One-glance verdict
Undervalued
$437.57 our estimate vs market $339.09
Wall Street consensus: $446.71 (2.1% higher than our fair-value estimate)
23% below our estimate, below the bear case
Fundamentals snapshot
Ralph Lauren Corporation
RL · NYQ · Consumer Cyclical · Apparel Manufacturing
Current price
$339.09
52-week range
$299.98 - $421.60
Market cap
$20.20B
Balance sheet
Watch
23.94x Strong cushion
Net debt $1.06B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 3.0% last year.
- Reward Returns 37.5% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 11.0% above its 5-year average P/E.
What this company does
Ralph Lauren Corporation
Ralph Lauren is a well-known fashion company that sells luxury clothing, accessories, and home goods through popular brands like Polo. The company makes money both by selling directly to shoppers in its own stores and online, which often results in higher margins (the percentage of profit from each sale), and by selling through department stores to reach more customers.
How the company got here
Ralph Lauren began in 1967 when its founder, Ralph Lauren, started by designing and selling a line of men's ties under the brand name 'Polo'. He quickly expanded to a full menswear collection in 1968, and by 1969, Bloomingdale's gave him his own in-store shop, a first for the department store. The brand introduced its famous short-sleeve polo shirt with the iconic pony logo in 1972, the same year it launched its first full women's collection and opened its first standalone store on Rodeo Drive in Beverly Hills. The company expanded into fragrances in 1978 and went international with a store in London in 1981. Ralph Lauren Corporation became a publicly traded company on the New York Stock Exchange in 1997.
What it actually does
Ralph Lauren designs, markets, and sells a wide range of upscale lifestyle products for men, women, and children. You would recognize their classic clothing items like polo shirts, sweaters, and jackets, often featuring the iconic polo player logo. Beyond clothing, the company also offers footwear, accessories like handbags and watches, home furnishings such as bedding and towels, and a line of fragrances. They even operate a handful of restaurants and coffee shops in major cities, extending the brand into hospitality experiences.
North America
This is the company's largest market, making up over 40% of its sales. In this region, Ralph Lauren sells its products in two main ways: directly to consumers and through wholesale partners. Direct sales happen through their own retail stores, including full-price and factory outlets, and their website. Wholesale (selling goods in large quantities to other businesses) involves partnerships with major department stores and specialty shops that then sell Ralph Lauren products to the public.
Europe
Making up about a third of the company's business, the European segment operates similarly to North America. It sells products directly to customers through its own stores and websites. It also has a significant wholesale business, selling to department stores and specialty retailers across Europe, the Middle East, and Latin America. A unique feature in this region is the use of concession-based shop-in-shops, which are branded sections within larger department stores.
Asia
This is a fast-growing part of the company, representing nearly a quarter of total revenue. The business in Asia relies heavily on direct-to-consumer sales through Ralph Lauren's own stores, factory outlets, and dedicated websites for the region. The company also sells its products through wholesale agreements with local retailers and operates concession-based shops within department stores in Asia, Australia, and New Zealand.
What management is betting on now
The company's current strategy, called the "Next Great Chapter: Drive," focuses on elevating the brand's luxury status and selling more products at full price rather than through discounts. A major part of this is expanding their direct-to-consumer (selling directly to customers through their own stores and website) business, which gives them more control over the customer experience and pricing. Management is also focused on winning over a new generation of younger customers and expanding in key international cities. They are investing in technology and data to personalize the shopping experience and make their operations more efficient.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$55.50M
FY2025 Q3
$677.20M
FY2025 Q4
$42.30M
FY2026 Q1
$-11.20M
FY2026 Q2
$-40.60M
FY2026 Q3
$704.00M
FY2027 Q1
$285.90M
Revenue
$1.96B
Net income
$262.20M
Diluted EPS
4.28
Operating cash flow
$339.30M
Free cash flow
$285.90M
Fetching…
Sources
Revenue
$1.98B
Net income
$151.60M
Diluted EPS
2.45
Operating cash flow
$145.30M
Free cash flow
—
Fetching…
Sources
Revenue
$2.41B
Net income
$361.60M
Diluted EPS
5.82
Operating cash flow
$779.60M
Free cash flow
$704.00M
Fetching…
Sources
Revenue
$2.01B
Net income
$207.50M
Diluted EPS
3.32
Operating cash flow
$53.20M
Free cash flow
$-40.60M
Fetching…
Sources
Revenue
$1.72B
Net income
$220.40M
Diluted EPS
3.52
Operating cash flow
$176.10M
Free cash flow
$-11.20M
Fetching…
Sources
Revenue
$1.70B
Net income
$129.00M
Diluted EPS
2.03
Operating cash flow
$122.20M
Free cash flow
$42.30M
Fetching…
Sources
Revenue
$2.14B
Net income
$297.40M
Diluted EPS
4.66
Operating cash flow
$738.40M
Free cash flow
$677.20M
Fetching…
Sources
Revenue
$1.73B
Net income
$147.90M
Diluted EPS
2.31
Operating cash flow
$97.20M
Free cash flow
$55.50M
Fetching…
Sources
Is it cheap or expensive?
Fair value $437.57 vs current price $339.09
Wall Street consensus is the average analyst price target: $446.71 (2.1% higher than our fair-value estimate).
Our most-likely fair value is $437.57 a share — about 29.0% above today's price of $339.09, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $1.1B. Interest coverage 23.9x.
Net debt
$1.06B
Interest coverage
23.94x
Ralph Lauren Corporation's profit covers its interest bill about 23.9 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
RL
BASELINE
Ralph Lauren Corporation
Total debt $3.00B Interest coverage 23.94x This is the baseline the peer rows are being compared against.
Total debt $4.16B Interest coverage 6.97x -71% vs RL Carries about 3.4x less debt cushion than RL.
Total debt $3.96B Interest coverage 34.68x +45% vs RL Carries about 1.4x more debt cushion than RL.
Total debt $1.39B Interest coverage 1.01x -96% vs RL Carries about 23.6x less debt cushion than RL.
Total debt $2.30B Interest coverage 14.50x -39% vs RL Carries about 1.7x less debt cushion than RL.
Total debt $340.84M Interest coverage 308.17x +1,188% vs RL Carries about 12.9x more debt cushion than RL.
What you should know
The case for and against RL
3 Rewards
1 Risk
Rewards
-
Revenue grew 3.0% last year.
-
Returns 37.5% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 11.0% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
21.23x
Forward P/E
16.21x
P/B
7.43x
P/S
2.42x
EV/EBITDA
13.35x
PEG ratio
1.80x
Profitability
How much profit each dollar creates
Gross margin
70.3%
Operating margin
18.4%
Net margin
11.8%
ROE
37.5%
ROA
11.0%
Health
Liquidity and balance-sheet strength
Debt / equity
1.10x
Current ratio
2.04x
Quick ratio
1.32x
Total debt
$3.00B
Total cash
$1.94B
Growth
How the business has been compounding
Revenue TTM
$8.36B
Revenue 5Y CAGR
6.9%
EPS TTM
15.97
EPS 5Y CAGR
25.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.32B
Free CF TTM
$1.02B
FCF margin
12.2%
Dividend
Shareholder payout
Yield
1.2%
Payout ratio
23.5%
Last ex-div date
2026-06-26