Ralph Lauren (RL) Stock Forecast & Price Target

Ralph Lauren Corp. experienced an 18% rise in wholesale sales, significantly influenced by healthy underlying demand and the timing of shipments, indicating strong market traction. The company welcomed 1.5 million new direct-to-consumer shoppers year-over-year in the second fiscal quarter, highlighting positive consumer response to its core products and high-potential categories, particularly women's apparel and handbags. Furthermore, the company anticipates an 8.5% increase in net revenues to $2.326 billion, alongside an expected operating margin expansion driven by effective expense management, solidifying a positive outlook for the company's financial performance.

Ralph Lauren Corp. is anticipated to experience significant pressure on its gross margins in the fourth quarter due to tariffs, challenging year-over-year comparisons, and timing shifts, which may hinder financial performance during this traditionally weaker sales period. The company’s guidance suggests a low-single-digit revenue decline, highlighting a reduction in exposure to off-price channels, which could impact future sales growth. With North America contributing 42% of last year's fourth-quarter sales, the expectation of weaker performance in this key region further contributes to a negative outlook for the company's financial stability moving forward.