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Can Ralph Lauren's Outerwear and Handbags Fuel Expansion?

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Key Takeaways

  • RL's women's apparel, outerwear and handbags grew more than 20% in fiscal first-quarter 2027.
  • RL's outerwear growth was supported by lightweight styles, fleece programs and bold Polo graphics.
  • RL sees further potential as these categories remain early in development across markets including China.

Ralph Lauren Corporation (RL - Free Report) is seeing strong momentum in its high-potential categories, particularly women's apparel, outerwear and handbags. Together, these categories grew more than 20% in the first quarter of fiscal 2027, significantly ahead of the company's 13% overall revenue growth. Within outerwear, lightweight styles such as the city jacket and oversized windbreaker, along with fleece programs and bold Polo graphics, are supporting seasonal newness and consumer engagement. Meanwhile, handbag initiatives continue to emphasize the foundational Polo Play and Polo ID collections, complemented by pebbled leathers, denim, beading and seasonal raffia offerings.

The company believes these categories have substantial potential for further development, stating that Ralph Lauren is still at the beginning of its journey across women's apparel, outerwear and handbags. Management noted that the market shares achieved across these three businesses represent only the start of the opportunity, while Ralph Lauren's broad lifestyle portfolio enables it to operate across categories and price points.

The opportunity is also visible geographically. In China, management highlighted disproportionate performance from the women's and handbag businesses and said that the potential in these categories extends globally, including the Chinese market. China sales increased more than 40% in the first quarter of fiscal 2027, although management expects growth of around mid-teens for the full fiscal year as the company faces tougher comparisons in the second half.

Overall, Ralph Lauren's outerwear and handbags are emerging as important growth accelerators within its strategy to drive the core and expand into additional opportunities. These accelerators increased more than 20% in the quarter, combined with management's view that the company remains at an early stage in these categories, points to continued potential for these businesses as Ralph Lauren develops its broader lifestyle portfolio.

The Zacks Rundown for RL

This Zacks Rank #3 (Hold) company’s shares have gained 1.3% in the past six months against the industry’s 3.6% decline.

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Image Source: Zacks Investment Research

From a valuation standpoint, RL trades at a forward price-to-earnings ratio of 18.34 compared with the industry’s average of 14.62.

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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.

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Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks have been discussed below:

Vince Holding Corp. (VNCE - Free Report) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company carries a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for VNCE’s current fiscal-year sales and earnings implies growth of 12.7% and 172.7%, respectively, from the year-ago reported figures. VNCE has delivered a trailing four-quarter earnings surprise of 561.4%, on average.

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).

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.

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