Polo Ralph Lauren Corp (RL)

The Man Ralph Himself is selling his stock. You want to buy?

http://finviz.com/quote.ashx?t=RL

The recession isn't over, which the P/E is apparently suggesting.

Because i like the clothing and because its very fashionable!

Even though the economy is bad I am going to buy Ralph Lauren and I am sure others will too.

I was all set to underperform this high end clothing retailer, but the closer I looked the better RL did. They have enough cash to cover their debt. They have opened new stores and plan to continue. So far sales are only slightly down in the USA and up everywhere else. They are moving into China and I expect they will be succesful there, as there model works. The price is a little high here, but it should outperform the S&P. Magicdiligence has an excellent pitch on this one. One additional risk is Mr Lauren's age (67) and the possibility of poor health. Here's wishing him many more good years. Outperform

Out of fashion not steady growth at most

Got way ahead of itself. The consumer isnt coming back yet RL.

Great earnings last quarter and they have international exposure, which gave them excellent results in Asia.

GOOD BRANDS

Polo Ralph Lauren (RL) is a well known designer and marketer of branded apparel and accessories. Some of it's well known brands include Polo, Ralph Lauren Purple, Black, and Blue Label, Lauren, RLX, Chaps, and others. The strength of it's branding has allowed the company to enter into licensor relationships, which allows producers of perfumes, colognes, sunglasses, jewelry, and home products to slap the Polo name on their merchandise in order to charge higher prices and increase sales volumes. Polo Ralph Lauren has three main revenue channels. The Wholesale channel (57% of 2008 sales) consists of sales to third party retailers, mainly higher end department stores such as Macy's (M) and Dillard's (DDS). Retail (39%) consists of sales through Polo's company-owned specialty stores, consisting of about 80 Ralph Lauren shops, over 160 Polo factory stores, 70 Club Monaco stores, a handful of Rugby shops, and over 100 international locations. Licensing revenues fill out the sales portfolio.

Polo Ralph Lauren is one of the few apparel brands that has stood the test of time. Founder and still CEO Ralph Lauren founded the company in the late 1960's, took it public in the late 1990's, and has delivered excellent 15% annual gains in operating earnings since then. Financial health and metrics have been strong. The company holds over $880 million in cash and short-term investments, versus total debt obligations of about $420 million. MFI return on capital has been steady and relatively strong at about 42% average since 2004 (nominal ROIC is equally good at about 15%). Free cash flow margin has steadily improved into the low teen's. Polo is financially strong and efficiently run, covering the first investment pillar: financial viability.

What about another pillar, growth potential? The company has shown in the past that it knows how to grow, and there are still ample opportunities to expand. Perhaps the greatest potential is overseas, particularly in Europe and Asia, which Polo aims to derive 2/3rds of revenues from. Expanding the brand portfolio in several directions has been another strength. Polo has traditionally been considered a luxury brand for adults, but has also successfully developed mid-scale (American Living) and young adult (Rugby) brands that allow wider channel diversity and a larger customer base. This diversity allows Polo to capitalize on many markets at once, and also provides some protection from a fashion misstep in a particular brand. Growth potential still looks good, although perhaps not explosive.

The final pillar is also something I believe Polo Ralph Lauren can boast: durable competitive advantages, or moat. It's very difficult to have a moat in fashion... tastes are fickle and today's fad is tomorrow's Goodwill item. However, Polo has maintained the strength of it's brands for over 20 years, and has proven that it knows how to build and maintain them. The company's long and steady history of profitable growth is a testament to the competitive advantages here. With such a wide and established set of brands, Polo can withstand a misstep or two, unlike many fashion companies that rely on single brands with ultimately short-term appeal. Their grip on retail store shelf space also protects sales. While consumer goods companies rarely have unassailable competitive positions, Polo's advantages here are about as much as you can ask for.

With the 3 pillars of investment covered, it would seem that Polo makes a good MFI pick, and indeed it just misses the cut for a MagicDiligence Top Buy recommendation. There are a few things that prevent me from recommending it. First is customer concentration and secular trends in retail merchandising. Macy's and Dillard's account for over 20% of sales. Weakness at either of these chains (particularly Macy's) would materially affect Polo's top line and profitability. Also, the department store channel is a dying one. In total apparel sales, department stores hold only about 16% of total market share, down from 20% in 2003 and quickly declining against discount mass merchants like Wal-Mart (WMT ) and specialty stores like Gap (GPS). A continuation of this trend would hurt Polo, as increasing their company owned retail stores or pushing product into specialty retailers would be an expensive task.

The other concern is simply competition. MagicDiligence hates competition, as it is constantly a drain on revenues and profitability margins. Apparel is, simply put, cutthroat with thousands of competitors. Polo Ralph Lauren competes with a platitude of strong firms, including Jones Apparel (JNY), Liz Claiborne (LIZ), VF Corp (VF), and others too numerous to list here. While Polo's position appears to be strong, there are plenty of examples of seemingly strong apparel firms making a few missteps, crashing and burning in the process (remember Tommy Hilfiger?).

Polo Ralph Lauren is one of the most successful apparel branding companies out there, and at current stock prices makes a fine pick for your MFI portfolio. It just misses making the Top Buy recommendation list.

good brands

Nobody will pant to look like a polo snob in the coming depression.

Should've done this months ago, but time to downgrade a slew of consumer discretionary/retail companies. We are going to see a change in the standard of living in this country over the next decade, and these companies are flat out not going to see the performance of the past.

Increasing receivables and inventory (exceeding cash position), and em....oh yeah, recession.

Historical earnings with a nice upward trend. Very little debt. No R&D costs. A brand name that is known and respected around the world.

This company should have no trouble surviving the current economic conditions and continuing to prosper.

Missed it by one day

Makes clothing that never goes out of style. Is sold everywhere from TJ Max to Fifth Avenue. I wear their stuff. Way off it's 52wk highs.

POLO Ralph Corp long term indicators turn positive and Wednesday RL given a up side brack out with good volume and momentum turn positive,Its ready to go next level
http://my.flyingstock.com/RSSDetail.aspx?id=400

Great brand built to withstand economic contraction