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Sydnee Gatewood
Sydnee Gatewood
Articles (3355) 

Chuck Royce Comments on Ralph Lauren

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January 13, 2021 | About:

We see Ralph Lauren (NYSE:RL) as exemplifying high quality and good value. It's a position that Miles Lewis and I have worked on quite a bit this year. It has a strong balance sheet and healthy cash flows, and it's opening new stores in choice locations at reduced rents. Equally, if not more important, the company is investing in innovation, marketing, and e-commerce opportunities. Online sales growth has created a tailwind for margins that we suspect can grow stronger. We also see considerable brand value, which should help to expand gross margins in the future. Being able to raise prices is a key to measure of brand value—and Ralph Lauren did so during the pandemic. It also dramatically lowered its cost structure during the pandemic, which should make it possible for the company to return to prior profit levels on a lower base of sales.

Ralph Lauren (Nasdaq: RL) 2020

Ralph Lauren 2020

From Chuck Royce (Trades, Portfolio)'s Royce Investment Partners fourth-quarter 2020 commentary.

About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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