We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ralph Lauren's (RL) Growth Strategies Seem Good: Here's Why
Read MoreHide Full Article
Ralph Lauren Corporation (RL - Free Report) is poised well for growth, thanks to its digital endeavors and other robust strategies. The company has been making significant progress in expanding its digital and omnichannel capabilities through investments in mobile, omnichannel and fulfillment. Ralph Lauren’s “Next Great Chapter” plan appears encouraging.
Analysts seem quite optimistic about the company. The Zacks Consensus Estimate for fiscal 2025 sales and earnings per share (EPS) is currently pegged at $6.9 billion and $11.10, respectively. These estimates show corresponding growth of 3.5% and 7.7% year over year. The consensus estimate for fiscal 2026 sales and EPS is presently $7.2 billion and $12.50, respectively, indicating increases of 4.3% and 12.6%.
Buoyed by such strengths, shares of this apparel and accessories designer have surged 41.4% compared with the industry’s 12.3% growth in the past six months.
Let’s Delve Deeper
Ralph Lauren continues to scale and expand its connected retail capabilities, including virtual selling appointments, “buy online, pick up in store”, endless aisle product availability and more. The company launched its first-ever full catalog Ralph Lauren mobile app last holiday season, thus efficiently leveraging its connected retail capabilities to deliver the most personalized and content-rich platform.
Image Source: Zacks Investment Research
Ralph Lauren added more than 5 million new consumers to its DTC businesses in the fiscal year. Its followers on social media grew low double digits year over year to more than 58 million, driven by TikTok, Instagram, Line and Douyin. Region-wise, digital sales were up 11% in Europe and 19% in Asia in fourth-quarter fiscal 2024.
During the fiscal 2024, the company witnessed solid DTC comp growth apart from its connected ecosystem expansion across significant markets. Comps were up mid-single digits across both its brick-and-mortar stores and digital channels. The company remains focused on digital investments to continue the creation of content for all platforms, enhancing digital capabilities to improve the user experience and leveraging AI and data to serve its consumers more efficiently.
As part of the “Next Great Chapter” plan, it completed the transition of Chaps to a licensed business, thereby concluding its portfolio realignment. This enables it to focus on core brands, as part of the “Next Great Chapter” elevation strategy. In addition, the company’s strategy of product elevation, personalized and targeted promotion, disciplined inventory management and favorable channel and geographic mix bode well.
For fiscal 2025, management anticipates year-over-year revenue growth (at cc) in the low-single digits, revolving around 2-3%. This includes 90 bps of positive impacts of currency. Management expects the operating margin to grow in the range of 100-120 bps at cc on higher gross margin and operating expense leverage. The gross margin is likely to increase in the band of 50-100 bps in cc, with AUR growth, lower cotton costs, and favorable geographic and channel mix shifts more than offsetting higher product costs. Foreign currency is anticipated to hurt gross and operating margins by about 30 bps. The fiscal tax rate is likely to be in the range of 23-24%.
For the fiscal first quarter, the company anticipates revenues to grow slightly on a cc basis. On a reported basis, including nearly 160 bps of negative foreign currency impacts, revenues are projected to be down slightly year over year. This includes approximately 50 bps of negative impacts of the earlier timing of Easter. Operating margin is likely to expand around 60-80 bps in cc on higher gross margins. The gross margin is expected to grow in the range of 140-180 bps on lower cotton costs and AUR growth.
Given the aforesaid positives, Ralph Lauren stock seems to be a decent investment bet now. A VGM Score of B further adds strength to this current Zacks Rank #3 (Hold) company.
G-III Apparel Group has a trailing four-quarter earnings surprise of 547.9%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 sales indicates an increase of 3.7% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 18.3%, on average.
