Core Viewpoint - Ralph Lauren Corporation (RL) is expected to report first-quarter fiscal 2026 results on August 7, with revenue estimates at $1.65 billion, indicating an 8.8% growth year-over-year, and earnings per share estimated at $3.45, suggesting a 27.8% increase from the previous year [1][2]. Group 1: Financial Performance Expectations - The consensus estimate for revenues is $1.65 billion, reflecting an 8.8% growth from the prior year's quarter [1]. - The earnings consensus is $3.45 per share, indicating a 27.8% increase from the year-ago actual [1]. - Management anticipates revenues to grow in the high-single digits on a constant-currency basis for the fiscal first quarter [6][11]. Group 2: Business Trends and Strategies - Ralph Lauren's performance is likely to benefit from a strong brand presence, diverse product portfolio, and expanding e-commerce capabilities [3]. - The company is focusing on innovation and integrating AI technology to enhance its market position [3]. - Investments in digital and omnichannel business are expected to support both top and bottom-line results [4][11]. Group 3: Market Conditions and Challenges - The company faces challenges from international exposure, particularly due to fluctuating foreign exchange rates and a strengthening U.S. dollar [7]. - Ongoing macroeconomic and geopolitical uncertainties, inflationary pressures, and supply-chain disruptions are impacting the operating landscape [8][9]. - Management noted no change in underlying business trends from the previous quarter into the current one [8]. Group 4: Valuation and Stock Performance - Ralph Lauren's stock is trading at a forward price-to-earnings ratio of 21.35X, higher than its median of 18.07X and the industry average of 10.63X [14]. - The stock has risen 28.4% in the past three months, contrasting with an 8.1% decline in the industry [15].

Market Overview - Recent market pullback due to new tariffs and a slowdown in job growth has shaken investor confidence, with July nonfarm payrolls rising by only 73,000, significantly below expectations [1] - June's job numbers were revised downward, indicating a weaker labor market than previously thought [1] - Renewed trade tensions have fueled expectations of a Federal Reserve rate cut and increased risk aversion, leading to sharp declines in major indices [1] Importance of Financial Health - Investors should not rely solely on stock price movements; understanding a company's fundamentals is crucial for informed decision-making in an unpredictable market [2] - Sales and earnings metrics can be misleading; the interest coverage ratio is a key indicator of a company's ability to meet financial obligations [3][4] Interest Coverage Ratio - The interest coverage ratio measures how effectively a company can pay interest on its debt, calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5] - A higher interest coverage ratio indicates a greater ability to meet financial commitments, while a ratio below 1 suggests potential default risks [6][7] - Companies with strong interest coverage ratios include The Walt Disney Company, BJ's Wholesale Club, Ralph Lauren, and McKesson Corporation, all of which demonstrate solid debt-servicing capabilities [9][11] Investment Strategy - A favorable investment strategy includes selecting stocks with an interest coverage ratio above the industry average, a Zacks Rank of 1 or 2, and a VGM Score of A or B [8][10] - The selected companies have shown strong earnings surprises and are projected to grow sales and earnings in the coming year [9][11] Company Performance Highlights - **Walt Disney Company**: Zacks Rank 2, VGM Score B, with a trailing four-quarter earnings surprise of 16.4% and projected sales and EPS growth of 4% and 16.3% respectively [12] - **BJ's Wholesale Club**: Zacks Rank 2, VGM Score B, trailing four-quarter earnings surprise of 17.7%, with projected sales and EPS growth of 5.5% and 6.2% respectively [13] - **Ralph Lauren**: Zacks Rank 2, VGM Score B, trailing four-quarter earnings surprise of 9%, with projected sales and EPS growth of 3.8% and 11.8% respectively [14] - **McKesson Corporation**: Zacks Rank 2, VGM Score A, trailing four-quarter earnings surprise of 3.9%, with projected sales and EPS growth of 13.1% and 12.7% respectively [15]

Core Insights - Analysts expect Ralph Lauren (RL) to report quarterly earnings of $3.45 per share, reflecting a year-over-year increase of 27.8% [1] - Projected revenues for the quarter are $1.65 billion, which represents an 8.8% increase from the same quarter last year [1] - The consensus EPS estimate has been revised upward by 1.4% in the past 30 days, indicating a reassessment by covering analysts [1][2] Revenue Breakdown - 'Net revenues- Retail' are expected to reach $1.15 billion, indicating an 11.8% increase year-over-year [4] - 'Net revenues- Wholesale' are projected at $462.23 million, reflecting a 3.7% increase from the prior-year quarter [4] - 'Geographic Net revenues- Other- Licensing' are forecasted to be $34.00 million [4] Geographic Revenue Estimates - 'Geographic Net revenues- North America' are anticipated to be $643.45 million, suggesting a 5.8% year-over-year change [5] - 'Geographic Net revenues- Europe' are expected to reach $535.22 million, indicating an 11.7% increase from the prior-year quarter [5] - 'Geographic Net revenues- Asia' are projected at $434.37 million, reflecting an 11.1% year-over-year increase [5] Market Performance - Ralph Lauren shares have returned +5% over the past month, outperforming the Zacks S&P 500 composite, which saw a +0.6% change [6] - The company holds a Zacks Rank 2 (Buy), suggesting expectations of beating overall market performance in the near future [6]

Core Viewpoint - Investors are seeking growth stocks that can deliver above-average growth and exceptional returns, with Ralph Lauren identified as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Group 1: Earnings Growth - Ralph Lauren has a historical EPS growth rate of 51%, with projected EPS growth of 11.4% for the current year, significantly outperforming the industry average of -4.1% [5]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 10.2%, which is notably higher than the industry average of -5.4% [6]. - Over the past 3-5 years, Ralph Lauren's annualized cash flow growth rate has been 5.4%, compared to the industry average of 4.8% [7]. Group 3: Earnings Estimate Revisions - The current-year earnings estimates for Ralph Lauren have been revised upward, with the Zacks Consensus Estimate increasing by 0.5% over the past month [8]. Group 4: Overall Assessment - Ralph Lauren holds a Zacks Rank of 2 (Buy) and a Growth Score of B, indicating its potential as a solid choice for growth investors [9][10].

