Ralph Lauren Corporation (NYSE:RL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now. BTIG analyst Bob Drbul, on February 6, raised the firm’s target price on Ralph Lauren by 8.8% to $435 (from $400) and reiterated his Buy recommendation on the stock. He likes the margin expansion, which the company exhibited in Q3 FY2026, both on an operating level (+220 basis points to 20.9%) and a gross level (+150 basis points). The margin expansion was driven by a more favorable product mix and che ...

Core Insights - Bath & Body Works has launched its first authorized brand storefront on Amazon, making popular products available for Prime members, which enhances accessibility for U.S. consumers [1][2] - Amazon dominates the U.S. online beauty and personal care market with a 47% share, significantly ahead of Sephora at 9%, indicating a strategic move for Bath & Body Works to tap into this large market [2] - The partnership with Amazon is part of Bath & Body Works' broader strategy to expand customer access points, which also includes selling products in over 1,000 college campus stores [2] Company Strategy - CEO Daniel Heaf, who joined Bath & Body Works in May, has outlined a "consumer-first formula" aimed at achieving profitable and sustainable growth through innovation, brand revitalization, marketplace competitiveness, and operational efficiency [3] - The Amazon partnership is described as a significant milestone in the company's strategy for the fiscal year, aiming to reclaim brand presence on the platform after previously relying on third-party resellers [4]

Core Viewpoint - Coty Inc. has faced disappointing financial performance, leading to a price target cut by Canaccord Genuity from $3.50 to $2.50 while maintaining a Hold rating [1][2]. Financial Performance - Coty reported a 1% year-over-year increase in second-quarter fiscal 2026 sales, reaching $1.67 billion, which exceeded analyst expectations [2]. - The company experienced a net loss of $126.9 million, a significant decline from a net income of $20.4 million in the same quarter last year [2]. - Adjusted EPS improved to $0.14 from $0.11 a year ago, indicating some operational resilience despite overall losses [2]. Guidance and Future Outlook - Coty issued disappointing guidance, anticipating a mid-single-digit decline in like-for-like sales due to weakening trends in Consumer Beauty sales [3]. - The company has withdrawn its fiscal year 2026 adjusted EBITDA and free cash flow guidance, indicating uncertainty in future performance [3]. Strategic Initiatives - The company acknowledged its disappointing financial performance over the past year and a half, reflecting this in its current share price [4]. - Coty is conducting a portfolio review to identify opportunities for unlocking shareholder value, including the recent divestiture of its remaining stake in Wella at the end of CY25 [4]. Company Overview - Coty Inc. is one of the largest beauty companies globally, specializing in fragrances, color cosmetics, and skin and body care products, with a portfolio of over 40 brands sold in more than 130 countries [5].

Core Viewpoint - Victoria's Secret & Co. is set to release its fourth quarter 2025 earnings on March 5, 2026, with a live conference call scheduled for 8:30 a.m. ET, providing insights into the company's financial performance and strategic direction [1][2]. Company Overview - Victoria's Secret & Co. (NYSE: VSCO) is a specialty retailer offering a range of fashion-inspired collections, including bras, lingerie, apparel, and fragrances, with a commitment to empowering women [3]. - The company operates over 1,400 retail stores across approximately 70 countries and employs more than 30,000 associates [3]. Earnings Call Details - The earnings release will be available on the company's investor relations website approximately one hour before the conference call [1]. - Participants can join the call via a dedicated link or dial-in numbers provided for both domestic and international audiences [2].

