Ralph Lauren Corporation RL stock is in a good spot on the back of its digital success and other robust strategies. RL’s digital business, including its directly-operated sites, departmentstore.com, pure players and social commerce, is quite impressive. Its “Next Great Chapter” plan appears encouraging too. 

Let’s delve deeper.

Ralph Lauren’s Smart Strategies

Ralph Lauren is making significant progress in expanding its digital reach and omnichannel capabilities through investments in mobile, omnichannel and fulfillment. The company is expanding its connected retail capabilities, including virtual selling appointments, “buy online, pick up in store”, endless aisle product availability and more. Ralph Lauren’s mobile app has been efficiently leveraging its connected retail capabilities to deliver the most personalized and content-rich platform.

The company added 1.3 million new consumers via its direct-to-consumer (DTC) businesses in the most recent quarter. Its followers on social media grew in the low teens year over year to more than 60 million, driven by TikTok, Threads, Instagram, Line and Douyin. Region-wise, digital sales were up 14% in Europe and 21% in Asia. 

Global DTC comparable store sales (comps) jumped 5% year over year in the same quarter, backed by continued brand elevation, double-digit increases in average unit retail and positive retail comps at all regions. The company is focused on digital investments to continue the creation of content for all platforms, enhancing digital capabilities to improve the user experience and leveraging AI and data to serve its consumers more efficiently.

In addition, the company’s strategy of product elevation, personalized and targeted promotion, disciplined inventory management and favorable channel and geographic mix bodes well. Ralph Lauren concentrates on elevating and energizing its lifestyle brand, driving the core while expanding other businesses and winning in major cities with its consumer ecosystem.

As a result, Ralph Lauren remains on track to exceed its top and bottom-line targets under the “Next Great Chapter” plan. It had also announced measures to accelerate its “Next Great Chapter plan”, which aim to create a simplified global organizational structure and roll out improved technological capabilities.

Ralph Lauren’s Struggles

Despite the aforementioned positives, RL struggles with tough macro challenges, including inflationary pressures. Higher compensation, rent and occupancy costs and elevated marketing investments are acting as deterrents by adding up to costs. As such, the company has been witnessing higher operating expenses for a while now. 

Apart from this, Ralph Lauren has been witnessing a dismal performance across its North America segment’s wholesale channel for a while. Revenues from the North America wholesale business fell 13% year over year in the first quarter of fiscal 2025, owing to significantly lower sales of excess product into the off-price channel and receipt timing shifts. This has hurt the segment’s performance, whose revenues dipped 4% year over year in the same quarter. Going ahead, management anticipates North America wholesale decreases to moderate in the rest of fiscal 2025.