Ralph Lauren(US:RL) Shanxi Securities·2025-08-11 14:25Investment Rating - The report maintains an investment rating of "Synchronize with the market - A" for the textile and apparel industry [1]. Core Insights - The textile and apparel industry has shown mixed performance, with Under Armour reporting a 4% year-on-year revenue decline in FY2026Q1, amounting to $1.1 billion, and a net loss of $2.612 million [2][17]. - The North American market saw a 5% revenue decline to $670 million, while the international market's revenue decreased by 1% to $470 million, with EMEA market revenue increasing by 10% [3][17]. - Adidas reported a 14% year-on-year revenue growth in H1 2025, while HUGO BOSS and Ralph Lauren showed varied performance, with HUGO BOSS experiencing a 1% revenue increase in Q2 2025 and Ralph Lauren achieving a 14% revenue growth [6][59]. Summary by Sections 1. Company Performance - Under Armour's FY2026Q1 revenue decreased by 4% to $1.1 billion, with a net loss of $2.612 million compared to a loss of $30.5 million in the previous year [2][17]. - HUGO BOSS reported a 1% revenue increase in Q2 2025, while EBIT grew by 15% [6][57]. - Ralph Lauren's net revenue increased by 14% to $1.7 billion, with a net profit growth of 30.7% [59][60]. 2. Market Trends - The textile and apparel sector saw a 4.23% increase in the SW textile and apparel index, outperforming the Shanghai Composite Index by 3 percentage points [19]. - The SW textile manufacturing PE-TTM is at 21.66 times, while the apparel and home textile PE-TTM is at 28.86 times, indicating varying valuation levels across sub-sectors [22]. 3. Regional Performance - North America experienced a 5% revenue decline, while EMEA markets grew by 10% [3][4]. - The Asia-Pacific market saw a 10% revenue decline, with Latin America declining by 15% [3][4]. 4. Consumer Behavior - The retail sales of sports and entertainment products grew by 22.2% year-on-year in the first half of 2025, indicating strong demand in this segment [11]. - The overall retail sales in China for June 2025 reached 4.23 trillion yuan, growing by 4.8% year-on-year, but showing a decline compared to previous months [48][49]. 5. Future Outlook - For FY2026Q2, Under Armour expects a revenue decline of 6%-7%, with a projected gross margin decrease of 3.4-3.6 percentage points [4][18]. - The report suggests a cautious outlook for the textile and apparel industry, with varying performance expected across different regions and product categories [4][18].