Investment Thesis
Ralph Lauren demonstrates exceptional financial health with strong profitability metrics (12.9% net margin, 27.3% ROE) and robust cash generation (1.0B operating cash flow, 652.2M free cash flow). The company shows solid growth momentum with 6.7% revenue growth and 14.9% net income growth, coupled with conservative leverage (0.43x debt/equity) and excellent liquidity (2.10x current ratio), positioning it well for sustainable returns.
RL Strengths
- Superior profitability with 69.9% gross margin indicating strong pricing power and brand value
- Excellent cash conversion with 10.6% free cash flow margin and 1.0B operating cash flow generation
- Strong balance sheet with 2.0B cash, low leverage at 0.43x debt/equity, and 24.3x interest coverage
- Solid growth acceleration with net income growing 14.9% YoY faster than revenue at 6.7% YoY
- Outstanding returns on equity (27.3%) and assets (10.1%) demonstrating efficient capital deployment
RL Risks
- Fashion and apparel sector cyclicality and sensitivity to consumer discretionary spending trends
- Capital intensity with 356.7M capex annually (5.8% of revenue) limiting cash flexibility
- Significant insider activity (11 Form 4 filings) warrants monitoring for potential signaling concerns
Key Metrics to Watch
- Revenue growth sustainability and geographic expansion performance
- Gross margin maintenance amid potential inflationary input costs and competitive pressures
- Free cash flow generation and capital allocation priorities (dividends, buybacks, debt reduction)
RL Financial Metrics
RL Profitability Ratios
RL Balance Sheet & Liquidity
RL 5-Year Financial Trend
5-Year Trend Summary: RALPH LAUREN CORP's revenue has grown significantly by 12% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.58 reflects profitable operations.
RL Growth Metrics (YoY)
RL Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $2.1B | $297.4M | $4.66 |
| Q2 2026 | $1.7B | $147.9M | $2.31 |
| Q1 2026 | $1.5B | $168.6M | $2.61 |
| Q3 2025 | $1.9B | $276.6M | $4.19 |
| Q2 2025 | $1.6B | $146.9M | $2.19 |
| Q1 2025 | $1.5B | $132.1M | $1.96 |
| Q3 2024 | $1.8B | $216.5M | $3.20 |
| Q2 2024 | $1.6B | $146.9M | $2.18 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
RL Capital Allocation
RL SEC Filings
Access official SEC EDGAR filings for RALPH LAUREN CORP (CIK: 0001037038)