We recently compiled a list of the Jim Cramer Discussed These 11 Restaurants and Retail Stocks. In this article, we are going to take a look at where Ralph Lauren Corporation (NYSE:RL) stands against the other restaurant and retail stocks Jim Cramer recently talked about.
Jim Cramer, the host of Mad Money, recently took a closer look at the state of the consumer, focusing on restaurants and retailers to understand the broader economic picture. According to Cramer, there is a common misconception about the economy, where people tend to think of the consumer as one homogenous group. He pointed out that there isn’t a single consumer whose behavior can explain the overall economic trends. Instead, Cramer identified two distinct types of consumers in today’s market.
“One consumer’s going out looking for absolute bargains. The other consumer’s looking for what I call “premium value” or “value at a price”. More expensive, but relative to similar offerings, you get a great deal.”
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This conclusion came after Cramer listened to a variety of retail and restaurant earnings calls. He expressed skepticism about relying on broad aggregate data, such as national retail sales, which he believes doesn’t capture the full picture. Instead, Cramer prefers analyzing individual companies, piecing together information from different sources to form a clearer sense of the consumer landscape. He believes this approach provides a more accurate snapshot than relying on overarching statistics.
Cramer also noted that the rise of these two different consumer types has perplexed Wall Street. In the past, there was typically one consumer who either spent or didn’t, but that has changed. Now, there are two groups of consumers, each spending in different places.
In his conclusion, Cramer urged investors to stop focusing on whether consumers are struggling financially or facing challenges. The key, he said, is understanding choice.
“The bottom line: Stop trying to figure out if the consumer’s cash strapped. Forget the headwinds. What matters is choice. Right now, consumers are lapping up absolute value at the lowest price or premium value, meaning better stuff that’s a good deal versus the competition. But everything else? Maybe not so much. Hence why the aggregate numbers just don’t tell the story.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 19. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A man and woman in business attire walking down a street, bags of clothing in hand.
Ralph Lauren Corporation (NYSE:RL)
Number of Hedge Fund Holders: 30
Cramer counted Ralph Lauren Corporation (NYSE:RL) among the companies that provide quality products and called it a premium value business.
“Darden joins three other premium value businesses, Williams-Sonoma, Ralph Lauren, and Lululemon. All had great numbers, also goods that cost a lot of money yet in each case, consumers recognize that their product is worth every penny. That’s why I call it premium value or value at a price. If you’re willing to pay up for quality, but you’re still somewhat cost-conscious, they got you covered.”
Ralph Lauren (NYSE:RL) is a well-known designer, marketer, and distributor of lifestyle products, including apparel, home goods, and accessories. In the second quarter of fiscal 2025, the company reported notable growth in its Retail Average Unit Retail (AUR), which rose by 10%. This was in addition to a 9% increase from the previous year. Management noted that this performance exceeded expectations and was driven by its higher brand positioning and reduced discounting strategies.
During the quarter, the company successfully attracted 1.5 million new customers to its direct-to-consumer (DTC) businesses, representing a high single-digit increase from the previous year. This customer acquisition was predominantly driven by younger, higher-value segments, who were more willing to pay a premium for the brand, reinforcing the company’s shift toward less price-sensitive shoppers.
Ralph Lauren (NYSE:RL) also saw its total retail comparable sales increase by 10%, supported by its expanded penetration of full-price selling across all regions. Additionally, its strong financial performance was highlighted by a 170 basis point increase in its adjusted gross margin, which reached 67.1%. This growth was primarily attributed to favorable shifts toward full-price and international sales, as well as improvements in AUR and lower cotton costs.
Overall RL ranks 10th on our list of the restaurant and retail stocks Jim Cramer recently talked about. While we acknowledge the potential of RL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
