Ralph Lauren (RL) to change course after surprising 3Q reports 

• 3Q earnings and revenue outperforms Wall Street’s estimates.
• Company’s ethics lay a solid foundation for the apparel giant.
• Diversified operations can witness mixed sentiments amid inflation.

Last year, at the Paris Fashion Week, Bella Hadid reprised the fashion industry when she stepped on the Coperin runway with a live spray-painted dress. The sight of that liquid fabric being sprayed on to the model, awestruck all fashion freaks and opened a window for fashion to integrate with technology. Among the fashion giants, Ralph Lauren (NYSE: RL) is a name that holds a value where humankind holds trust in the name of the brand. 

Ralph Lauren Corporation engages in the designing, marketing and distribution of lifestyle products spanning apparel, footwear, accessories, fragrances, home and hospitality. The company owns several brands, starting from mid-range– Chaps, to sub-premium Lauren by RL, to premium Polo RL, Double RL, Ralph Lauren Childrenswear, and Denim and Supply RL brands, up to full luxury RL Purple Label and Collection brands. It also licenses its name and branding to brands like Luxottica in eyewear, L’Oreal for cosmetics and several others.

Since Ralph Lauren caters to the target consumers from upper-middle class to upper class, the current trends of inflation may push some customers out of the race. Inflationary trends dries out the purchasing power making consumers withdraw from the luxury market. 

The RL stock prices bounced to reach up the price scale. In the past few days, RL prices have dropped by 5.20%. The volume saw volatility after a month of moving consistently. The 20-EMA moves along the price action. The RSI indicator moves closer to 50-mark to set the market at neutral, after the buyer dominance declined. The MACD records ascending seller bars while the lines witness a negative cross. 

The third quarter financial performance revealed the company outperforming all estimates. The reports revealed, for 3Q ended Dec 31, revenue increased to $1.83 billion from $1.82 billion, outperforming Wall Street’s estimate of $1.77 billion. It also reported earning $3.35 per share for 3Q. The reports reiterated its operating margin to range within 13.5% to 14% at constant currency and gross profit (GP) margin to remain the same. The reason for flat GP margin was attributed to higher average prices being met with higher freight and cost inflations. 

For the year 2022, the company, under philanthropy by Ralph Lauren Foundation, has pledged $25 million worth commitments to fund, expand and establish 5 Ralph Lauren Cancer centers. And via self-published reports, the company addresses issues like gender pay gap and inclusion for all. 

Conclusion

The RL released financial reports revealed the company’s extraordinary performance but the stocks seem to take time to reflect the same in the price action. The holder of RL can trust the support region near $105.55.

Technical levels

Support levels: $105.55 and $88.05

Resistance levels: $132.25 and $140.10

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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