love that you're here, and I hope that you have a great future together and with us. Thank you.
Thank you, Ralph, for those words of inspiration, as usual. I know I speak on behalf of the entire team when I say we're so grateful for your constant inspiration and support and presence and engagement. We and the world are lucky to have you. Thank you. Okay, Corinna, over to you for Q&A and break, or maybe the other way around.
I know we're all eager to get into Q&A, so we will meet back here in five minutes to resume, and I'll collect my feelings here, and we'll meet you back here in five.
No? Test, test. Okay, there we go. Ladies and gentlemen, we're here to start the question and answer session. I just want to lay out a couple ground rules before we get going. We have a lot of talented members of our executive team on the floor today. If you could, for the benefit of our webcast friends, direct your questions to the folks on stage, that would be much appreciated. You are going to stand, state your name and company, when we bring you the mic, and if you could please limit your question to one per person, so we can get to as many of you as possible. Let's go ahead and get started. Let's see who has a question. Let's start with Matthew Boss in the middle table up front here.
There's a mic.
Great. Matt Boss, JPMorgan. Thanks for a really great presentation today. Maybe Patrice, with so many moving parts in this retail macro backdrop, could you give us an update on how you're thinking about the current context that we're operating in, and what exactly gives you confidence that the plan is achievable in this challenging backdrop? Jane, as a follow-up on your target for the 15%+ constant currency operating margins, maybe just elaborate on the potential plus.
You have a couple minutes to think about that. Hey, Matt, nice to see you. Thanks for being here in person today. A few things I would say. First of all, hopefully, you took away from our presentation that our key strategic growth drivers have momentum, so they're already underway. They're also diversified, and they're quite resilient. That's the first thing I would say. The second is, of course, we're not immune to major macro swings, and we track the consumer very closely. Hopefully, you also saw that we've dramatically elevated our brand, elevated our presence, elevated our customer base versus where we were three to five years ago with a customer that's less price-sensitive than we were three to five years ago. I think that also positions us well, even as the waters get choppy or get choppier.
The last thing is if you step back and you say, "Okay, going into choppy waters, what do you want as a company?" Right? You want a strong brand that you're able to continue to invest in. You want a strong core set of products that consumers know and trust. You want an organization that knows how to manage expenses efficiently and rigorously. You want a strong balance sheet. Have a guarantee with Jane there a nd you want a diversity of growth drivers, so you're not just relying on one market, one channel, one consumer group, one product category. Put simply, we have all of that. We feel actually pretty confident going forward that we have the key foundational elements, the right breadth of growth drivers to be able to achieve the goals that we've laid out earlier.
On the plus, I'll let Jane answer that.
Well, just on confidence, I just wanna add that we didn't plan for a singular scenario.
Mm-hmm.
I feel really good about our guidance. I feel good about the range. I think we've thought about that this is a center cut approach, but we've contemplated, you know, on the low end, there could be more disruption across all the regions. On the high end, there's, you know, a more normalized operating environment. That'll help get to plus. Now, plus is also, I think could be driven by we're in the early phases of the journey that Iris laid out in terms of consumer acquisition. Could go faster. Our retention numbers are building, which she called out. They could, you know, continue to build beyond, you know, what we've modeled in. I think that's a plus. You saw that we called out that our core, we're calling for our core at mid-single digits.
You know, we're coming off a core that was actually high single digits. You know, stronger core than we've modeled could also, you know, add to plus. Those are the things that, you know, I think we see as meaningful upside.
Thank you.
Let's take it over here to Laurent.
Thank you very much. Laurent Vasilescu from BNP Paribas. Patrice, I just have a quick question for you with regards to the women's initiative, low double-digit growth. Can you unpack that a little bit? Is it incremental doors and wholesale stores? What are the implications for margins? Then I think, Jane, you mentioned about $400 million of gross savings between COGS and SG&A. Can you unpack that between COGS and SG&A? How much would you reinvest in that business, in the business out of that $400 million gross? Thank you.
Laurent Vasilescu, I'm actually gonna ask Halide Alagöz to take the women's question since she runs t hat business directly.
Sure. Today our women's business is less than a third of our total company portfolio, and with the low double-digit growth that I cited, it will increase by 400 basis points. It has three main elements. One is really building on the key foundational core wardrobe staples for women, which we are building today, but we're not there. Second is really increasing our distribution on the tier one doors, both digital and physical. It covers many of our tier one level wholesale doors, but it also has dedicated store openings for women as well as the digital penetration, increasing the digital penetration. The third one is really the targeted marketing that will bring more female consumers in and convert the ones that we already have purchasing other products from our businesses.
