Company Overview - Ralph Lauren (RL) currently holds a Momentum Style Score of B, indicating potential for strong performance in the momentum investing strategy [3] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a historical track record of outperforming the market [4] Price Performance - Over the past week, RL shares have increased by 1%, while the Zacks Textile - Apparel industry has decreased by 0.2% [6] - In a longer time frame, RL's shares have risen by 14.81% over the past quarter and 69.94% over the last year, significantly outperforming the S&P 500, which has moved 11.2% and 19.34% respectively [7] Trading Volume - The average 20-day trading volume for RL is 569,889 shares, which serves as a useful indicator of market interest and price movement [8] Earnings Outlook - In the past two months, 6 earnings estimates for RL have been revised upwards, while none have been revised downwards, leading to an increase in the consensus estimate from $13.63 to $14.77 [10] - For the next fiscal year, 5 estimates have also moved upwards with no downward revisions [10] Conclusion - Given the positive price trends, strong earnings outlook, and favorable momentum indicators, RL is positioned as a strong candidate for investors seeking momentum stocks [12]

Core Insights - Ralph Lauren Corporation (RL) has experienced a significant stock price increase of 69.4% over the past year, outperforming the industry which declined by 16.3% and the broader Consumer Discretionary sector and S&P 500 which gained 22.7% and 17.8% respectively [1][8]. Company Strategy and Performance - The company's strategic plan, "Next Great Chapter: Accelerate Plan," emphasizes brand elevation, consumer centricity, and operational agility, contributing to its competitive edge in the luxury lifestyle market [3]. - Ralph Lauren is expanding in high-potential markets, particularly in Asia, while reinforcing its core regions to ensure diversified revenue streams [3][10]. - Digital transformation is a key growth strategy, with digital sales increasing by 19% in North America, 11% in Europe, and 35% in Asia during Q1 FY26 [4][8]. Revenue and Margin Outlook - Ralph Lauren anticipates revenue growth in the low-to-mid single digits for FY26, supported by a weaker U.S. dollar and sustained momentum in Asia and Europe [11]. - The company projects operating margin expansion due to expense leverage, strategic pricing initiatives, and improved gross margins, despite ongoing tariff and inflationary pressures [12][14]. - In Q2 FY26, revenue growth is expected to be in the high single digits on a constant-currency basis, with additional support from foreign exchange movements [13]. Valuation and Investment Rationale - Ralph Lauren is currently trading at a forward P/E multiple of 20.41X, which is higher than the industry average of 11.43X, indicating strong investor expectations for growth [15]. - The company's solid fundamentals and strategic execution support its premium valuation, making it an attractive investment opportunity [17].

Core Insights - The U.S. stock market reacted positively to the Federal Reserve's decision to lower its benchmark interest rate by 0.25 percentage points to a range of 4-4.25%, aiming to stimulate growth while managing inflation [1][11] - The Dow Jones Industrial Average increased by 124.10 points (0.27%) to 46,142.42, the S&P 500 rose by 31.61 points (0.48%) to 6,631.96, and the Nasdaq Composite gained 209.40 points (0.94%) to 22,470.72 [2] Interest Coverage Ratio - Companies with strong interest coverage ratios are expected to benefit from lower borrowing costs, as these ratios indicate a firm's ability to meet interest obligations comfortably [3][6] - The interest coverage ratio is calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense, and a ratio below 1 suggests potential default risk [5][8] - Companies highlighted for their strong interest coverage ratios include Stride, Inc. (LRN), Ralph Lauren Corporation (RL), Encompass Health Corporation (EHC), and The Progressive Corporation (PGR) [4][11] Company Performance and Projections - Stride, Inc. is projected to see sales and EPS growth of 11% and 5.9% respectively, with a stock price increase of 65.7% over the past year [14] - Ralph Lauren Corporation anticipates sales and EPS growth of 6% and 19.8% respectively, with a stock price increase of 69.4% over the past year [15] - Encompass Health Corporation expects sales and EPS growth of 10.2% and 18.3% respectively, with a stock price increase of 35.3% over the past year [16] - The Progressive Corporation projects sales and EPS growth of 16.4% and 26.8% respectively, although its stock price has declined by 6.7% over the past year [17] Investment Strategy - A successful investment strategy should include companies with an interest coverage ratio above the industry average, a favorable Zacks Rank, and a VGM Score of A or B [9][13] - Stocks that meet these criteria are likely to outperform in various market conditions, with a focus on those with strong historical EPS growth and substantial trading volume [10][12]

