UBS’ Top Quant Stocks In AI, IT, Healthcare & Other Sectors: Top 33 Stocks In All Sectors

12. Ralph Lauren Corp (NYSE:RL)

Number of Hedge Fund Investors In Q2 2024: 36

Sector: Consumer Discretionary

Ralph Lauren Corp (NYSE:RL) is one of the biggest fashion and apparel companies in the world. It is known for its high-end fashion products which makes it one of the more interesting consumer discretionary stocks on our list. This is because while typical discretionary stocks generally see their product demand drop during inflation and tough economic conditions, firms like Ralph Lauren Corp (NYSE:RL) can take solace in the fact that their target customers are somewhat immune.to tough economic conditions. This has been evident in the share price as well since the stock is up 35.4% year to date. Key to this bullishness is Ralph Lauren Corp (NYSE:RL)’s digital division which added 1.7 million customers as of February and its China sales which recently grew by 40%. Looking forward, the firm’s performance depends on its US division sales during the holiday season and a potential recovery in the wholesale business.

Ralph Lauren Corp (NYSE:RL)’s management commented on its US wholesale division 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.”