2 Buy-Rated Apparel Stocks to Dress Up Your Portfolio

NYSE: RL | Ralph Lauren Corporation  News, Ratings, and Charts

RL – A significant increase in discretionary spending and the resumption of outdoor activities are helping the apparel industry rebound this year. With in-store shopping regaining its appeal, and increasing spending on e-commerce platforms, we believe leading apparel stocks Ralph Lauren (RL) and Guess’ (GES) could be solid additions to one’s portfolio now. So, let’s discuss.

The apparel industry has been rebounding this year. As people resume outdoor activities and discretionary spending rises, both e-commerce and the brick-and-mortar outlets of apparel companies are seeing sales growth.

The global clothing and clothing accessories stores market is expected to hit $1.2 trillion in 2021, registering a 7.8% CAGR. With more than 5.48 billion COVID-19 vaccine doses administered across 182 countries so far, consumers are expected to be increasingly inclined to shop at brick-and-mortar retail stores. In addition, shifting preferences regarding branded and customized products, and the continuous launch of new fashions supported by aggressive branding, should continue to fuel the industry’s growth.

Given a strong digital presence and established brick-and-mortar chains, we think apparel companies Ralph Lauren Corporation (RL) and Guess’, Inc. (GES) should benefit from industry tailwinds. Shares of these two companies are rated B (Buy) in our proprietary POWR Ratings system.

Ralph Lauren Corporation (RL)

RL is a global leader in designing, marketing, and distributing premium lifestyle products in five categories: apparel, accessories, home, fragrances, and hospitality. The New York City company offers its products under the brand names Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps.

Last month, RL collaborated with ZEPETO on a global social networking and avatar simulation app, where users can experience a fully articulated virtual world with a personalized 3D avatar and socialize with others. With this partnership, consumers can purchase RL products, wear them digitally, and experience the brand differently.

RL’s net revenues increased 182.3% year-over-year to $1.38 billion in its  first fiscal quarter, ended June 26, 2021. The company’s gross profit increased 177.6% from its year-ago value to $968.1 million. Also, its operating income came in at $220.6 million, versus a $168 million operating loss in the prior-year quarter.

Analysts expect RL’s revenue to increase 31.1% year-over-year to $5.77 billion in fiscal 2022. The company surpassed the consensus EPS estimates in three of the trailing four quarters. In addition, RL’s EPS is expected to grow 316.5% in the current year. The stock has gained 12.8% in price over the past nine months and 54.8% over the past year.

RL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

RL has also rated a B grade for Growth, Momentum, and Quality. Within the A-rated Fashion & Luxury industry, it is ranked #29 of 64 stocks.

To see additional POWR Ratings for Stability, Sentiment, and Value for RL, click here.

Guess’, Inc. (GES)

GES is an American clothing and retail brand that  markets and distributes apparel, shoes, accessories, watches, and handbags for men, women, and kids. Americas Retail; Americas Wholesale; Europe; Asia; and Licensing are the five operational segments of the Los Angeles-based company. It directly operated in 1,046 retail stores in America, Europe, and Asia and an additional 524 retail stores worldwide.

In April, GES collaborated with FriendsWithYou, to launch a collection of colorful silhouettes and fabrications. With this introduction, the company believes that the consumers will get a sense of celebration with these new clothes and experience their own creative expression and a fresh new outlook from  artists worldwide.

For its second fiscal quarter, ended July 31, 2021, GES’ revenue increased 57.7% year-over-year to $628.62 million. The company’s total segment earnings from operations increased 353.6% from its  year-ago value to $117.58 million. In addition, GES’ gross profit increased 100% from the prior-year quarter to $294.09 million.

GES’ revenue is expected to increase 35.6% year-over-year to $2.55 billion in its  fiscal year 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. GES’s EPS is expected to increase 3985.7% in the current year. The stock has soared 18.7% in price over the past nine months and 86.1% over the past year.

GES’ POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. GES also has an A grade for Value, and a B grade for Momentum and Growth. In the Fashion & Luxury industry, it is ranked #23 of 64 stocks.

In addition to the POWR Rating grades we’ve just highlighted, one can see GES’ ratings for, Stability, Quality and Sentiment here.


RL shares were unchanged in premarket trading Friday. Year-to-date, RL has gained 10.29%, versus a 21.32% rise in the benchmark S&P 500 index during the same period.


About the Author: Priyanka Mandal


Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
RLGet RatingGet RatingGet Rating
GESGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

2022 Stock Market Outlook

The stock market (SPY) has continued on a bullish path in 2021. Will that continue in 2022? And what could happen to awaken the bear market from hibernation? 40 year investment veteran Steve Reitmeister explores this and more in this early edition of his 2022 Stock Market Outlook. Read on for full details below...

:  |  News, Ratings, and Charts

How Recent Bearish Sentiment Will Impact the Stock Market

Last week, the S&P 500 (SPY) fell during a short trading week. Multiple factors were weighing on investor sentiment. First was September's history for being a weaker month for stock performance. In addition, the previous week's August payrolls miss seemed to linger on investors' minds due to concerns that the delta variant of COVID was slowing the rebound in the economy. The real estate sector led declines as long-term interest rates increased. Consumer staples and utility stocks performed the best. In terms of market cap, the small-cap Russell 2000 Index underperformed the market after two strong weeks of outperforming the larger benchmarks. Growth stocks also outperformed Value stocks. I’ll discuss this and more below…

:  |  News, Ratings, and Charts

How to Turn Low Priced Stocks into BIG Winners?

Some investors are into growth stocks...some prefer value stocks while others are into momentum, income, chart patterns, insider trading and more. But one area that most investors agree upon is the great appeal in buying low priced stocks. Like those under $10 given the potential that prices soar and you easily beat the stock market (SPY). Read on to discover our brand new strategy for selecting low priced stocks that has led to a surprising +62.88% average annual return. Get the rest below...

:  |  News, Ratings, and Charts

3 Growth Stocks You Can Buy at a Reasonable Price

Even with growth stocks falling last week, investors are still pouring money into companies with strong growth potential. When you add in a value component, you get the best of both worlds. That's why investors should consider growth at a reasonable price stocks such as Westlake Chemical Corporation (WLK), ManpowerGroup (MAN), AutoNation, Inc. (AN).

:  |  News, Ratings, and Charts

How to Turn Low Priced Stocks into BIG Winners?

Some investors are into growth stocks...some prefer value stocks while others are into momentum, income, chart patterns, insider trading and more. But one area that most investors agree upon is the great appeal in buying low priced stocks. Like those under $10 given the potential that prices soar and you easily beat the stock market (SPY). Read on to discover our brand new strategy for selecting low priced stocks that has led to a surprising +62.88% average annual return. Get the rest below...

Read More Stories

More Ralph Lauren Corporation (RL) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All RL News