Group 1: Stock Performance - Ralph Lauren's stock closed at $289.49, reflecting a +1.13% change from the previous day's closing price, outperforming the S&P 500's daily loss of 0.01% [1] - The stock has increased by 6.89% over the past month, surpassing the Consumer Discretionary sector's gain of 6.61% and the S&P 500's gain of 5.37% [1] Group 2: Upcoming Earnings Disclosure - Ralph Lauren is set to report earnings on August 7, 2025, with projected earnings of $3.4 per share, indicating a year-over-year growth of 25.93% [2] - Revenue is expected to reach $1.64 billion, representing an 8.27% increase compared to the same quarter last year [2] Group 3: Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $13.63 per share and revenue at $7.31 billion, reflecting changes of +10.54% and +3.23% respectively from the previous year [3] - Recent changes to analyst estimates for Ralph Lauren may indicate shifting near-term business trends, with positive revisions seen as a favorable sign for business outlook [3] Group 4: Valuation Metrics - Ralph Lauren is currently trading at a Forward P/E ratio of 21, which is a premium compared to the industry average Forward P/E of 14.78 [6] - The company has a PEG ratio of 2.18, compared to the industry average PEG ratio of 2.08 [7] Group 5: Industry Ranking - The Textile - Apparel industry, which includes Ralph Lauren, has a Zacks Industry Rank of 212, placing it within the bottom 15% of over 250 industries [7] - The Zacks Rank system indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Cost Management Strategies - The company has a proven toolkit to manage cost headwinds, suggesting experience in navigating challenging economic conditions [1] - Diversified sourcing and strategic partnerships with suppliers are key strategies to manage costs throughout the supply chain [2] - The company possesses strong brand pricing power, allowing for selective pricing and promotional activities when needed [2] External Factors - Tariffs continue to evolve, creating uncertainty for the company [1] - Prior cost headwinds, such as increased cotton prices, have been successfully managed [2] Focus on Consumer - The company's primary focus is on engaging consumers through storytelling, products, and experiences [2]

Ralph Lauren CEO says demand for its signature clothing such as cable-knit sweaters remains strong, even as the fashion industry is buffeted by tariffs and an economic slowdown https://t.co/9FN8DGWKRY ...

Business Strategy & Adaptation - Ralph Lauren CEO Patrice Louvet discusses adapting to challenges from changing trade policies [1] - The fashion brand possesses a "proven toolkit" for managing cost headwinds [1]

Company Performance - Ralph Lauren's stock increased by 1.93% to $279.81, outperforming the S&P 500's gain of 0.83% on the same day [1] - Over the last month, Ralph Lauren's shares decreased by 1.2%, lagging behind the Consumer Discretionary sector's gain of 7.03% and the S&P 500's gain of 4.99% [1] Upcoming Earnings - Analysts predict Ralph Lauren will report an EPS of $3.4, reflecting a growth of 25.93% compared to the same quarter last year [2] - Revenue is expected to reach $1.64 billion, indicating an increase of 8.27% year-over-year [2] Full Year Estimates - For the full year, earnings are projected at $13.63 per share, showing a growth of 10.54% from the previous year [3] - Revenue is estimated to be $7.31 billion, representing a 3.23% increase from the prior year [3] Analyst Estimates - Recent modifications to analyst estimates for Ralph Lauren indicate changing business trends, with upward revisions suggesting positive sentiment towards the company's operations [4] - The Zacks Rank system, which incorporates these estimate changes, currently ranks Ralph Lauren at 3 (Hold) [6] Valuation Metrics - Ralph Lauren has a Forward P/E ratio of 20.14, which is higher than the industry average of 14.34, indicating a premium valuation [7] - The company has a PEG ratio of 2.09, aligning with the industry average for Textile - Apparel stocks [7] Industry Context - The Textile - Apparel industry is part of the Consumer Discretionary sector and holds a Zacks Industry Rank of 204, placing it in the bottom 18% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Insights - The trend of adults wearing children's clothing is gaining popularity in both China and Japan, reflecting a shift towards more conscious consumerism [1][8] - In the 1990s, Japanese women embraced children's clothing for its better fit and comfort, a sentiment that is now echoed by the new middle class in China [3][4] - The appeal of children's clothing lies in its affordability and similar quality to adult versions, making it a smart choice for consumers seeking value [3][4] Consumer Behavior - Chinese consumers are increasingly opting for children's luxury brands like Dior and Stella McCartney, recognizing that these items offer the same quality as adult versions at a significantly lower price [4][6] - Positive feedback from consumers on platforms like Vipshop highlights the successful fit and comfort of children's clothing for adults, indicating a growing acceptance of this trend [6] - The decision to wear children's clothing is also driven by a desire for self-expression and comfort, challenging traditional notions of maturity in fashion [8]