The consensus estimate for RCL’s 2024 sales and EPS indicates increases of 16.6% and 61.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank # 2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 11.9% and 10.6%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.7%, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Ralph Lauren's (RL) Growth Strategies Seem Good: Here's Why
Ralph Lauren Corporation (RL - Free Report) is poised well for growth, thanks to its digital endeavors and other robust strategies. The company has been making significant progress in expanding its digital and omnichannel capabilities through investments in mobile, omnichannel and fulfillment. Ralph Lauren’s “Next Great Chapter” plan appears encouraging.
Analysts seem quite optimistic about the company. The Zacks Consensus Estimate for fiscal 2025 sales and earnings per share (EPS) is currently pegged at $6.9 billion and $11.10, respectively. These estimates show corresponding growth of 3.5% and 7.7% year over year. The consensus estimate for fiscal 2026 sales and EPS is presently $7.2 billion and $12.50, respectively, indicating increases of 4.3% and 12.6%.
Buoyed by such strengths, shares of this apparel and accessories designer have surged 41.4% compared with the industry’s 12.3% growth in the past six months.
Let’s Delve Deeper
Ralph Lauren continues to scale and expand its connected retail capabilities, including virtual selling appointments, “buy online, pick up in store”, endless aisle product availability and more. The company launched its first-ever full catalog Ralph Lauren mobile app last holiday season, thus efficiently leveraging its connected retail capabilities to deliver the most personalized and content-rich platform.
Image Source: Zacks Investment Research
Ralph Lauren added more than 5 million new consumers to its DTC businesses in the fiscal year. Its followers on social media grew low double digits year over year to more than 58 million, driven by TikTok, Instagram, Line and Douyin. Region-wise, digital sales were up 11% in Europe and 19% in Asia in fourth-quarter fiscal 2024.
During the fiscal 2024, the company witnessed solid DTC comp growth apart from its connected ecosystem expansion across significant markets. Comps were up mid-single digits across both its brick-and-mortar stores and digital channels. The company remains focused on digital investments to continue the creation of content for all platforms, enhancing digital capabilities to improve the user experience and leveraging AI and data to serve its consumers more efficiently.
As part of the “Next Great Chapter” plan, it completed the transition of Chaps to a licensed business, thereby concluding its portfolio realignment. This enables it to focus on core brands, as part of the “Next Great Chapter” elevation strategy. In addition, the company’s strategy of product elevation, personalized and targeted promotion, disciplined inventory management and favorable channel and geographic mix bode well.
For fiscal 2025, management anticipates year-over-year revenue growth (at cc) in the low-single digits, revolving around 2-3%. This includes 90 bps of positive impacts of currency. Management expects the operating margin to grow in the range of 100-120 bps at cc on higher gross margin and operating expense leverage. The gross margin is likely to increase in the band of 50-100 bps in cc, with AUR growth, lower cotton costs, and favorable geographic and channel mix shifts more than offsetting higher product costs. Foreign currency is anticipated to hurt gross and operating margins by about 30 bps. The fiscal tax rate is likely to be in the range of 23-24%.
For the fiscal first quarter, the company anticipates revenues to grow slightly on a cc basis. On a reported basis, including nearly 160 bps of negative foreign currency impacts, revenues are projected to be down slightly year over year. This includes approximately 50 bps of negative impacts of the earlier timing of Easter. Operating margin is likely to expand around 60-80 bps in cc on higher gross margins. The gross margin is expected to grow in the range of 140-180 bps on lower cotton costs and AUR growth.
Given the aforesaid positives, Ralph Lauren stock seems to be a decent investment bet now. A VGM Score of B further adds strength to this current Zacks Rank #3 (Hold) company.
Key Picks
Some better-ranked companies are G-III Apparel Group (GIII - Free Report) , Royal Caribbean (RCL - Free Report) and lululemon athletica (LULU - Free Report) .
G-III Apparel Group sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
G-III Apparel Group has a trailing four-quarter earnings surprise of 547.9%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 sales indicates an increase of 3.7% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 18.3%, on average.
The consensus estimate for RCL’s 2024 sales and EPS indicates increases of 16.6% and 61.9%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank # 2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 11.9% and 10.6%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.7%, on average.