Ralph Lauren Corporation (RL) is a leader in the design, marketing and distribution of premium lifestyle products in four categories: apparel, home, accessories and fragrances. For more than 47 years, Ralph Lauren's reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets.
It has shown very strong earnings growth over the last several years. Over the past five years, the price rose 85% and has a healthy dividend yield of 1.39%.
The price
The stock has a PE ratio of 17.18. Currently there are 9 analysts that rate Ralph Lauren a buy, no analysts rate it a sell, and 5 rate it a hold.
The Company
The company has a market cap of $11.63 billion, and its strength can be seen in multiple areas.
Ralph Lauren has a largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. It has a very successful management of debt levels because RL's debt-to-equity ratio is very low at 0.14 and is currently below the industry average. Net operating cash flow has increased by 40.67% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.43%.
The company had excellent progress on their strategic initiatives and opened several stores in key markets around the world and continued to innovate with the introduction of Polo for women, as well as the development of Polo Sport which will be launched this fall. To leverage the power of brands and drive future growth for the company, they announced a new structure for their global brand management organization which also will enhance the consistency of their brand presentation around the world and generate substantial operating efficiencies
Looking forward:
Since foreign exchange and global consumer spending are unpredictable, the company will try to take some decisive actions to offset some of these ongoing external pressures.
The company is taking important steps to expand its offices in the Starrett-Lehigh Building, a place that all fashion designers love.
The Company currently expects net revenues for fiscal 2016 to increase by mid-single digits in constant currency.
Operating margin for fiscal 2016 is currently expected to be 180-230 basis points below the prior year’s level due to negative foreign currency effects.
They have an experienced and proven management team in place, and as they move to a new global organizational structure, these executive leadership changes will let them to maximize the potential of brands and of course drive global growth.
In the end, analysts believe the company has strong potential for the future.
