Can RL's Next Great Chapter Strategy and Digital Push Sustain Growth?

Ralph Lauren Corporation RL is benefiting from its iconic brand portfolio, product innovations and disciplined execution of its Next Great Chapter strategy. The company is accelerating its digital transformation by enhancing personalization, strengthening data-driven decision-making and delivering seamless omnichannel experiences. 

Digital transformation drives growth, with investments in personalization, mobile, omnichannel and fulfillment enhancing consumer engagement. Digital sales increased 15% in North America, 17% in Europe and 36% in Asia. Digital sales now represent a growing share of total revenues, supported by continuous investments in personalization, enhanced mobile capabilities and integrated loyalty programs designed to connect with younger and more diverse consumers.

Ralph Lauren is optimizing distribution, strengthening wholesale partnerships and enhancing its retail network to reinforce its premium positioning. Retail and wholesale remain key pillars, with flagship stores, premium distribution and partnerships boosting comparable sales across North America, Europe and Asia in second-quarter fiscal 2026. Leveraging advanced analytics, RL tailors product recommendations, optimizes pricing and sharpens its regional marketing strategies to drive stronger consumer engagement and profitability.

The company’s Next Great Chapter initiative serves as the foundation of its growth strategy, emphasizing brand elevation, consumer centricity and operational agility. This strategy is designed to create a more balanced global footprint by expanding into high-growth markets, such as Asia, while strengthening its presence in core regions. In second-quarter fiscal 2026, global direct-to-consumer comparable store sales increased 13%, backed by positive retail comps in all regions and channels.

Hence, RL is confident that the Next Great Chapter plan will drive sustainable growth, expand market share and reinforce its leadership in the luxury lifestyle space. Ralph Lauren’s retail and wholesale operations remain core pillars of its premium lifestyle business, contributing to a balanced and diversified revenue mix.

RL’s Price Performance, Valuation and Estimates

Ralph Lauren’s shares have surged 32.2% in the past six months against the industry’s 7% decline.

From a valuation standpoint, RL is trading at a forward price-to-earnings ratio of 21.99X compared with the industry’s average of 16.48X.

The Zacks Consensus Estimate for RL’s fiscal 2026 and fiscal 2027 earnings per share (EPS) indicates year-over-year growth of 24% and 9.9%, respectively. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has moved south in the past 30 days.

Ralph Lauren currently carries a Zacks Rank #3 (Hold).

Key Picks in the Consumer Discretionary Space

Crocs, Inc. CROX, which is a leading footwear company, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

CROX delivered a trailing four-quarter earnings surprise of 14.3%, on average. The Zacks Consensus Estimate for Crocs’ current financial-year EPS indicates a decline of 7.9% 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 45%, on average. The Zacks Consensus Estimate for GES’ current financial-year sales indicates growth of 8% from the year-ago number. 

Kontoor Brands, Inc. KTB, which is an apparel company, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for KTB’s current financial-year EPS is expected to rise 12.5% from the corresponding year-ago reported figure. KTB delivered a trailing four-quarter earnings surprise of 14%, on average.

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

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