You must take a look at luxury apparel retailer Ralph Lauren Corporation (RL Quick QuoteRL - Free Report) , as this stock has all that’s needed to grab a spot in one’s portfolio. Right from its solid fundamentals to stock price movement and earnings history, Ralph Lauren has it all to catch investors’ eye. Notably, the stock has jumped over 25% in the last three months. So, let’s take a deeper look at what’s leading to the bull run for this New York-based company.

Growth Drivers

Starting with Ralph Lauren’s solid surprise history, the company flaunts a track record of delivering positive earnings surprises in 19 out of the past 21 quarters. Evidently, the company delivered its sixth consecutive positive surprise in first-quarter fiscal 2017. Also, the company’s top line was ahead of expectations.

Further, Ralph Lauren's growth story looks compelling as it possesses a stellar portfolio of globally recognized brands and a healthy financial status. The company has been able to strengthen its position in the market based on its premium brands, while many other retailers struggled to retain consumers amid recession and changing fashion trends.

Ralph Lauren continues to progress with its mix shift plan toward retail and international, with the vision of greater profitability in these sections than the wholesale and domestic businesses. The company also remains focused on building its brand image which is essential for luxury retailers. In the retail segment, the company continues to invest in Polo, Ralph Lauren and D&S stores along with growing its eCommerce and omni-channel presence. This, along with constant initiatives focused on profitable areas, should boost growth.

Not to forget, Ralph Lauren boasts a sturdy balance sheet that provides it with the financial flexibility to drive future growth. The company’s ability to generate a strong operating cash flow has helped in the execution of its long-term strategies such as expanding globally, enhancing product and brand offerings, as well as building operational infrastructure. Moreover, the company’s commitment to shareholders is evident from its practice of returning them excess cash via share buybacks and dividend payments.

Looking ahead, management remains confident of Ralph Lauren’s performance, based on its efforts related to global brand reorganization, constant infrastructural investments, eCommerce enhancements and improved product pricing. We believe these are likely to enable the company to deliver growth and achieve operational efficiency.

However, the company has been suffering from weak year-over-year comparisons for profit and sales for over three years. It provided a soft sales and margin outlook for fiscal second quarter and fiscal 2017 owing to the intentional pullback in inventory receipts, store closures, price management, and other initiatives, alongside challenging retail traffic trends and a highly promotional retail backdrop. This is in sync with its Way Forward Plan which aims to retrieve the company to profitability and sustained growth over the long term.

In addition, high dependence on outside suppliers and competition from players like The Estée Lauder Companies Inc. (EL Quick QuoteEL - Free Report) , Coach Inc. , V.F. Corp. (VFC Quick QuoteVFC - Free Report) , among others, pose as concerns.

Though the outlook for fiscal 2017 is slightly heartening, we believe the Way Forward Plan along with other fundamental strengths; make Ralph Lauren the right investment option. So, it’s time you invest in Ralph Lauren and take advantage of its solid growth story, before it is too late.

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