Those three are the foundational building blocks of that growth. In all three of them, we have very detailed plans, very detailed roadmaps with milestones and checkpoints and targets and goals, so we feel very confident about the targets that we set.
Yeah, I guess a few things I would add to that great perspective is women's products tend to be higher AUR than men's. The size of the opportunity, you heard Halide mention it, that consumer is in our store. She's on our website. 56% of our shoppers is women's. 30% of our business, right? She's generously shopping for her husband, her boyfriend, her children, her friends, her parents. We're gonna continue to build that, but through the work that Halide referred to-
Mm.
Be able to better serve her needs. What I loved about what you said earlier is with the four brands that we have, we can take care of any occasion throughout the week, right? That's actually, I think, a pretty special competitive advantage. When it comes to specific retail, we do envision openings dedicated women's store. We actually just opened a couple in China.
China.
For sure. Right there. A few weeks ago. We're very excited about the initial results. That'll be part of the mix, but we have a broad infrastructure that we will be leveraging to accelerate our performance on the women's side.
Yeah, Laurent, just on the $400 million, I think it's early days, you know, so as sometimes these productivity initiatives take different shapes into where they impact. I think to think about it is about a third is in gross margin, and two-thirds is in SG&A. We've contemplated the flow-through in our guidance, so base year of 13.1% moving to 15%. In terms of operating margin, we factored in the flow-through from productivity into that.
Great. Let's go over to Brooke right here in the beige.
Hi, Brooke Roach from Goldman Sachs. Thanks so much for taking my question. I was wondering if you could elaborate a little bit more on the contribution of growth between AUR and units, both in terms of growth for total Ralph Lauren, but also what's happening within North America. Thank you.
What we've called out is targeted unit growth. Just as Bob called out, we've seen a significant growth in units in full price. We expect to grow units across digital, across full price, and across wholesale over time. Where we see a unit either static or slight decline is in our factory doors, where we've really done so much work to elevate the assortment and moved away from some of the lower-cost tees and moved into sweaters, jackets, more elevated assortments. That's the balance in terms of what we're seeing in terms of unit growth.
Let's take it over to Michael Binetti in the glasses over there.
Michael Binetti with Credit Suisse. Thanks for all the details today. Very helpful, guys. I guess just to follow on that wholesale up. I think you said low- to mid-single-digit over three years. Maybe you could help us. That seems like the biggest change, I think, in the channels from the last one. Maybe you can give us just a little bit more context there to the build. Then, I guess, Jane, you know, on AUR, why do you think 60%+ since 2019 is sustainable going forward? How much of it do you see from product or geography mix? How much from like-for-like pricing?
Maybe just how you think about the pricing spread of your brand today versus some of the European brands that kinda justify any kind of an umbrella you see above you?
Two questions. You wanna take wholesale first, and then I'll,
Yeah, I can.
Yeah.
I can talk about wholesale in North America. As we went through, we've really repositioned the brand in North America, and that channel has been impacted by that repositioning in a very positive way. When we exited two-thirds of our wholesale door, completely exiting the lower-tier department stores and over a 50% reduction in the off price. That has given us a real clean and healthy base to build off of. What Jane alluded to, we are seeing the sell-out in those channels. It is still a very important channel from a brand discovery perspective, and now as we pivot towards share gains, and we're seeing that across men's, women's, and kids. That's where we see the inflection to growth.
Just on the AUR. 60% growth, and we're calling for growth into the future at least to offset inflation. Why do we have confidence that we have a continued roadmap in front of us? Because the consumer tells us that we do.
The consumer says that today their perception of Ralph Lauren as a value is higher than it was pre-pandemic when our prices were 60% lower. We've been able, through our brand elevation, the investments in the product, investments in the environment, to elevate the consumer's price value perception so that it's higher than it was last year, and it's higher than it was four years ago. That, for me, is the number one confidence builder. You know, we are continuing to do our work across elevating our assortment into the higher price points within that. We've always had sweaters, but we've seen a great migration into cashmere at a higher price point. The same person who's wearing a wonderful, you know, cable cotton crew neck is now wearing our washable cashmere hoodie.
