Ralph Lauren, IBD Stock Of The Day, Rebounds After Fears Of Slower Sales Growth

The American clothing manufacturer and retailer Ralph Lauren is rebounding toward a buy point after sinking on earnings a few weeks ago. The stock’s recovery makes it IBD’s Stock Of The Day for Thursday.

On Wednesday, Ralph Lauren shares grazed their buy point of 380, according to MarketSurge. On Thursday, the stock slipped about 1% but hit an intraday high of 379.57, just a hair below its buy point.

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Shares Dip On Ebbing Sales Growth

Shares of Ralph Lauren are in a two-part base that began in mid-December. Until early February, the stock was in a flat base formed firmly atop its 21-day exponential moving average. A sharp tumble after the Feb. 5 earnings report broke technical support and sent shares nearly to their 200-day moving average.

Ralph Lauren stock then rebounded in an eight-day rally through Wednesday. Aggressive investors could target an early entry at 377.07.

The early-February earnings report showed that Ralph Lauren’s sales growth decelerated, which caused investors to worry that the business was losing momentum. As an apparel company, Ralph Lauren can be particularly susceptible to consumer sentiment, which might cause shoppers to cut back on nonessentials — like high-end clothing.

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In the December quarter, Ralph Lauren reported same-store sales growth of 9%, just above the 8.9% analysts expected, according to FactSet. However, that rate was lower than the 13% growth in same-store sales from the previous three quarters of 2025.

North American same-store sales in 2025 rose 7% vs. 8% in 2024. European same-store sales for the quarter were flat, whereas they had climbed 17% the year before.

Despite the same-store sales declines, the company did surpass Wall Street expectations for the quarter. Revenue grew 12% to $2.406 billion vs. an expected $2.311 billion. Earnings per share were right on the mark, at $5.82.

Ralph Lauren’s Big Gains

Ralph Lauren’s stock has been on an extended run-up over the past several years, outpacing the broader market and many of its apparel peers. Since the start of 2023, shares are up more than 250%. Last year, the stock gained 53%. So far in 2026, shares are up about 5.5%.

The company’s recent success has been due to its revitalized marketing and a nimble supply chain, which allowed it to weather last year’s tariff jolt better than most. For some analysts, those factors outweighed the abating same-store sales.

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“This report should reinforce the market’s view (that) Ralph Lauren is one of softlines’ highest quality stocks and better able to navigate tariffs as well as choppy global macro trends than most,” UBS analyst Jay Sole wrote, using a retail industry term for apparel products.

In a separate note, published a day later, UBS raised its price target for Ralph Lauren from 474 to 477 a share.

Analysts from BNP Paribas echoed those sentiments. We see “a pullback in the stock as an opportunity to accumulate shares,” wrote BNP Paribas Senior Analyst Laurent Vasilescu.

Among the reasons for Ralph Lauren’s continued success was a decision to reduce its footprint in lower-end, third-party retailers that risked diluting the brand, according to UBS’ Sole.

“We think these changes will allow (Ralph Lauren) to operate a ‘Go it Alone’ business model, creating opportunities for (Ralph Lauren) to drive more revenues in direct channels (such as) online and stores,” he wrote.

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Ralph Lauren Raises 2026 Outlook

Ralph Lauren raised its outlook for its fiscal 2026, which ends in March. The company’s new guidance is for sales to increase between high single digits and low double digits, up from an earlier range of 5% to 7% growth. Its operating margin now targets growth of between 100 to 140 basis points, up from a previous outlook of 60 to 80 basis points.

“The gross margin expansion was driven by (average unit retail) growth, favorable product mix, and lower cotton costs, more than offsetting increased U.S. tariffs as well as other product costs,” wrote BTIG analyst Robert Drbul in a research note published in February.

Ralph Lauren has a buy rating with an average price target of 418.86, according to analysts polled by FactSet. That price target implies 12% growth for the stock. However, Sole and others see the stock rising as much as 40% over the next 12 months.

“We think the market doesn’t appreciate the transformational changes the company has made over the past 5 years,” Sole wrote earlier this month.

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