Luxury apparel giant Ralph Lauren Corporation (NYSE:RL)’s shares are up by 33.8% over the past year and by 7.3% year-to-date. As evidenced by its share price, the firm has performed well over the past year. On the 6th, the day Cramer discussed Ralph Lauren Corporation (NYSE:RL) in the morning, the firm also reported its fiscal first quarter earnings. For Q1 2027, the firm’s quarterly revenue of $1.96 billion and adjusted earnings of $4.59 beat analyst estimates of $1.87 billion and $4.32. Cramer, who has praised Ralph Lauren Corporation (NYSE:RL)’s CEO several times over the past month, repeated his sentiments:
“Well okay, so Ralph Lauren, let’s see Ralph Lauren, because when we [inaudible] Patrice Louvet, he absolutely, he had a great quarter, and he did not guide, he raised the guide for only as much as the quarter. And when I speak with Patrice, the one thing that’s certain, his game plan, is so long term, that even though he didn’t raise the guide more, people respect him and know that he is the winner in the category. He is by far the winner in the category. By the way, all markets up, even Europe up and Europe’s bad. China 40%, but China’s not a big part.”
For Ralph Lauren Corporation (NYSE:RL), the firm grew revenue by 14% in Q1, while the firm also bumped its full year fiscal 2027 revenue growth forecast to 5% to 6% from the earlier 4% to 5%. Ralph Lauren Corporation (NYSE:RL) also demonstrated strong operating momentum by exhibiting 37 consecutive quarters of higher average retail unit price. The firm’s gross margin also jumped by 140 to 180 basis points, and its direct-to-consumer same store sales jumped by 6% globally.
Yet at the same time, the fact that it operates primarily in the high-end market, Ralph Lauren Corporation (NYSE:RL) remains vulnerable to macroeconomic slowdowns even though its customer base might prove to be resilient. Additionally, should discounts in North American retail become common, the firm’s hard fought margin gains could come under risk. Ralph Lauren Corporation (NYSE:RL)’s forward P/E ratio of 22.27 is higher than that of firms such as V.F. Corp (13.55) and PVH Corp (7.22), which leaves little room for error.
Additionally, the hedge funds might have taken some profits as well. During Q4 2025 and Q1 2026, the number of hedge funds holding stakes in Ralph Lauren Corporation (NYSE:RL) was 71 and 64, respectively, according to Insider Monkey’s data. Short interest was 8.9% of the float, lower than PVH’s 14.6% and higher than V.F’s 8.4%. Yet, Two Sigma Advisors bumped its stake by 131% to $308 million.
While Insider Monkey acknowledges the risk and potential of RL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than RL that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