That kind of AUR elevation within the category as well as what we talked about in terms of AUR drivers as we mix into high AUR categories like outerwear, those have been, you know, strong drivers for us. Asia's gonna be our fastest-growing market. Europe's gonna be mid- to high-single digits, so the mix is moving to markets where we're higher priced. Asia's the highest price market, followed by Europe, followed by North America. That continued momentum of geography is going to continue to be favorable for us. It just as we look at our price-value relationship to some of our competitors, we still see room.
You can see, you know, Bob, we were going through the Polo shirt just yesterday, and we're seeing great sell-through on the Polo shirt, which has had a meaningful price increase. We're not seeing, you know, high levels of elasticity, quite the opposite. We're seeing, you know, reasonably flat elasticity curve. Now, you know, we've modeled some variability into that, but that's what's giving us confidence.
Thank you. Let's go over to Jay Sole in the corner here, please.
Thanks. Jay Sole, UBS. I was hoping you could elaborate a little bit on the success you've seen in China over the last few years and really take us back to, you know, 'cause the company's been in China for many years, and not all those years were as productive as the ones that are happening now. How did the company sort of overcome the legacy impact of some of those, you know, previous strategies? What's really happened that's really not just driven the growth, but changed the mindset of the brand, you know, within the mind of the Chinese consumer and is really positioning you for long-term growth that you've talked about in the guidance? Thank you.
Thank you for the question. Well, third time lucky, right? Patrice, we said. This is our third time in China, so we have learned. Based on the historical learning, we take a really disciplined approach in this current expansion model. As you've heard, you know, we really based it on brand elevation, digitalization, and consumer in the center. What we have seen worked across these past few years, despite so much turbulence in the macro environment, is that brand elevation is key. We need to keep staying on track with brand elevation, so we don't buckle, and we stay on track. Digitalization, as you have heard, we invested in building a lot of capabilities.
We worked with the best partners there are, whether it's Tmall, JD, or even with the Tencent group to develop new ideas, and the team is constantly testing and learning. Digitalization and our digital channels is really driving a lot of our accelerated growth. Finally, with the consumer at the center, you heard me talk about weaving that DNA of our brand into the Chinese culture. We didn't take a copy and paste approach of, you know, what worked in West and we reapply in the East. We really learn, and basically that piece is really helping us connect with the consumers, become more relevant to that consumer that's in the market, and it's resonating really well because the purpose and the value of this company really resonate with the Chinese purpose, Chinese values as well.
There are so many things that are similar between Ralph's values and the Confucius values. It's amazing. Yeah.
Jay, just to add a little bit to Shin's perspective because it is the third time for the company. I think there are three words I would call out. One is focus, quality, and financial viability. Six cities, right? You heard Shin talk about the fact we're focused. Listen, we could go to 150 cities.
Mm.
I'm good friends with the CEO of Estée Lauder, and when he talks to me about his business, he's like, "I'm city number 152." We're on city six, but we're staying very focused on building ecosystems that are powerful in these six cities. We'll expand progressively, but we're gonna be focused in terms of where we engage. Quality, I think, Shin, you said it. The way we win in China is at the high end through an elevated positioning. That is not necessarily what has driven our presence historically, where we're chasing volume, we're chasing size. We often ask ourselves, "Well, could we go faster in China?" Sure, we could.
Mm-hmm.
Shin feels the pressure. At the same time, the conversation is, "Yeah, but we have to do it in a quality way." We could jack up the numbers pretty aggressively in China over the next 18 months, but it wouldn't be the right thing to do for the next 10 years and 20 years, and we intend to be in this market for the long term. As you know, it's only 5% of our business today, so there's significant runway. The final point is financial viability, and I think if you look at the historical attempts in that market.
They were done in a way that frankly wouldn't work financially, wasn't sustainable. I think what Shin and her team are doing now much more deliberately is to make sure whatever we build is attractive financially and is building on each other and driving this productively. We're actually quite hopeful about our future in that market. As you mentioned, the brand is nicely weaved into the local culture, and we think we have a really nice runway going forward there.
Omar Saad.
Hi, it's Omar Saad from Evercore ISI. Thanks for a great presentation. I was hoping you could give a quick update and maybe more of a granular discussion around core. It was a part of a lot of the presentation today. It's a big part of the growth. What do you mean exactly by core? Maybe the differential between women's and men's. Is women's core where you need it to be to hit those growth numbers? Maybe also a quick update on the factory outlet business. What's the role for factory outlets in the new kind of connected Key City ecosystem? Thanks.
