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Can Ralph Lauren Sustain China Growth After a 40%-Plus Surge?
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Key Takeaways
RL's China sales rose more than 40% in fiscal first-quarter 2027 on a constant-currency basis.
RL's first Beijing Polo match reached 74 million livestream viewers as Greater China grew to 10% of sales.
RL expects mid-teens China growth in fiscal 2027, with low-double-digit growth over its three-year plan.
Ralph Lauren Corporation (RL - Free Report) delivered strong growth in China in the first quarter of fiscal 2027, with sales rising more than 40% on a constant-currency basis. However, management expects growth to moderate as the company faces tougher comparisons in the second half of the fiscal year. Its brand-building initiatives, selective retail expansion and consumer engagement efforts remain central to its China strategy.
China's performance benefited from global marketing campaigns and localized brand activations. The company's first-ever Polo match in Beijing reached 74 million livestream viewers, highlighting the scale of engagement generated by the event. Ralph Lauren is also concentrating on six key Chinese city clusters, with a disciplined retail rollout and continued investment in digital channels. Management said Greater China's share of the company had risen to 10%.
Product demand offers another source of opportunity. Management described the core business in China as strong, with the women's business and handbags delivering disproportionate performance. Globally, women's apparel, outerwear and handbags collectively grew more than 20% in the quarter, outpacing total company growth.
Nevertheless, management does not expect China's recent growth rate to continue at the same pace every quarter. It anticipates mid-teens sales growth in China for fiscal 2027, citing particularly strong comparisons in the second half. Over its three-year Drive strategic plan, the company continues to target low-double-digit growth in China. The broader Asian business also delivered strong results. Regional revenues increased 25% on a constant-currency basis in the fiscal first quarter, while Japan and Korea recorded double-digit growth.
Overall, Ralph Lauren's China business has benefited from brand activations, customer engagement and a focused market strategy. Although the latest growth rate may not be repeated each quarter, management's mid-teens outlook for fiscal 2027 and low-double-digit target over its three-year plan indicate its expectations for continued growth at a more moderate pace.
The Zacks Rundown for RL
This Zacks Rank #3 (Hold) company’s shares have lost 1.5% in the past six months compared with the industry’s 4.3% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, RL trades at a forward price-to-earnings ratio of 18.71 compared with the industry’s average of 15.09.
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:
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 14.3% and 175%, 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.
G-III Apparel Group, Ltd. (GIII - Free Report) designs, sources, and markets women's and men's apparel in the United States and internationally. GIII currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for GIII’s current financial-year sales and earnings is expected to decline 8.4% and 13.8%, respectively, from the corresponding year-ago reported figures. GIII delivered a trailing four-quarter negative earnings surprise of 1.4%, on average.
View the Zacks #1 Rank List
Image: Bigstock
Can Ralph Lauren Sustain China Growth After a 40%-Plus Surge?
Key Takeaways
Ralph Lauren Corporation (RL - Free Report) delivered strong growth in China in the first quarter of fiscal 2027, with sales rising more than 40% on a constant-currency basis. However, management expects growth to moderate as the company faces tougher comparisons in the second half of the fiscal year. Its brand-building initiatives, selective retail expansion and consumer engagement efforts remain central to its China strategy.
China's performance benefited from global marketing campaigns and localized brand activations. The company's first-ever Polo match in Beijing reached 74 million livestream viewers, highlighting the scale of engagement generated by the event. Ralph Lauren is also concentrating on six key Chinese city clusters, with a disciplined retail rollout and continued investment in digital channels. Management said Greater China's share of the company had risen to 10%.
Product demand offers another source of opportunity. Management described the core business in China as strong, with the women's business and handbags delivering disproportionate performance. Globally, women's apparel, outerwear and handbags collectively grew more than 20% in the quarter, outpacing total company growth.
Nevertheless, management does not expect China's recent growth rate to continue at the same pace every quarter. It anticipates mid-teens sales growth in China for fiscal 2027, citing particularly strong comparisons in the second half. Over its three-year Drive strategic plan, the company continues to target low-double-digit growth in China. The broader Asian business also delivered strong results. Regional revenues increased 25% on a constant-currency basis in the fiscal first quarter, while Japan and Korea recorded double-digit growth.
Overall, Ralph Lauren's China business has benefited from brand activations, customer engagement and a focused market strategy. Although the latest growth rate may not be repeated each quarter, management's mid-teens outlook for fiscal 2027 and low-double-digit target over its three-year plan indicate its expectations for continued growth at a more moderate pace.
The Zacks Rundown for RL
This Zacks Rank #3 (Hold) company’s shares have lost 1.5% in the past six months compared with the industry’s 4.3% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, RL trades at a forward price-to-earnings ratio of 18.71 compared with the industry’s average of 15.09.
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:
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 14.3% and 175%, 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.
G-III Apparel Group, Ltd. (GIII - Free Report) designs, sources, and markets women's and men's apparel in the United States and internationally. GIII currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for GIII’s current financial-year sales and earnings is expected to decline 8.4% and 13.8%, respectively, from the corresponding year-ago reported figures. GIII delivered a trailing four-quarter negative earnings surprise of 1.4%, on average.