Ralph Lauren Executes Its Core Priorities, Outlines Long-Term View

Ralph Lauren Corporation RL is benefiting from its unique brand portfolio, product innovations and strategic execution of its Next Great Chapter plan.

In the latest update, Ralph Lauren will continue to execute its three core growth drivers as part of its strategic plan. These growth factors include elevating and energizing its lifestyle brand, driving the core and expanding further, and winning in key cities with the company’s consumer ecosystem. The company is focused on elevating its global lifestyle brand positioning to offer premium quality, acquire new consumers and reinforce retention to boost Customer Lifetime Value. 

The company continues to advance its iconic core products while accelerating growth in high-potential, under-penetrated areas related to consumers’ evolving lifestyles. By scaling its digitally led ecosystem strategy in the top 30 cities worldwide and expanding into the next 20 high-potential markets, the company is poised for sustainable growth.

Such growth drivers are reinforced by RL’s core capabilities, which have been enhanced in the past three years. Key enablers encompass the company’s engaged teams, agile operations, modern technology and analytics, resilient partners and communities, and a strong balance sheet.

What’s Ahead For Ralph Lauren?

Ralph Lauren has reiterated its fiscal 2026 outlook given on Aug. 7, 2025, while introducing its three-year financial outlook. The outlook reflects the company’s assessment of the ongoing geopolitical and macroeconomic conditions, including inflation, tariffs, supply-chain disruptions, currency volatility and consumer spending headwinds.

From fiscal 2025 through fiscal 2028, management predicts revenues to witness a compound annual growth rate of mid-single digits at constant currency.  Operating margin is likely to expand nearly 100-150 basis points by fiscal 2028 in constant currency, thanks to gross margin expansion and leveraged operating expenses with constant investments in the long-term priorities. Capital expenditures are anticipated to represent roughly 4-5% of revenues annually through fiscal 2028. 

In the next three years, Ralph Lauren intends to return at least $2 billion on a cumulative basis through fiscal 2028 to shareholders via dividends and share repurchases, subject to its board approval and market conditions. RL has hiked its quarterly cash dividend by about 10% to 91.25 cents per share at the beginning of fiscal 2026. This reflects an annual dividend of $3.65 per share. The company can repurchase up to $1.6 billion in shares of its Class A Common Stock under its existing share repurchase authorization.

Management is confident that the Next Great Chapter plan will drive sustainable growth, expand market share and strengthen Ralph Lauren’s leadership in the luxury lifestyle space, while maximizing long-term shareholder value. This Zacks Rank #1 (Strong Buy) company’s shares have surged 33.6% year to date against the industry’s 29.3% decline.

Other Stocks to Consider in the Consumer Discretionary Space

Boyd Gaming BYD, which is a gaming company, currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here. 

BYD delivered a trailing four-quarter earnings surprise of 9.1%, on average. The Zacks Consensus Estimate for BYD’s current financial-year EPS indicates growth of 5.2% from the year-ago number. 

Guess?, Inc. GES, which is a designer and marketer of casual apparel and accessories, currently carries a Zacks Rank #2 (Buy). 

GES delivered a trailing four-quarter earnings surprise of 26.7%, on average. The Zacks Consensus Estimate for GES’ current financial-year sales indicates growth of 7% from the year-ago number. 

Hanesbrands Inc. HBI, which is a designer and manufacturer of apparel essentials for men, women and children in the US and internationally, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for HBI’s current financial-year EPS is expected to rise 65% from the corresponding year-ago reported figure. HBI delivered a trailing four-quarter earnings surprise of 56.1%, on average.

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

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