Narrow-Moat Ralph Lauren Powers Through Tough Environment; Shares Undervalued

Ralph Lauren outperformed our expectations in its (September-ended) fiscal 2023 second quarter despite the strong U.S. dollar, virus restrictions in China, and inflation. We do not expect to make any material change to our $122 fair value estimate and view Ralph Lauren's shares as undervalued. We have noticed in recent quarters that apparel and accessories brands that cater to wealthier consumers are performing better than some peers, and Ralph Lauren appears to be benefiting from this trend.