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Ralph Lauren Corp (RL)
NYSE:RL
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Ralph Lauren
(NYSE:RL)
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Rating:75Outperform
Price Target:
$399.00
▲(12.49% Upside)
The score is driven primarily by strong financial profitability and a constructive earnings outlook with raised guidance, partially offset by near-term margin headwinds (tariffs and Q4 pressure). Technical signals are currently softer (negative MACD and below short-term moving averages), and valuation appears somewhat premium with a modest dividend yield.
Positive Factors
High and Improving Margins
Sustained, multi‑point margin expansion reflects durable pricing power and operating leverage from a premium brand mix and higher full‑price sell‑through. Elevated gross and operating margins support long‑term cash generation and reinvestment capacity even with cyclical pressures.
Direct‑to‑Consumer & Customer Acquisition
Rapid DTC and digital customer additions deepen first‑party data, raise lifetime value, and reduce reliance on wholesale. Strong retail comps and digital growth improve margin profile and provide a durable channel mix that supports pricing, product control, and long‑term consumer engagement.
Strong Cash Generation & Liquidity
Robust cash generation and sizable liquidity give the company flexibility to fund brand investments, elevated marketing, and capital returns while managing short‑term cost headwinds. Ample cash buffers support strategic initiatives and downside protection during macro or input‑cost swings.
Negative Factors
Tariff‑Driven Cost Pressure
Sustained tariff increases raise structural input costs for an apparel manufacturer reliant on global sourcing. Unless offset by sourcing changes or price increases, tariffs compress gross margins and force tradeoffs between margin preservation and volume growth over multiple quarters.
Weaker Free Cash Flow Conversion & Leverage
Declining FCF conversion reduces internal funding for capex, marketing and buybacks, increasing reliance on operating performance to finance growth. Coupled with moderate leverage, this lowers financial flexibility and heightens sensitivity to sustained margin or sales pressure.
Wholesale Mix & Inventory Risk
A strategic pullback from off‑price wholesale elevates near‑term revenue and timing risk while inventory rose ~10% CC. The mix shift supports brand elevation long term but can pressure near‑term sales, working capital, and markdown risk if demand or timing misaligns.
Ralph Lauren (RL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.51B
Dividend Yield0.93%
Average Volume (3M)421.76K
Price to Earnings (P/E)26.1
Beta (1Y)1.14
Revenue Growth12.32%
EPS Growth29.40%
CountryUS
Employees14,800
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)6.22
Shares Outstanding38,759,380
10 Day Avg. Volume494,021
30 Day Avg. Volume421,763
Financial Highlights & Ratios
PEG Ratio0.92
Price to Book (P/B)5.22
Price to Sales (P/S)1.91
P/FCF Ratio13.25
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue2.90
Enterprise Value/Gross Profit4.19
Enterprise Value/Ebitda16.58
Forecast
1Y Price Target
$412.17Price Target Upside16.20% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Ralph Lauren Business Overview & Revenue Model
Company DescriptionRalph Lauren Corporation designs, markets, and distributes lifestyle products in North America, Europe, Asia, and internationally. The company offers apparel, including a range of men's, women's, and children's clothing; footwear and accessories, which comprise casual shoes, dress shoes, boots, sneakers, sandals, eyewear, watches, fashion and fine jewelry, scarves, hats, gloves, and umbrellas, as well as leather goods, such as handbags, luggage, small leather goods, and belts; home products consisting of bed and bath lines, furniture, fabric and wallcoverings, lighting, tabletop, kitchen linens, floor coverings, and giftware; and fragrances. It sells apparel and accessories under the Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, and Chaps brands; women's fragrances under the Ralph Lauren Collection, Woman by Ralph Lauren, Romance Collection, and Ralph Collection brand names; and men's fragrances under the Polo Blue, Ralph's Club, Safari, Purple Label, Polo Red, Polo Green, Polo Black, Polo Sport, and Big Pony Men's brand names. The company's restaurant collection includes The Polo Bar in New York City; RL Restaurant in Chicago; Ralph's in Paris; The Bar at Ralph Lauren located in Milan; and Ralph's Coffee concept. It sells its products to department stores, specialty stores, and golf and pro shops, as well as directly to consumers through its retail stores, concession-based shop-within-shops, and its digital commerce sites. The company directly operates 504 retail stores and 684 concession-based shop-within-shops; and operates 175 Ralph Lauren stores, 329 factory stores, and 148 stores and shops through licensing partners. Ralph Lauren Corporation was founded in 1967 and is headquartered in New York, New York.
