Ralph Lauren Corporation RL continued to expand its global retail presence, opening 22 new owned and partner stores during the quarter. The new locations included The Grove in Los Angeles and the Stanford Shopping Center in Palo Alto, marking the company’s second store in the Bay Area ecosystem and first in Silicon Valley. The company also opened in Istanbul, new Polo stores in Sydney and Perth and renovated the Bicester outlet outside London. The Palo Alto store and renovated Bicester outlet also include Ralph’s Coffee.
The company highlighted that its Win in Key Cities strategy focuses on strengthening its presence across the company’s top 30 global cities while laying the groundwork for long-term growth in the next 20 cities.
The strategy was accompanied by strong Direct-to-Customer (DTC) momentum. Global DTC comps increased 12%, led by Ralph Lauren stores and digital commerce. Asia remained the leading region for growth, with sales increasing 25% across all key markets. China continued to perform strongly, with sales increasing more than 40% as the company continued to build its brand in the market. Local activations, including the Polo Cup, supported performance in China, along with further expansion across its top six city clusters and on digital.
However, management is maintaining a disciplined approach to expansion and a prudent view of the consumer environment in Europe, where macroeconomic pressures remain. The company recently opened a new store in Saint-Tropez while continuing to monitor the broader consumer context.
Overall, Ralph Lauren’s continued expansion across key city ecosystems is intended to deepen its presence in important markets, while strong DTC performance and international growth provide continued momentum for the company’s global expansion strategy.
The Zacks Rundown for RL
Ralph Lauren’s shares have lost 1.2% in the past six months compared with the industry’s 4.5% decline.
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From a valuation standpoint, RL trades at a forward price-to-earnings ratio of 16.98 compared with the industry’s average of 14.40. Ralph Lauren currently carries a Zacks Rank #3 (Hold).
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The Zacks Consensus Estimate for RL’s current and next fiscal-year earnings implies a rise of 13.3% and 10.6%, respectively, from the year-ago figures.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
Kontoor Brands, Inc. KTB, a lifestyle apparel company, designs, manufactures, procures, sells and licenses apparel, footwear and accessories, primarily under the Wrangler, Lee and Helly Hansen brands. At present, KTB carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for KTB’s current fiscal-year sales and earnings implies a decline of 14.3% and 6.1%, respectively, from the year-ago figures. KTB delivered a trailing four-quarter earnings surprise of 21.4%, on average.
Savers Value Village, Inc. SVV, a thrift operator, sells second-hand merchandise in retail stores in the United States, Canada and Australia. SVV currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for SVV’s current financial-year sales and earnings is expected to rise 6.1% and 6.7%, respectively, from the corresponding year-ago reported figures. SVV delivered a trailing four-quarter negative earnings surprise of 1.6%, on average.
Vince Holding Corp. VNCE provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company carries a Zacks Rank of 2.
The Zacks Consensus Estimate for VNCE’s current fiscal-year sales and earnings implies growth of 12.7% and 172.7%, respectively, from the year-ago reported figures. VNCE has delivered a trailing four-quarter earnings surprise of 561.4%, on average.
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Ralph Lauren Corporation (RL): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).