UBS’ Best Stocks In The AI, Growth & Low Rates Era: Top 29 US Stocks

6. Ralph Lauren Corp. (NYSE:RL)

Number of Hedge Fund Investors In Q2 2024: 43

UBS’ Sector Rating: Attractive

Sector: Consumer Discretionary

Ralph Lauren Corp. (NYSE:RL) is one of the most well-known apparel companies in the world. Since it is a high-end fashion company, the firm is dependent quite a bit on a robust economy for its performance. Yet, Ralph Lauren Corp.’s (NYSE:RL) market of the wealthy also insulates it against the cyclical downtrends that tend to drive down other discretionary stocks. This has also driven the stock’s narrative in 2024, with the shares up 39% year to date. The ongoing optimism surrounding a high-end company in a tight economy started in February when Ralph Lauren Corp.’s (NYSE:RL) stock soared by 16.80%. This was due to the firm’s online store adding 1.7 million customers, luxury sales in China growing by 30%, and increased sales from Ralph Lauren Corp.’s (NYSE:RL) own outlets. Combined, these offset the losses that the firm faced in its wholesale divisions. Looking ahead, the firm’s near-term outlook depends on its ability to capitalize on the holiday spending in the US.

While some of Ralph Lauren Corp.’s (NYSE:RL) business divisions have prospered, others, such as US wholesale have struggled. Here’s what management shared during the Q1 2025 earnings call:

“In North America wholesale, revenues decreased 13% as expected, reflecting significantly reduced sales of excess product into the off-price channel and receipt timing shifts previously discussed. Excluding the shifts, our full price sales declined roughly low single-digits, in line with our spring season-to-date sellout trends. Our AUR at wholesale increased modestly, consistent with recent trends, on well-positioned inventories in the channel. Looking ahead, we continue to expect North America wholesale declines to moderate through the remainder of fiscal ’25, with sellout more closely aligning to sell-in, maintaining our ability to chase replenishment on stronger performing core product. Our outlook also includes the planned exit of approximately 45 department store doors this fiscal year, as we continue to proactively evaluate and refine our brand presence on a door-by-door basis.”