Ralph Lauren Q2 Earnings: Will Strong Fundamentals Outpace Macro Woes?

Ralph Lauren Corporation RL is set to report second-quarter fiscal 2026 results on Nov. 6, before market open. The Zacks Consensus Estimate for revenues is pegged at $1.9 billion, which indicates growth of 9.9% from the year-ago quarter’s reported figure.

The consensus estimate for earnings is pegged at $3.45 per share, which suggests growth of 35.8% from the year-earlier actual. The consensus mark for earnings has increased by a penny in the past 30 days.

In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 8.3%. Ralph Lauren has a trailing four-quarter earnings surprise of 8.5%, on average.

Key Trends to Watch Before RL’s Q2 Earnings

Ralph Lauren’s quarterly performance is likely to have benefited from a strong brand presence, a diverse product portfolio and expanding e-commerce capabilities, which have been strengthening its market position. The company's growing store footprint, coupled with its focus on innovation and integration of AI technology, reflects its commitment to staying ahead in the evolving fashion industry and achieving sustained growth.

RL has been experiencing growth in its digital and omnichannel business through investments in mobile, omnichannel and fulfillment. The company has been adding consumers to its direct-to-consumer business, highlighting the effectiveness of its strategies and the strong appeal of its products, which is expected to have aided the fiscal second-quarter performance. Such positives are anticipated to be reflected in its top and bottom-line results.

On the last reported quarter’s earnings call, management was optimistic about business momentum and executing the long-term game plan, continuing to elevate the brand and strengthen its positioning in the marketplace.

For the fiscal second quarter, management anticipates revenue growth in the high-single digit, on a constant-currency basis, with foreign currency expected to contribute an additional 100-150 bps. The operating margin for the quarter is forecast to expand 120-160 bps in constant currency due to operating expense leverage. Foreign currency is also expected to benefit gross and operating margins by 10-20 bps, respectively.

Ralph Lauren Corporation Price and EPS Surprise

 

Ralph Lauren Corporation price-eps-surprise | Ralph Lauren Corporation Quote

However, Ralph Lauren has been facing challenges from its extensive international exposure due to fluctuating foreign exchange rates. The company's global footprint makes it vulnerable to currency volatility and the strengthening U.S. dollar has emerged as a notable financial headwind. This currency shift has adversely impacted its revenues and earnings.

RL has been witnessing a tough operating landscape, including the ongoing macroeconomic and geopolitical uncertainties, inflationary pressures, consumer-spending-related headwinds, supply-chain disruptions, tariff-related pressures and foreign currency volatility. On the last reported quarter’s earnings call, the company noted that factors such as tariffs, inflationary pressures, supply-chain disruptions and foreign currency fluctuations remain key considerations. Given the heightened volatility, the company noted that its projections may evolve as trade dynamics and other external forces shift.

Ralph Lauren has been struggling with macro challenges and inflationary headwinds, apart from higher operating costs, for a while now. The macro indicators, including the tariff impacts, weakening consumer confidence, a higher risk of a broader consumer pullback and a highly uncertain global operating landscape, suggest caution for the upcoming quarters.

What the Zacks Model Unveils for RL Stock

Our proven model conclusively predicts an earnings beat for Ralph Lauren this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Ralph Lauren currently has an Earnings ESP of +0.67% and a Zacks Rank of 2.

Valuation Picture of RL Stock

Ralph Lauren's stock is trading at a premium valuation relative to the industry. Going by the price-to-earnings ratio, the stock is currently trading at 20.23X on a forward 12-month basis, higher than its median of 19.4X and the Textile - Apparel industry’s 15.9X.

The recent market movements show that RL shares have risen 5% in the past three months against the industry's 12% decline.

Other Stocks With the Favorable Combination

Here are some other companies that, according to our model, have the right combination of elements to beat on earnings this reporting cycle.
 
Carnival Corp CCL has an Earnings ESP of +5.07% and flaunts a Zacks Rank of 1 at present. CCL is likely to register top and bottom-line growth when it releases fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $6.4 billion, which implies growth of 7.1% from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for CCL’s quarterly earnings has moved up by a penny in the past 30 days to 24 cents per share, implying growth of 71.4% from the year-ago quarter’s reported number. Carnival Corp delivered an earnings surprise of 169.8%, on average, in the trailing four quarters.

Steven Madden SHOO currently has an Earnings ESP of +3.76% and a Zacks Rank of 3. SHOO is likely to register a bottom-line decline when it reports third-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $700.6 million, indicating 12.2% growth from the figure reported in the prior-year quarter. 

The consensus estimate for Steven Madden’s earnings is pegged at 44 cents per share, implying a 51.7% decline from the year-ago quarter’s actual. The consensus mark for earnings has increased by a penny in the past seven days. SHOO delivered an earnings surprise of 4.5% in the last quarter.

Planet Fitness PLNT has an Earnings ESP of +2.03% and a Zacks Rank of 3 at present. PLNT is likely to register top and bottom-line growth when it releases third-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $324.9 million, which implies a rise of 11.2% from the figure reported in the year-ago quarter.

The consensus estimate for Planet Fitness’ quarterly earnings has moved up by a penny in the past seven days to 72 cents per share, implying growth of 12.5% from the year-ago quarter’s reported number. PLNT delivered an earnings surprise of 6.8%, on average, in the trailing four quarters.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research