Ralph Lauren (RL) Stock Forecast & Price Target

Ralph Lauren Corp. has demonstrated a significant increase in digital revenue, accounting for approximately 26% of the company's overall revenue, a notable rise from the low-teens level in 2018. The company has successfully driven its Average Unit Retail (AUR) up by 26% since FY22, indicating robust pricing power and consumer demand for its products. Additionally, the digital segment, which boasts the highest operating margin compared to both the Asia-Pacific and North American regions, has seen an improvement of nearly 500 basis points over the past three years, reinforcing the company's financial stability and growth potential.

Ralph Lauren Corp. is facing challenges in North America, where a projected low-single-digit growth for FY26 reflects macroeconomic pressures and a cautious consumer environment, particularly in the latter half of the fiscal year. The company is also contending with various external risks, including volatility in commodity costs, fluctuations in consumer spending, rising interest rates, and diminishing consumer confidence, which could adversely affect its financial performance. Additionally, the significant reduction in promotion days since 2022 may further suppress sales growth by limiting consumer engagement and brand visibility.