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Can Ralph Lauren's Marketing Strategy Fuel Long-Term Growth?
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Key Takeaways
RL's marketing investment rose to 8.2% of sales in fiscal 2027's first quarter from 7.5% a year earlier.
RL will use global campaigns, fashion shows and Wimbledon activations to deepen consumer engagement.
RL expects marketing to remain near 8% of sales in 2027, supported by strong returns from brand building.
Ralph Lauren Corporation (RL - Free Report) continues to view marketing investments as important drivers of long-term brand desirability, customer acquisition and lifetime value. In the first quarter of fiscal 2027, marketing increased to 8.2% of sales from 7.5% a year earlier, reflecting higher investment in key brand-building activations around the world. These included the spring global campaign and the men’s fashion show, as the company continued to invest in strengthening its brand and engaging consumers.
The company continues to build brand desirability through distinctive storytelling and immersive marketing initiatives. It is amplifying evergreen platforms such as Wimbledon, including the recently created Grass Court in Central Park, while continuing to launch campaigns aimed at engaging women, luxury and next-generation consumers.
Ralph Lauren expects marketing investment to remain an important part of its growth strategy, supported by what management describes as strong ROI from these activities. The company remains comfortable with its approximately 8% marketing investment guide for fiscal 2027, while noting that marketing is not viewed as having a fixed ceiling.
Management said that the impact and returns from its marketing investments have been an important factor behind its willingness to continue increasing spending over time.
Management remains comfortable with the marketing investment planned for the year, reflecting the strong returns it is seeing from its brand-building activities. Looking ahead, as the company continues to expand operating margins, it expects to further invest in marketing, reinforcing its focus on strengthening brand desirability and consumer engagement. Overall, Ralph Lauren views marketing as a long-term growth investment, with the impact reflected in stronger brand equity, new customer recruitment, retention, customer value.
The Zacks Rundown for RL
Ralph Lauren’s shares have lost 16% in the past three months compared with the industry’s 3% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, RL trades at a forward price-to-earnings ratio of 17.33 compared with the industry’s average of 14.55. Ralph Lauren currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Kontoor Brands, Inc. (KTB - Free Report) , 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 - Free Report) , 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.
Superior Group of Companies, Inc. (SGC - Free Report) produces, manufactures and sells promotional products and branded uniforms, and healthcare apparel and accessories in the United States and internationally. At present, SGC carries a Zacks Rank of 2.
The Zacks Consensus Estimate for SGC’s current fiscal-year sales and earnings implies growth of 3.1% and 39.1%, respectively, from the year-ago reported figures. SGC delivered a trailing four-quarter negative earnings surprise of 90.2%, on average.
View the Zacks #1 Rank List
Image: Bigstock
Can Ralph Lauren's Marketing Strategy Fuel Long-Term Growth?
Key Takeaways
Ralph Lauren Corporation (RL - Free Report) continues to view marketing investments as important drivers of long-term brand desirability, customer acquisition and lifetime value. In the first quarter of fiscal 2027, marketing increased to 8.2% of sales from 7.5% a year earlier, reflecting higher investment in key brand-building activations around the world. These included the spring global campaign and the men’s fashion show, as the company continued to invest in strengthening its brand and engaging consumers.
The company continues to build brand desirability through distinctive storytelling and immersive marketing initiatives. It is amplifying evergreen platforms such as Wimbledon, including the recently created Grass Court in Central Park, while continuing to launch campaigns aimed at engaging women, luxury and next-generation consumers.
Ralph Lauren expects marketing investment to remain an important part of its growth strategy, supported by what management describes as strong ROI from these activities. The company remains comfortable with its approximately 8% marketing investment guide for fiscal 2027, while noting that marketing is not viewed as having a fixed ceiling.
Management said that the impact and returns from its marketing investments have been an important factor behind its willingness to continue increasing spending over time.
Management remains comfortable with the marketing investment planned for the year, reflecting the strong returns it is seeing from its brand-building activities. Looking ahead, as the company continues to expand operating margins, it expects to further invest in marketing, reinforcing its focus on strengthening brand desirability and consumer engagement. Overall, Ralph Lauren views marketing as a long-term growth investment, with the impact reflected in stronger brand equity, new customer recruitment, retention, customer value.
The Zacks Rundown for RL
Ralph Lauren’s shares have lost 16% in the past three months compared with the industry’s 3% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, RL trades at a forward price-to-earnings ratio of 17.33 compared with the industry’s average of 14.55. Ralph Lauren currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Kontoor Brands, Inc. (KTB - Free Report) , 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 - Free Report) , 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.
Superior Group of Companies, Inc. (SGC - Free Report) produces, manufactures and sells promotional products and branded uniforms, and healthcare apparel and accessories in the United States and internationally. At present, SGC carries a Zacks Rank of 2.
The Zacks Consensus Estimate for SGC’s current fiscal-year sales and earnings implies growth of 3.1% and 39.1%, respectively, from the year-ago reported figures. SGC delivered a trailing four-quarter negative earnings surprise of 90.2%, on average.