Ralph Lauren Stock Gains 6% in a Month: Time to Buy or Hold?

Ralph Lauren Corporation RL has entered fiscal 2027 on a strong footing, backed by sustained brand momentum, healthy consumer demand and broad-based growth across regions and channels. The company’s continued focus on brand elevation, full-price selling, premium products and disciplined execution of its Next Great Chapter: Drive strategy is strengthening its competitive position in the global luxury lifestyle market.

The momentum was evident in first-quarter fiscal 2027, wherein both the top and bottom lines surpassed estimates. Revenues came in at $1.96 billion, up 14% year over year on a reported basis. Earnings of $4.59 per share beat estimates by 27 cents.

The company witnessed broad-based regional growth. North America revenues increased 13%, with retail comps up 9% and wholesale revenues advancing 22%. Asia remained the standout performer, with revenues increasing 25% and retail comps rising 23%. China sales surged more than 40%, while Japan and Korea also delivered double-digit growth. Europe revenues increased 5% despite a challenging macroeconomic backdrop.

Ralph Lauren also continued to gain from strength across its product portfolio. Core products, representing more than 70% of the business, recorded mid-teen sales growth, while high-potential categories, including women's apparel, outerwear and handbags, increased more than 20% and continued to outpace overall company growth. The company added 1.5 million new DTC customers during the quarter, reflecting continued success in attracting women, luxury and younger consumers.

RL stock has climbed 6.2% in the past month, comfortably outperforming the broader Consumer Discretionary sector’s 3.7% rise and the Zacks Textile - Apparel industry’s 5% growth. The stock has also outpaced the S&P 500’s 2.9% gain over the same period, reflecting strong investor confidence in Ralph Lauren’s brand momentum and growth strategy.

RL Stock's Price Performance

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What’s More?

Following the stronger-than-expected fiscal first-quarter performance, Ralph Lauren raised its fiscal 2027 outlook. The company now expects constant-currency revenues to increase 5-6% on a comparable 52-week basis, up from its previous projection of 4-5%. Foreign currency is anticipated to hurt revenue growth by roughly 50-100 basis points. Fiscal 2027 includes a 53rd week, which is expected to add about one percentage point to revenue growth and provide a slight benefit to operating margin.

Ralph Lauren now expects adjusted operating margin to expand 60-80 basis points in constant currency compared with its previous forecast of 40-60 basis points. Gross margin is projected to expand 50-70 basis points, up from the prior expectation of modest expansion. The company expects gross and operating margin expansion to be weighted toward the first half, reflecting stronger fiscal first-quarter performance, the timing of marketing investments and current tariff assumptions. Higher freight and tariff costs remain headwinds, although continued AUR growth and favorable product, geographic and channel mix are expected to provide some cushion.

For the fiscal second quarter, Ralph Lauren expects constant-currency revenues to increase 5-6%, while operating margin is projected to expand 80-100 basis points, led by gross-margin improvement. AUR growth and favorable product, geographic and channel mix are expected to support profitability.

The company continues to strengthen its premium lifestyle positioning through its Next Great Chapter: Drive strategy, with a focus on elevating and energizing the brand, expanding core and high-potential categories and building consumer ecosystems across key global cities. Investments in marketing, digital commerce, advanced analytics and AI are aimed at improving customer engagement and supporting sustainable growth. Ralph Lauren's strong DTC momentum, pricing power, disciplined full-price selling and continued expansion in Asia, particularly China, remain key growth drivers.

How to Play RL Stock?

Ralph Lauren’s strong brand momentum, pricing power, expanding DTC business and robust growth in Asia, particularly China, along with its raised fiscal 2027 revenue and margin outlook, reinforce confidence in its growth prospects. The company’s focus on brand elevation, high-potential categories and disciplined full-price selling should further support profitable growth, though tariff pressures and macroeconomic uncertainty in Europe remain concerns. Given these factors, this Zacks Rank #2 (Buy) company appears to be a promising investment choice for investors seeking exposure to the premium apparel space.

Other Stocks to Consider

Some other top-ranked stocks have been discussed below:

Carter’s, Inc. CRI designs, sources and markets branded children's wear in the United States and internationally. At present, CRI currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CRI’s current fiscal-year earnings implies a decline of 10.1% from the year-ago figures. CRI delivered a trailing four-quarter earnings surprise of 415.9%, on average.

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.

The Zacks Consensus Estimate for KTB’s current fiscal-year sales and earnings implies a decline of 14.3% and 6.6%, respectively, from the year-ago figures. KTB delivered a trailing four-quarter earnings surprise of 21.2%, on average.

Crocs, Inc. CROX designs, develops, manufactures, markets, distributes and sells casual lifestyle footwear and accessories for men, women and kids. At present, CROX carries a Zacks Rank of 2.

The Zacks Consensus Estimate for CROX’s current fiscal-year sales and earnings implies growth of 1.4% and 10.8%, respectively, from the year-ago figures. CROX delivered a trailing four-quarter earnings surprise of 13.6%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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