Sure. Nice to see you, Omar, and I know you care deeply about product and the core, so I'm not surprised by that question coming from you. Maybe why don't we divide and conquer and have Halide and Bob tag team on that?
Yes. What we refer to as core are the products that we have in our lines and where the consumers come back to us over and over to replenish and update their wardrobes. We have a very successful core business in men's with Oxford button-down shirts to chinos, to jeans, to polo shirts, to some of our amazing outerwear, as you see in the displays. It educated us, and we learned a lot through that process of how to keep that core strong and elevated, updated every season to keep it relevant for the consumers, which we do through design code, sustainability, innovation, and all those principles. Also sprinkle some 30% of our seasonal concept styles on that category to bring the dreams to life of our creative directors. That model has a lot of learnings in it.
Looking into that, now we are building our women's core business. Some of those core products are the same, like polo shirts and Oxford shirts, but women have a lot of female unique categories like wool, elevated, sophisticated coats, like dresses, like shirt dresses, like blouses, tops, or where we have very high value price relationship, our blazers, our tops, which gives her the confidence and the elevation that she is looking for. We believe and what we see now is through those categories, we've been really bringing a lot of new consumers in, and then we're keeping a lot of consumers because she's coming back. Like I also said, it's not a core yet, but we see a strong momentum on our handbag business.
A few of our core proposition handbag offers have been bringing in more new consumers to the brand than the rest of the average of categories in the other female proposition. A lot of learnings through our men's business, which we are implementing into women's. Through our creative directors, our design teams, our product teams, we wanna make sure we address specifically her and what she needs as wardrobe staples. They are a little bit different than the men's wardrobe staples. We brought in a lot of new talent and a lot of new understanding. Like I said, we work with the best partners in the world, from components to production. In every woman's tier that we serve, like Patrice said, we have four brands in different tiers of businesses. What we address is to be the premium in each tier.
With that approach, we're bringing the new foundational core programs to women's.
Bob, you wanna talk about the role of factory?
Absolutely. With what we've transformed and repositioned in our full price network in North America, it's really given us the ability to take a look at that outlet channel. And as I mentioned in my presentation, this is the local Ralph Lauren store for many of our consumers. It is the local Ralph Lauren store. What we're doing in that store is we're elevating that physical environment. We're elevating the product presentation. We're elevating the assortment. We're elevating the service model. When the consumer walks into that store, we want them to feel inspired. We want them to dream. We want them to feel the luxury experience for that consumer entering into that door. We're seeing success. We're offering them broader range of products, more elevated products, and not one outlet is like another.
You can go to an outlet shop that has sky-high adjacencies with all of the European accessory luxury companies you've seen or outlets that are more focused towards everyday American consumer. They can both be elevated, and they can both provide that experience, and that's what we're driving in that channel, and we're just starting that transformation, and it's pretty exciting.
Probably the store we have in Woodbury Commons, which isn't that far from here, is a good illustration of where we wanna take that business, the type of experience we wanna provide consumers, and also tapping into kind of this local store approach.
Absolutely.
How about, John Kernan up front here?
Oh, thank you. John Kernan, Cowen. Thanks for a great presentation and congrats on over-delivering on everything you gave us four years ago. Jane, the word inflation is used quite a bit now. That's certainly something that's different than four years ago. How are you offsetting all of the product cost inflation, freight inflation, wage inflation? Yo u name it, inflation, within your gross margin expansion into 2025.
Yeah. Inflation offsets are a combination of productivity that our supply chain is driving. Some of the productivity that I've called out has helped offset inflation. Then the other, which is our guidance going forward, is that we are looking at pricing to make sure that we can hold margin with margin accretion coming from some of the other factors that I called out, like geographic mix. That's very much, you know. We've gone from our previous guidance to pricing to match inflation and, you know, and we are, you know, we're in the process of doing that now.
How about Paul Lejuez, and then we'll go over to Bob right next to him.
Paul Lejuez, Citi. I'm curious if you guys think about the business from a geography channel category perspective, where do you see hitting your targets as being easier versus more difficult? What's the low-hanging fruit based on investments that have already been made, seeds that have already been planted, versus where is it gonna be a little bit more challenging? What requires a little bit more investment to kinda hit what you've laid out today?
