BTIG Positive on Ralph Lauren (RL), Citing Margin Expansion

Ralph Lauren Corporation (NYSE:RL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.

BTIG analyst Bob Drbul, on February 6, raised the firm’s target price on Ralph Lauren by 8.8% to $435 (from $400) and reiterated his Buy recommendation on the stock. He likes the margin expansion, which the company exhibited in Q3 FY2026, both on an operating level (+220 basis points to 20.9%) and a gross level (+150 basis points). The margin expansion was driven by a more favorable product mix and cheaper cotton costs, which more than offset the negative impact from higher US tariffs.

This research update from BTIG comes just a day after Ralph Lauren released its Q3 FY2026 earnings on February 5. The results were headlined by net income growth of 21.6% YoY to $361.6 million (from $297.4 million). On a per-diluted-share basis, earnings grew slightly faster, at 24.9% YoY, to $5.82 (from $4.66).

The strong earnings growth was primarily driven by double-digit revenue growth and margin expansion. Revenue grew 12% YoY, with Asia being the fastest-growing segment (22% YoY). Gross profit margin, meanwhile, improved by 150 basis points YoY to 69.9%. Margin expansion was caused by average selling price growth (in the high-teens), more favorable product mix, and lower cotton prices, which more than offset the negative impact of new US tariffs.

Ralph Lauren Corporation (NYSE:RL) designs, markets, and distributes luxury lifestyle products in the apparel, footwear, accessories, home, fragrances, and hospitality categories across North America, Europe, and Asia under the Ralph Laurent brand. The company is based in New York, New York, and was founded in 1967 by Ralph Lauren.

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Disclosure: None. This article is originally published at Insider Monkey.