How the Company Makes MoneyRalph Lauren generates revenue primarily through the sale of its branded products across multiple categories. Key revenue streams include direct-to-consumer sales from its retail and outlet stores, e-commerce platforms, and wholesale distribution to third-party retailers. The company also earns income from licensing agreements for products such as fragrances and home goods. Significant partnerships with department stores and multi-brand retailers enhance distribution reach. Additionally, brand marketing and the high perceived value of its products contribute to strong profit margins, while international expansion into markets such as Asia and Europe offers further growth opportunities.
Ralph Lauren Key Performance Indicators (KPIs)
Any
Net Revenue by Geography
Shows the distribution of net revenue across various regions, providing insight into Ralph Lauren's market strength and potential growth areas globally.
Shows the distribution of net revenue across various regions, providing insight into Ralph Lauren's market strength and potential growth areas globally.
Data provided by:
The Fly
The FlyRalph Lauren Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q3-2026)
| Next Earnings Date:May 21, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operating momentum: revenue growth exceeded expectations (10% in Q3), margins expanded significantly (gross margin +140 bps; operating margin +200 bps), AUR accelerated (18%), and the company raised FY26 guidance while generating robust cash flow and adding millions of new customers. Near-term headwinds—primarily tariff-related cost pressure, Q4 transitional timing shifts, strategic reductions in off-price wholesale, and higher marketing spend—are expected to weigh on margins in the immediate term. However, management framed these as tactical choices in support of a multi-year brand elevation plan and expects margin expansion across the plan horizon.Q3-2026 Updates
Positive Updates
Total Company Revenue Growth Above Expectations
Third quarter constant-currency revenue grew 10%, above the mid-single-digit outlook, driven by broad-based performance across geographies, channels, and product categories.
Regional Outperformance — Asia & China Leading
Asia sales increased 22% in Q3 with China up more than 30%, outpacing company guidance and supported by strong events (Singles' Day, Golden Week), Douyin expansion, and local campaigns.
Retail Comp and Digital Momentum
Total company retail comps increased 9%; digital ecosystem (own sites + wholesale digital) grew mid-teens, reflecting balanced strength between brick-and-mortar and digital channels.
Strong Margin Expansion and Profitability
Adjusted gross margin expanded 140 basis points to 69.8%; adjusted operating margin expanded 200 basis points to 20.7%; operating profit increased 21% year-over-year.
Average Unit Retail (AUR) Acceleration
AUR grew 18% in the quarter (well ahead of guidance), driven primarily by reduced discounting, favorable channel/product mix, targeted pricing, and strong full-price sell-throughs.
Customer Acquisition and Engagement
Added 2.1 million new consumers to DTC in the quarter (versus 1.9 million last year); social media followers grew high single digits to over 68 million; full-price customer mix increased.
Cash Generation and Capital Returns
Approximately $650 million in free cash flow year-to-date and $500 million returned to shareholders year-to-date; $2.3 billion in cash & short-term investments and $1.2 billion total debt at quarter end.
Raised Fiscal 2026 Outlook
Company raised fiscal 2026 revenue guidance to high single to low double digits (from 5%–7%), expects foreign currency to benefit revenue by ~200–250 basis points and now anticipates full-year operating margin expansion of ~100–140 basis points.
Product & Category Strength — Core and High-Potential Categories
Core product (70%+ of business) sales grew low double digits; high-potential categories (women's apparel, outerwear, handbags) grew high teens and outpaced total company growth.
Brand Elevation & Marketing Impact
Holiday campaigns produced 2.9 billion global impressions; launched TikTok Shop in the U.S. (first always-on luxury presence); immersive pop-ups and Olympic/major event activations drove new customer acquisition and retention.
Negative Updates
Tariff-Related Cost Pressure and Near-Term Margin Headwinds
Higher U.S. tariffs are flowing through cost of goods sold and are expected to be a meaningful gross margin headwind through the first half of next fiscal year; Q4 gross and operating margins are expected to decline with Q4 operating margin guided to contract ~80–120 basis points.
Q4 Sequential Moderation and Transitional Challenges
Company expects Q4 constant-currency revenue to moderate to approximately mid-single digits due to strategic pull-forward of receipts, reduction in off-price wholesale, and timing shifts; Q4 is described as a smaller transitional quarter between seasons.