Economic Overview - Wall Street resumed its rally following a 25 basis points rate cut by the Federal Reserve, with the Dow and Nasdaq reaching record highs, indicating regained investor confidence [1][3] - The Federal Reserve raised its GDP forecast for the year, reflecting a positive sentiment in the economy as inflation has eased substantially [1][6] Rate Cuts and Economic Impact - The Federal Reserve's recent rate cut to a range of 4-4.25% is aimed at addressing concerns over a struggling labor market and a slowing economy, with expectations of two more rate cuts this year [3][5][9] - Lower borrowing costs are anticipated to benefit the broader economy, particularly in consumer discretionary sectors [6][9] Consumer Discretionary Stocks - Boyd Gaming Corporation (BYD) has an expected earnings growth rate of 5.2%, with a 4.9% improvement in the Zacks Consensus Estimate over the last 60 days [7] - Norwegian Cruise Line Holdings Ltd. (NCLH) is projected to have a 13.7% earnings growth rate, with a 3% increase in the Zacks Consensus Estimate [8] - Ralph Lauren Corporation (RL) shows a strong expected earnings growth rate of 19.8%, with an 8.4% improvement in the Zacks Consensus Estimate [10] - Hasbro, Inc. (HAS) has an expected earnings growth rate of 21.5%, with a notable 14.6% increase in the Zacks Consensus Estimate [11] - Grand Canyon Education, Inc. (LOPE) is expected to see a 12.8% earnings growth rate, with a 3.7% improvement in the Zacks Consensus Estimate [12][13]

Industry Overview - The Zacks Textile – Apparel industry is currently facing challenges due to persistent inflation, supply-chain disruptions, and high selling, general and administrative (SG&A) expenses, which are impacting profitability [1][5] - The industry includes companies that manufacture, design, distribute, and sell apparel, footwear, and accessories for men and women, operating through various distribution channels [3] Current Trends - Consumer caution and a focus on value are evident as inflation and macroeconomic uncertainty lead to muted demand, straining the textile and apparel sector [4] - Persistent cost pressures from elevated input and labor costs, rising SG&A, and freight and tariff volatility are causing ongoing margin pressure [5] - Digital and AI-driven transformation is becoming a key growth driver, with companies leveraging these technologies to improve efficiency and connect with consumers [6] - Brand strength is increasingly important, with companies positioning themselves as lifestyle curators to maintain premium pricing and appeal to younger shoppers [7] Industry Performance - The Zacks Textile – Apparel industry ranks 191, placing it in the bottom 22% of over 250 Zacks industries, indicating dim near-term prospects [8] - The industry's consensus earnings estimate has declined by 8.6% since June 2025, reflecting a negative aggregate earnings outlook [9] - Over the past year, the industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500, declining by 16.6% compared to the sector's and S&P 500's growth of 23.9% and 19.8%, respectively [10] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 11.25X, significantly lower than the S&P 500's 23.36X and the sector's 19.98X [13] Notable Companies - **Ralph Lauren Corporation (RL)**: Focused on brand elevation and digital ecosystems, with a Zacks Rank of 2. The consensus EPS estimate has increased by 8.4% to $14.77, and shares have rallied 36.3% in the past six months [16][17] - **Hanesbrands Inc. (HBI)**: Engaging in a transformation centered on innovation and cost discipline, with a Zacks Rank of 2. The consensus EPS estimate has risen by 24.5% to $0.66, and shares have increased by 3.5% [20][21] - **Guess?, Inc. (GES)**: Advancing a global growth strategy with a focus on brand elevation and operational agility, holding a Zacks Rank of 2. The consensus EPS estimate has jumped by 8.1% to $1.60, with shares surging 36.1% [24][25] - **PVH Corp. (PVH)**: Revitalizing core brands through marketing and international expansion, with a Zacks Rank of 3. The consensus EPS estimate has increased by $0.02 to $0.84, and shares have jumped 28.8% [28][29]