Core Insights - lululemon athletica inc. (LULU) and Guess? Inc. (GES) are positioned differently in the global apparel market, with LULU focusing on premium athleisure and GES as a heritage lifestyle brand [2][3] Group 1: lululemon (LULU) - LULU has achieved a 7% revenue growth in Q3 of fiscal 2025, with international revenues increasing by 33% and China Mainland revenues up by 46% in constant currency [5][6] - The company's "Power of Three x2" plan aims to double men's, digital, and international revenues by 2026, emphasizing product innovation and category expansion [6] - Despite its premium positioning, LULU faces challenges from rising trade and tariff pressures, which have impacted gross margins [7][8] - LULU's stock trades at a forward P/E of 15.97X, which is below its 3-year median of 37.04X but above GES's 9.7X [21][22] Group 2: Guess (GES) - GES has a strong international presence, particularly in Europe and Asia, and focuses on categories like denim and handbags [9][10] - In Q3 of fiscal 2026, GES reported improved gross margins due to lower promotions and better inventory discipline, despite macro pressures [13] - GES's stock has shown a total return of 47.4% over the past six months, outperforming LULU's decline of 9% [19] - The company is prioritizing margin expansion and cash generation, with ongoing investments in digital platforms and omni-channel capabilities [12][13] Group 3: Comparative Analysis - The Zacks Consensus Estimate for GES suggests an 8% year-over-year sales growth for fiscal 2026, while LULU's estimate indicates a 4.5% growth [14][16] - Recent estimate revisions for GES reflect growing investor confidence, while LULU's estimates show a decline in EPS [14][18][26] - Overall, GES is viewed as a more compelling investment choice due to its attractive valuation, steady international growth, and disciplined cost management [25][26]

Core Insights - KARL LAGERFELD and AARK Developers have partnered to develop the KARL LAGERFELD Residences, a luxury beachfront project in Ras Al Khaimah, valued at over USD 1.4 billion, with completion expected in 2028 [1][3][5] Project Overview - The project will feature 663 sea view residences ranging from one to four bedrooms, including private pools for select units, 20 podium villas, 10 sky villas/penthouses, and 11 beachfront villas, each with its own private pool [3] - Amenities will include two signature cafés and restaurants, a beach club, a sky bar with an infinity pool, and a 1000ft private beach, emphasizing architectural excellence and resort-style living [3] Market Context - Al Marjan Island is positioned as a luxury hub for tourism, hospitality, and entertainment, further enhanced by the upcoming Wynn Al Marjan Island integrated resort, set to open in 2027 [4] - This project represents KARL LAGERFELD's second branded initiative in the Middle East, with a launch event planned in Dubai for Q1 of 2026 [5] Company Background - KARL LAGERFELD is expanding its presence in hospitality and branded living, with existing projects including hotels in Macau and Marbella, and residences in Dubai and Lisbon [6] - AARK Developers is recognized for its design-led approach and has delivered projects worth over AED 5 billion, focusing on quality and long-term value [10]

Core Insights - Bath & Body Works (BBWI) is facing significant challenges, with a sharp decline in stock price and a new 52-week low reached [1][3][5] - The company announced declining sales and earnings, leading to a 25% drop in stock price on the same day [2][5] - CEO Daniel Heaf has initiated a turnaround plan focusing on core products and aims for $250 million in cost savings by 2027 [3][5] Stock Performance - BBWI's stock is currently priced at $15.82, reflecting a decrease of 24.81% with a change of $5.22 [4] - The stock has fluctuated between a low of $15.43 and a high of $16.53 during the day [4] - Over the past year, the stock reached a high of $41.87 and a low of $15.43, with a market capitalization of approximately $3.39 billion [4] Analyst Insights - Robert W. Baird has set a price target of $19 for BBWI, indicating a potential increase of approximately 20.1% from its current price [1][5]

Core Insights - Bath & Body Works Inc. experienced a significant stock decline of nearly 25% after reporting disappointing third-quarter earnings and reducing its full-year outlook due to macro consumer pressures [1][3] - The company reported a net income of $77 million, or 37 cents per share, down from $106 million, or 49 cents per share, in the previous year, with adjusted earnings of 35 cents per share compared to the expected 39 cents [3][9] - The company has announced a turnaround plan aiming for $250 million in cost savings by 2027, focusing on core products and attracting younger consumers [2][5] Financial Performance - Third-quarter net income was $77 million, a decrease from $106 million year-over-year, with earnings per share of 37 cents compared to 49 cents last year [3] - Revenue for the quarter was reported at $1.59 billion, falling short of the expected $1.63 billion [9] - The company anticipates fourth-quarter revenue to decline in the high single digits, contrasting with Wall Street's expectation of a 1.5% increase [4] Strategic Initiatives - The "Consumer First Formula" strategy includes four priorities: creating innovative products, reigniting the brand, winning in the marketplace, and operating efficiently [5] - The company plans to exit certain product categories, such as haircare and men's grooming, to refocus on core offerings like body care and fragrances [6] - Bath & Body Works aims to enhance its digital presence by revamping its app and website, and lowering the free shipping threshold in early 2026 [8] Market Positioning - CEO Daniel Heaf emphasized the need to adapt to evolving consumer preferences for efficacy, ingredient-led products, and modern packaging [7] - The company is recruiting influencers to generate social buzz and attract new consumers [7]

