Ralph Lauren Corporation RL is demonstrating strong brand and product momentum by executing its long-term strategy across geographies, channels and categories. By expanding brand assortments, introducing innovative products and optimizing distribution channels, the company is well-positioned for sustained growth.

RL on Track With “Next Great Chapter: Accelerate” Plan

Ralph Lauren continues to make strong progress on its strategic initiatives to enhance business performance. The company is on track to exceed its sales and profit goals under the "Next Great Chapter: Accelerate Plan." This plan aims to streamline operations, upgrade technology and enhance the customer experience.

As part of the plan, RL is focused on three strategic pillars: elevating and energizing its lifestyle brand, driving core offerings while expanding, and winning key cities with its consumer ecosystem. The company completed its brand reshuffling by transitioning Chaps into a licensed business. Ralph Lauren’s strategy emphasizes premium product offerings, data-driven promotions, efficient inventory management, and expansion across key locations and sales channels.

RL's DTC & Omnichannel Strategies Drive Growth

Ralph Lauren is advancing its digital and omnichannel expansion by investing in mobile, online shopping and fulfillment services. The company’s digital business, including its own websites, department store partnerships, online retailers and social commerce, continues to experience strong growth. RL added nearly two million new consumers to its direct-to-consumer (DTC) business in the third quarter of fiscal 2025, marking steady year-over-year growth. This growth was largely driven by younger, high-value customers who are less price-sensitive, reinforcing the brand’s appeal to the next generation. Social media engagement continues to grow, with an expanding follower base across platforms like TikTok, Threads, Instagram, Line and Douyin.

In the fiscal third quarter, Ralph Lauren achieved significant digital sales growth across key regions, with notable increases in Europe and Asia. The company is experiencing strong DTC comparable store sales growth while expanding its connected ecosystems in major markets. Strong brand positioning and sustained demand for core and seasonal products have driven higher full-price sales and increased average unit retail prices, surpassing expectations.

How is RL Positioned for 2025?

Ralph Lauren’s stock momentum and stronger North American wholesale performance provide a solid foundation for resilience in a competitive landscape. For fiscal 2025, RL anticipates constant-currency revenue growth of 6-7% year over year, including 100-150 bps of adverse currency impacts. Management now expects the operating margin to increase 120-160 bps in constant currency, driven by a gross margin expansion of 130-170 bps.

For the fiscal fourth quarter, management anticipates revenues to increase 6-7% on a constant-currency basis. The operating margin is expected to expand around 120-140 bps in constant currency, driven by gross margin expansion of 80-120 bps and slight operating expense leverage. Wholesale is projected to continue its positive trajectory, with North America sell-in aligning more closely with sell-out, and Europe wholesale receipts shifting to the second half of fiscal 2025.

Challenges in RL’s Pathway

Despite its strong performance, Ralph Lauren faces challenges due to its extensive international presence, which makes it vulnerable to fluctuations in foreign exchange rates. The strengthening U.S. dollar has created a financial hurdle, affecting both revenues and earnings.

A stronger dollar is expected to slightly reduce overall revenues for fiscal 2025 and entail significant impacts on fourth-quarter results. Additionally, foreign exchange fluctuations are projected to slightly lower gross and operating margins in 2025, with a more pronounced effect in the fourth quarter.

Synopsis of Other Stocks

Under Armour UAA is one of the leading designers, marketers, and distributors of authentic athletic footwear, apparel, and accessories for a wide variety of sports and fitness activities in the United States and internationally. Under Armour’s direct-to-consumer (DTC) business has undergone a strategic transformation, with a stronger emphasis on full-price sales and premium product positioning.

V.F. Corp VFC designs, manufactures and markets branded apparel and related products. The company is benefiting from its ongoing strategic initiatives, particularly the Reinvent transformation program, which focuses on brand-building and improved operating performance. VFC's efforts to strengthen brands like Vans and The North Face, reduce costs and enhance its balance sheet are promising.

G-III Apparel (GIII) designs, sources and markets women's and men's apparel. G-III Apparel's strong growth underscores its focus on the development of its own brands, including DKNY, Karl Lagerfeld, Donna Karan and Vilebrequin. G-III Apparel is accelerating its digital growth and aims to become a leading omnichannel organization, making digital and omnichannel expansion a key priority. GIII's commitment to brand building, effective marketing, cost management and market expansion provides a solid foundation for sustained growth.

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