Investment Rating - The report maintains a low- to mid-single-digit revenue growth expectation for FY26 at constant currency [8][9]. Core Insights - The company expects overall revenue to grow at a mid-single-digit CAGR over the next three years, with Asia projected to grow at high single digits and EMEA at mid-single digits, while North America has a more cautious outlook [9]. - Management anticipates operating margin expansion of 100-150 basis points by FY28, with gross margin expected to maintain moderate annual growth driven by pricing optimization and supply chain efficiency [9][12]. - The company emphasizes a differentiated positioning strategy, maintaining a leading position in menswear and focusing on brand storytelling to counter price competition [10]. - Significant growth potential exists, with current market shares in high-end and luxury accessible markets being under 2%, indicating room for expansion [10]. - The company is leveraging AI and digitalization to enhance supply chain resilience and product appeal, with a focus on demand forecasting and predictive procurement [11]. - In response to inflation, the company plans to implement price increases and cost optimization strategies, aiming to save over $400 million [12]. Summary by Sections Revenue Growth and Financial Guidance - The company projects a mid-single-digit CAGR for overall revenue over the next three years, with specific growth rates for different regions [9]. - Management expects operating margin to expand by over 300 basis points since the last Investor Day, with further improvements anticipated [9]. Market Position and Competitive Strategy - The company has maintained its leadership in menswear and is focusing on brand differentiation amidst competitive pricing pressures [10]. - Current market shares in high-end segments indicate substantial growth opportunities [10]. Technological Advancements - The company is advancing its AI capabilities to improve supply chain management and product design, enhancing overall operational efficiency [11]. Cost Management and Pricing Strategy - The company plans to counter inflation through strategic price increases and cost-saving initiatives, with a target of saving over $400 million [12].

Group 1 - Ralph Lauren outlined new three-year targets for mid-single-digit sales growth and 100–150 basis points of operating margin expansion, with a 16% margin outlook not seen as a ceiling [1] - Growth is expected to be driven by strong performance in Asia and Europe, along with gains in women's apparel, handbags, and an expanded store footprint in APAC and EMEA [1] - Bank of America Securities noted that the updated plan reflects the company's previous successful strategy and highlights potential for gross margin improvement [2] Group 2 - Key drivers for growth include continued pricing power through higher average unit retail (AUR), easing input costs like cotton, and productivity gains in supply chain and inventory management [3] - A new $400 million cost savings program has been initiated, split between gross margin and SG&A, following a similar initiative from fiscal 2022 to 2025 [4] - Ralph Lauren's second-half guidance may be conservative, with stable consumer demand trends and opportunities in the women's category, particularly in handbags [5] Group 3 - In the first quarter of fiscal 2026, Ralph Lauren reported a 14% increase in revenue to $1.72 billion, exceeding the consensus estimate of $1.64 billion, and adjusted EPS of $3.77, surpassing forecasts of $3.43 [6] - For fiscal 2026, the company projects low- to mid-single-digit revenue growth at constant currency [6] - Analyst Christopher Nardone identified upside risks from faster sales recovery and cost savings, while downside risks include weakness in wholesale and global macro headwinds [7]

Ralph Lauren CEO Patrice Louvet told CNBC on Wednesday that the company did not know ahead of time that Taylor Swift and Travis Kelce would wear the brand for their engagement photos. "I think some people saw there, as they should, just the strength of the brand and the presence that we have around the world and the fact that we're part of culture," Louvet said. ...

Welcome back. Ralph Lauren reiterating its 2026 outlook and also introducing new three-year targets in an investor day in New York City yesterday. The company expecting revenue to increase at a compounded annual growth rate of mid-s single digits while operating margins set to expand by 100 to 150 basis points. Ralph Lauren also planning to return at least $2 billion to shareholders through dividends and share buybacks. The stocks up more than 30% this year, outpacing the broader retail space. Joining us no ...

Core Insights - Ralph Lauren is maintaining its 2026 outlook and introducing new three-year targets, expecting revenue to grow at a compounded annual growth rate in the mid-single digits and operating margins to expand by 100 to 150 basis points [1] - The company plans to return at least $2 billion to shareholders through dividends and share buybacks, with stock performance up over 30% this year, outperforming the broader retail sector [1] - Analysts expressed excitement about the company's performance and brand strength, despite some concerns about the outlook being conservative [1] Revenue and Market Position - Ralph Lauren operates in a $400 billion market but currently holds less than a 2% market share, indicating significant growth potential [1] - Women's category represents about one-third of the company's business, with over 50% of shoppers being women, highlighting a major growth opportunity [1] Brand Strategy and Cultural Engagement - The company is focusing on elevating its brand to a core luxury status while maintaining an inclusive luxury approach, appealing to a wide consumer base [1] - Recent cultural moments, such as celebrity engagements featuring Ralph Lauren products, have generated significant media coverage and brand visibility, although the immediate business impact is hard to quantify [1] Pricing and Value Proposition - Ralph Lauren's pricing strategy ranges from $15 to over $300,000, emphasizing value and ensuring consumers feel the products are worth the price [1] - The company believes that its distinct positioning and value proposition contribute to its current success, even as the luxury market faces challenges with high pricing [1]