Wholesale Dynamics and Off-Price Reductions
Management expects a decline in Q4 North America wholesale revenues driven by a planned strategic reduction in off-price sales, timing of spring shipments, and continuing wholesale door exits and consolidation (including industry developments at Saks).
Europe Performance Complexity and Outlet Softness
Europe revenue grew 4% in Q3 (strong two-year stack), but the region faced a promotional competitive backdrop; outlet softness partially offset full-price gains and led to increased marketing investments that pressured regional margins.
Inventory Movement and Increase
Net inventory increased 10% in constant currency, in line with revenue growth; while positioned to meet demand, higher inventories could be a risk if demand moderates or timing shifts persist.
Rising Marketing and Operating Expense Levels
Adjusted operating expenses grew 9% and marketing increased to 8% of Q3 sales (from 7.1% prior year); management raised full-year marketing outlook to 7.5%–8%, which supports long-term growth but exerts short-term expense pressure.
Moderating Input Cost Tailwinds
Favorable cotton and modest freight tailwinds helped Q3 gross margin, but cotton benefit is expected to moderate through fiscal 2026 and freight is roughly expected to be neutral for the full year, leaving some input-cost uncertainty going forward.
Q4 Margin Pressure Drivers Beyond Tariffs
Beyond tariffs, Q4 margin pressure also reflects timing of marketing campaigns (e.g., Olympics, Milan fashion show), timing shifts of receipts, and a very strong Q4 prior-year gross margin baseline, increasing the year-over-year comparison difficulty.
Company Guidance
Ralph Lauren raised its fiscal 2026 outlook and provided detailed quarterly and full‑year guidance: it now expects constant‑currency revenue growth of high‑single to low‑double digits (up from prior 5–7%), with a foreign‑currency tailwind of ~200–250 bps for the year; by region, North America is expected to grow at the high end of mid‑single digits, Europe at the high end of mid‑single digits, and Asia mid‑teens (up from prior high‑single to low‑double digits). Full‑year operating margin is now expected to expand ~100–140 bps (vs. prior 60–80 bps) and gross margin to expand ~40–80 bps, with FX benefiting gross and operating margins by ~20 and ~50 bps respectively; Q4 constant‑currency revenues are guided to about mid‑single‑digit growth (FX +200–300 bps), Q4 AUR growth is expected high‑single to low‑double digits, but Q4 gross and operating margins are expected to decline—with Q4 operating margin contracting ~80–120 bps and operating expenses roughly flat as a percent of sales—and FX is expected to benefit Q4 gross/op margins by ~50 and ~100 bps. Tax rate for both Q4 and the full year is guided to 19–21%, CapEx is expected to be ~4–5% of sales, tariffs are called out as a meaningful gross‑margin headwind through the first half of next fiscal year (with mitigation over time), and the company reiterated a roughly 175‑bp cotton tailwind across FY25–26.Ralph Lauren Financial Statement Overview
Summary
Strong profitability and operating efficiency (gross margin ~69%, improving net margin ~11%) support a solid score, reinforced by strong ROE (~33%). The main offset is weaker free cash flow conversion (FCF down ~13% TTM; FCF/net income ~0.61) and moderate leverage (debt-to-equity ~1.10).Income Statement
Ralph Lauren has demonstrated strong revenue growth with a TTM increase of 3.91%, supported by a robust gross profit margin of 69.22%. The net profit margin has improved to 11.28%, indicating enhanced profitability. EBIT and EBITDA margins are healthy at 15.06% and 17.99%, respectively, showcasing operational efficiency. Overall, the income statement reflects a positive growth trajectory and profitability.85
Very Positive
Balance Sheet
The company maintains a stable balance sheet with a debt-to-equity ratio of 1.10, indicating moderate leverage. Return on equity is strong at 33.42%, reflecting efficient use of equity to generate profits. The equity ratio stands at 35.14%, suggesting a balanced approach to financing. While the leverage is manageable, continuous monitoring is advisable to maintain financial stability.75
