"As you know in fashion, one day you're in. And the next day, you're out." That's one of Heidi Klum's catchphrases on "Project Runway." You can say the same about stocks. And for now, Ralph Lauren is decidedly in.
Shares of Ralph Lauren (RL) galloped (see what I did there) to a more than 7% gain on Wednesday after the company reported earnings that topped forecasts and issued a solid sales outlook. Ralph Lauren was the top performer in the S&P 500.
The company, famous for its iconic polo player on a horse logo, has been on a tear as of late. Shares are up nearly 20% already this year and traders on StockTwits were pretty excited.
Several pointed out that the strong results and guidance from Ralph Lauren proved that luxury retail is still alive and well -- despite some weaker performances from the likes of Coach (COH) and Tiffany (TIF).
Exactly. Cosmetics company Estee Lauder (EL) popped on Tuesday after it reported healthy earnings. Investors often do make the mistake of lumping companies into some amorphous blob of a category and assuming the worst (or best) about that whole group based on just one company's results. It was silly to say luxury is dead because Coach had a tough quarter.
Retail is a business that's notorious for having companies run hot and cold. It shouldn't be a shock that some companies like Ralph Lauren and Estee Lauder are doing well even as others struggle. Consumers are finicky.
We'll find out soon enough. Michael Kors (KORS) reports earnings on February 12. The stock has been on fire since its IPO in December 2011. I have to admit though that I miss Kors' sardonic wit on "Project Runway" this season. Zac Posen needs to be a little meaner.
Good point. Some analysts have felt Ralph Lauren hasn't done as good a job at targeting Chinese tourists as others. But that might be changing. The company specifically cited "improved trends in Europe" in its earnings release.
Finally, one trader noted that Ralph Lauren and Jamie Dimon have something in common.
Ha! Doesn't Bank of America (BAC) also have a "fortress balance sheet" like JPMorgan Chase (JPM)? Here's hoping that Ralph Lauren and other fashion retailers never need a bailout like the big banks did.
Although a TARP designed by Ralph Lauren probably would look good on a model sashaying on a catwalk in New York, Milan or Paris.