Well, I think we've done a pretty balanced job of making sure that our guidance incorporates needed investments. But I would say that, you know, there are several areas of momentum, certainly APAC, our Asia region, not just put all the pressure on Shin, but also Jay Kimpton, who's head of our Japan, Korea, Australia business. Those markets are doing exceptionally well. So I'd say that we've got some nice momentum there. You know, every COVID shutdown, like everyone else, gives me pause, and so it's not perfectly predictable, but, you know, strong momentum there. I would say that Europe, you know, as we called out, going into the winter months is, you know, that's a more challenging situation.
I think we've tried to incorporate that into our guidance, but I do think that consumer could be pressured given the war and inflation there. I think on our product side, in terms of women's, that's gonna be an area of investment for us. We've tested a lot of things, as Patrice called out, new store formats. We have a fabulous designer on women's. Michael, if you wanna raise your hand, in the back.
You know, that's an area of focus and investment for us in terms of not just the stores, but also the advertising that makes sure that, and the marketing initiatives that make sure that we're pulling her in and having her think of us as a resource for her in so many parts of her life, as Halide called out.
Paul, if you look at kinda the three biggest growth contributors from our plan, North America, womenswear, digital, the good news is all three have momentum, right? North America, we're growing share. You heard it. In men's, women's ready-to-wear, kids, women's, we already have a sizable business. We just have outsized ambitions for it. And then digital, we have wonderful momentum. We doubled our initial goals. While nothing is easy right now in this environment, we think that we're well positioned for the biggest building blocks to come through in addition to Jane's perspective.
We'll take it over to Bob right there.
All right.
Bob Drbul, Guggenheim Securities. Two questions actually. The first one is on the consumer, your progress of attracting a younger consumer, skewing younger, you know, like, where is that happening in terms of the product offering, you know, through retail, especially in the light of higher AURs? The second question is, when you think about the next couple of years, Jane, on foreign exchange, you know, when you look at sort of where the dollar is today, you know, could you get more aggressive on some hedging to protect and/or maybe benefit a little bit given where we are right now with the U.S. dollar? Thanks.
Great. Thank you, Bob. Iris, you wanna talk about the kind of the key drivers for new younger consumer recruiting, both from a marketing platform standpoint and also the
Yes.
Types of products?
Sure. As we've seen, we have a great momentum with young consumers, right? We over-index in terms of young consumers, and we have a very strong consideration. In terms of product, what's very interesting is that, they are attracted by both our very timeless and iconic products, but as well as by our youthful specific products that we develop for the young generation. They really buy into two sensitivities, the iconic timeless products and the more youthful products. In terms of channels of distribution, I would say that where we have the highest propensity to recruit them in the brand is going to be online through our digital platforms, both our own website, but also our partners' websites, such as , to give you two examples.
I would say that, as I said, you know, we've been extremely focused on breaking through on social. Social commerce has helped us to attract new generation tremendously. Now the virtual platforms, the gaming platforms, you know, by selling virtual goods, we introduce the brand to a lot of new consumers that then come to our own stores to buy real physical products.
Bob, on the product front, what's fascinating is, Omar, I remember you and I talking this, our core is attracting the younger consumer. White Polo shirt, all generations. How does the team do it? John and Michael, is they style it in different ways so that we tell different stories depending on the generation we wanna appeal to. Those new underrepresented categories that we've been pushing, sneakers, denim, outerwear, they disproportionately appeal to that younger generation, which is what you're seeing. As we focus on those, what you're seeing is the ability that we have to elevate our customer base and also bring in a younger shopper as part of it.
On being more aggressive in terms of hedging, I mean, we still believe in layered hedging, you know, to essentially have time to put in place the pricing that we need to offset inflation. That's been sort of our mindset with inflation. We are looking at opportunities on areas like cotton, where we have a pretty sustained level of demand, and seeing if we can be more aggressive or I'd say more opportunistic as we see dips in the market in that commodity and be out in front. Fabric first, which is where we think about those fairly stable commodity buys, give us the flexibility, I think, to be more opportunistic there. We are. We're looking at some of those vehicles to do that.
Let's go over to Chris Nardone here, and then we'll move over.
Hey, thanks. Christopher Nardone from Bank of America. Where do you think total company mix shift between DTC and wholesale could go over the long term? Can you talk a little bit about denim? I believe it was one of your focus areas at your prior Investor Day. If you can just talk a little bit about the progress you've made, how big the business is today, and then any changes you're seeing in that business. Thanks.
We expect over the next three years that DTC will be about two-thirds of our business, so that is a penetration, you know, increase. One of the things that's encouraging, it's not quite as big as we called out last time, is because wholesale is now growing low- to mid-single-digit, as well as growing nicely.