Core Viewpoint - Victoria's Secret & Co. is set to release its third quarter 2025 earnings on December 5, 2025, with a live conference call scheduled for 8:30 a.m. ET to discuss the results [1][2]. Company Overview - Victoria's Secret & Co. (NYSE: VSCO) is a specialty retailer offering modern, fashion-inspired collections, including bras, lingerie, apparel, and fragrances, with a commitment to empowering over 30,000 associates across more than 1,400 retail stores in nearly 70 countries [3].

Financial Data and Key Metrics Changes - The company's second quarter revenue growth was 14%, exceeding the high single-digit outlook, with total adjusted gross margin expanding 70 basis points to 67.7% [21][22] - Adjusted operating margin increased 210 basis points to 13.5%, with adjusted operating income rising 34% [22][23] - The company ended the period with $1.6 billion in cash and short-term investments and $1.2 billion in total debt [28] Business Line Data and Key Metrics Changes - Core product sales grew mid-teens, driven by strong performance in cotton cable knit and seasonal Oxford shirts [12] - Women's apparel and high-potential categories like handbags saw strong double-digit growth, outpacing total company growth [12][14] - Digital ecosystem sales grew double digits, reflecting balanced growth across regions [21] Market Data and Key Metrics Changes - Asia and Europe led performance with sales increasing 16% and 15% respectively, while North America sales grew 13% [21] - China sales increased more than 30%, driven by strong consumer response to brand-building activities [16][25] - North America retail comps were up 13%, with digital comps growing 15% [23] Company Strategy and Development Direction - The company introduced the Next Great Chapter Drive Plan, aiming to capture a larger share of the $400 billion premium and luxury market [4][5] - The strategy focuses on elevating the lifestyle brand, driving core products, and expanding in key cities [5][15] - The company plans to continue investing in brand activations and technology to enhance consumer engagement [17][18] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the second half of the year due to potential consumer headwinds and general volatility [7] - Despite macroeconomic uncertainties, the company is confident in capturing market share opportunities [7][29] - The full-year revenue growth outlook was raised to approximately 5%-7%, reflecting better-than-expected performance in the first half [28][29] Other Important Information - The company added 1.5 million new consumers to its DTC businesses, driven by digital and full-price store customers [10] - The company plans to exit 90-100 wholesale doors in fiscal 2026, with approximately half related to Hudson's Bay [24] - The company launched an AI styling tool, Ask Ralph, developed with Microsoft, to enhance consumer shopping experience [17] Q&A Session Summary Question: Updated outlook for consumer health and brand awareness - Management noted strong momentum in business and no significant changes in consumer behavior, with a focus on attracting full-price customers [40][42] Question: Pricing strategy and tariff mitigation - Management discussed the sustained AUR growth driven by brand investment and pricing actions, with expectations for continued gross margin expansion despite tariff pressures [48][50] Question: Engagement strategies for North America value-oriented consumers - The company emphasized flexibility in pricing and a compelling value proposition to appeal to value-sensitive customers during the holiday season [56][58] Question: North America wholesale trajectory - Management indicated healthy growth in North America wholesale, with expectations for some pressure in the second half due to planned reductions in off-price sales [76][78] Question: Performance in outlet versus full-price channels - Consistent growth was observed across full-price and outlet stores, with a focus on expanding full-price locations while consolidating outlet presence [80]