Positive
Cash Flow
Operating cash flow remains robust, though free cash flow has declined by 12.58% in the TTM period. The operating cash flow to net income ratio is 1.28, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has decreased to 0.61, suggesting potential challenges in converting earnings to free cash flow. Overall, cash flow management is adequate but could benefit from improvements in free cash flow generation.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.57B | 7.08B | 6.63B | 6.44B | 6.22B | 4.40B |
| Gross Profit | 5.24B | 4.85B | 4.43B | 4.17B | 4.15B | 2.86B |
| EBITDA | 1.32B | 1.21B | 1.05B | 952.80M | 1.04B | 221.30M |
| Net Income | 854.30M | 742.90M | 646.30M | 522.70M | 600.10M | -121.10M |
Balance Sheet | ||||||
| Total Assets | 7.35B | 7.05B | 6.60B | 6.79B | 7.72B | 7.89B |
| Cash, Cash Equivalents and Short-Term Investments | 1.65B | 2.08B | 1.78B | 1.57B | 2.60B | 2.78B |
| Total Debt | 2.85B | 2.67B | 2.68B | 2.88B | 3.39B | 3.62B |
| Total Liabilities | 4.77B | 4.46B | 4.15B | 4.36B | 5.19B | 5.28B |
| Stockholders Equity | 2.58B | 2.59B | 2.45B | 2.43B | 2.54B | 2.60B |
Cash Flow | ||||||
| Free Cash Flow | 667.70M | 1.02B | 904.90M | 193.50M | 549.00M | 273.10M |
| Operating Cash Flow | 1.09B | 1.24B | 1.07B | 411.00M | 715.90M | 380.90M |
| Investing Cash Flow | -294.10M | -264.10M | -256.80M | 471.50M | -717.90M | 195.00M |
| Financing Cash Flow | -723.30M | -704.00M | -665.60M | -1.21B | -665.70M | 356.80M |
Ralph Lauren Technical Analysis
Neutral
354.70
Price Trends
361.06
Negative
340.97
Positive
308.09
Positive
Market Momentum
-1.37
Positive
45.78
Neutral
29.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RL, the sentiment is Neutral. The current price of 354.7 is below the 20-day moving average (MA) of 361.30, below the 50-day MA of 361.06, and above the 200-day MA of 308.09, indicating a neutral trend. The MACD of -1.37 indicates Positive momentum. The RSI at 45.78 is Neutral, neither overbought nor oversold. The STOCH value of 29.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RL.
Ralph Lauren Risk Analysis
Ralph Lauren disclosed 30 risk factors in its most recent earnings report. Ralph Lauren reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ralph Lauren Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $21.51B | 26.15 | 34.01% | 0.93% | 12.32% | 29.40% | |
68 Neutral | $3.97B | 22.77 | 10.58% | 1.33% | -1.88% | -5.94% | |
66 Neutral | $3.64B | 16.05 | 49.11% | 3.36% | 9.90% | -12.67% | |
65 Neutral | $3.01B | 9.33 | 6.70% | 0.22% | 0.52% | -45.80% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $7.92B | 17.68 | 23.63% | 2.58% | -1.23% | 109.67% | |
53 Neutral | $8.29B | 37.92 | 12.93% | 1.95% | -3.12% | ― |
* Consumer Cyclical Sector Average
RL
Ralph Lauren
354.70
84.97
31.50%
PVH
PVH
65.65
-13.38
-16.93%
VFC
VF
21.18
-2.93
-12.15%
LEVI
Levi Strauss & Co
20.29
1.78
9.59%
KTB
Kontoor Brands
65.53
-19.64
-23.06%
ZGN
Ermenegildo Zegna
9.71
0.88
9.97%
Ralph Lauren Corporate Events
Business Operations and StrategyExecutive/Board Changes
Ralph Lauren Adds Cesar Conde to Board of Directors
Positive
Jan 15, 2026
On January 15, 2026, Ralph Lauren Corporation expanded its Board of Directors to 12 members and appointed Cesar Conde, Chairman of NBCUniversal News Group, as a Class B director, with his term running until the 2026 Annual Meeting of Stockholders or until a successor is named. The company highlighted Conde’s track record leading large, high-growth media organizations and his experience in global operations, digital strategy and audience engagement—skills that management expects will support Ralph Lauren’s “Next Great Chapter: Drive” strategy and strengthen the brand’s efforts to deepen connections with consumers worldwide and pursue long-term sustainable growth and value creation.
The most recent analyst rating on (RL) stock is a Buy with a $425.00 price target. To see the full list of analyst forecasts on Ralph Lauren stock, see the RL Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.