Mm-hmm.
In terms of the digital business. It's not that we're slowing down, it's that wholesale's essentially speeding up.
You wanna talk denim?
Sure. What we saw in denim is like in outerwear. It outpaced the growth of the average category growth in the company. We have actually seen it working. It is because, again, of course, of the amazing elevated product offering that we have, but also the styling offers and how we are attracting a younger generation with denim. Like Iris explained, both through the styling offers and suggestions of Michael and John and how they inspire the consumer, as well as the new denim that we have been developing and putting out in the lines. There is a significant opportunity to, again, build the core denim proposition in different women's tiers. We just started doing that. We expect denim to continue to be a big part of the growth journey going forward.
Okay, last questions. We'll go with Marni.
Thanks. Marni Shapiro with The Retail Tracker. Thank you guys for a really fantastic day. I wanted to clarify one thing. Janet, I think you said that the digital margins were on a par with wholesale now. I don't know if this is for you or Jane, but is there opportunity to increase those margins so they're above wholesale and somewhere in between your retail and wholesale? Just back to women's because we are the better customer. It sounds like it's coming mostly from Polo. I'm just curious what your thoughts are. Is Lauren just a recovery improving story, or is there still growth at Lauren?
Mm-hmm.
Is the handbag business embedded in the women's business, or is that sort of a separate entity with footwear, accessories, and handbags? Thank you.
Well, I didn't say that.
I am going to refer to Jane on that because of the comparison between digital.
Yeah, I don't think we're putting a ceiling on our digital margins as of today. I mean, we made tremendous progress. We're really focusing on making sure it's an attractive margin for us, so we are focused on growth. This is a growth plan. We're in no way saying we're done with digital margins. I wouldn't expect to see the kind of 850 basis point improvement that you saw. Our objective was to get it up to that level so that we could really lean into it and grow because that's where the consumer is growing.
Strategically, it was a huge fix for us to make sure that it was accretive, but we're not putting a cap on that margin.
On the woman, again, what we have been observing is over the last years, the affinity of women to four of our brands, all four of our brands, have been increasing. As I said, Lauren's repositioning of the business is set on ready-to-wear. As I said, we've seen six consecutive quarters of market share growth in ready-to-wear. It's a huge success, and that came with an AUR growth and a margin improvement. From that perspective, from an acceleration and opportunity of growth, we see Polo women's growth will lead the growth numbers. Lauren will continue its growth journey with a better elevated distribution, with better product offering, and again, targeted marketing campaigns in all four of our brands. Handbags and footwear, all propositions are under the women's umbrella because we see it as a part of our lifestyle offer to her.
It's ready-to-wear, it's apparel, and it's footwear all coming together. Handbags, it's really like working really, really well for us. I hope you had the chance just to observe some of the bags we put on the stands. Our Wellington bag launch on Collection was a huge success. Our Polo ID handbag launch for Polo women's is a huge success, and they brought in much higher levels of new consumers to the brand versus the average of the other categories. It gives us the confidence that it's relevant, it's desirable, it's of high quality, and the woman is understanding the proposition that we're trying to put out there.
Thank you.
All right. Well, it's the end of the day.
Yay.
Listen, as we close, I wanted to start actually with a huge thank you, first to you, Ralph, 'cause we wouldn't be here if you weren't here. Obviously, to this incredible team. Thank you, guys. On stage, in the room, we're not forgetting you. Behind the scenes, and importantly, all 24,000 employees in this company who focus every day on inspiring consumers and creating value. For 55 years, we have created exceptional and timeless products and experiences that have really helped bring our consumers' dreams and their movies, your movies, to life. Today, as a leading luxury company, we're in a position to do that more powerfully, hopefully you got that sense today, more powerfully than ever before. We're in a position to accelerate. We have strong, broad-based momentum.
Our plan is clear, it's choiceful, it's distinctive, and as always, because execution is so important in this category, you can count on us to deliver excellence in execution. As we start our new chapter, we're gonna bring Ralph's vision to more consumers in more parts of the world, across more elements of our lifestyle proposition. We're gonna finally capture the opportunity to match the size of our business to the size of our brand. We have a brand that is so much bigger than our business today, and therefore, we have so much runway ahead for this company. I really appreciate you joining us today in person. I appreciate the time you spent with us. I know that was a big time investment. Thank you. Look forward to seeing you in different forums, and until then, take good care. Thank you.