Ralph Lauren Corp (RL) is hanging tough in the weak market, recently rebound from a key trend line to push shares back into elevated territory. With a Q2 earnings surprise of 15% and bullish projection, this Zacks #1 Rank stock is a fashionable take on momentum.
Company Description
Ralph Lauren Corp is a fashion merchandising company that operates across multiple brands. The company was founded in 1967 and has a market cap of $11.51 billion.
Ralph Lauren has held up well in the recently volatile market, buoyed by strong Q2 results from early August that came in well ahead of expectations.
Second-Quarter Results
Revenue for the period was up 32% from last year to $1.5 billion. Earnings also came in strong at $1.90, 31% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 30% over the last four quarters.
Wholesales sales were up 29% to $673 million. Retail sales were up 37% to $814 million.
Financial Profile
Ralph Lauren also has a strong financial profile, with cash and short-term investments of $952 million and just $304 million in total debt.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 37 cents to $6.73. The next-year estimate is pegged at $7.77, a bullish 15% growth projection.
Valuation
On the valuation front, RL’s PEG ratio of 1.2 is only marginally higher than the benchmark for value of 1.
12-Month Chart
On the chart, share remain in elevated territory after hitting a new 52-week high on the good quarter. Look for support from the trend line on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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