Ralph Lauren (RL) Stock Forecast & Price Target

Ralph Lauren Corp. has experienced a significant shift in its business model, with digital sales now constituting approximately 26% of overall company revenue, a considerable increase from the low-teens penetration observed in 2018. The company has also demonstrated strong growth in Average Unit Retail (AUR), which has risen by 26% since fiscal year 2022, indicating effective pricing strategies and demand for its products. Furthermore, Ralph Lauren's operating margin in its digital segment has outperformed its other regions, particularly with a rise of nearly 500 basis points over the past three years, showcasing operational efficiency and profitability in this growing channel.

Ralph Lauren Corp. is forecasted to experience subdued growth in North America, with planned increases projected at low-single digits, primarily due to macroeconomic pressures and cautious consumer sentiment moving into the latter half of FY26. The company faces multiple risks, including commodity cost volatility, shifting consumer spending patterns, rising interest rates, and deteriorating consumer confidence and unemployment rates, all of which could adversely impact financial performance. Additionally, the reduction of promotional activities since 2022 may limit customer engagement and further hinder sales growth in a challenging retail environment.