A leading competitor to Polo Ralph Lauren has emerged as a top-performing stock in the fashion sector, drawing significant investment from prominent mutual and hedge funds. The company's recent share price surge and strong earnings growth have fueled interest among institutional investors.
- Stock rose 28% over 12 weeks, outperforming S&P 500 fashion index by 14 percentage points
- Q3 net income reached $187 million, up 22% year-over-year
- Revenue increased 17% to $1.4 billion, beating estimates by 9%
- Gross margin improved by 12% due to supply chain and product mix enhancements
- 17 of the top 25 U.S. equity funds increased holdings in the quarter
- International sales now represent 41% of total revenue, with London flagship generating $4.3M in first month
The stock of a major apparel brand competing with Polo Ralph Lauren has risen 28% over the past 12 weeks, outpacing the broader S&P 500 fashion index by 14 percentage points. This surge follows a Q3 earnings report that revealed a 22% year-over-year increase in net income, reaching $187 million, while revenue climbed 17% to $1.4 billion, surpassing analyst expectations by 9%. The company also reported a 12% improvement in gross margin, driven by supply chain efficiencies and higher-margin product offerings in its premium segment. Institutional ownership has intensified, with 17 of the top 25 U.S. equity funds increasing their stakes in the company during the third quarter. The largest fund manager in the group raised its position by 3.2 million shares, bringing its total ownership to 6.8% of the company’s outstanding shares. This shift indicates growing confidence in the brand’s long-term strategy, particularly its digital transformation and international expansion, which now accounts for 41% of total revenue. The stock's momentum has prompted analyst upgrades, with three major firms revising their price targets upward by an average of 18%, citing resilient consumer demand and disciplined inventory management. The company’s new flagship store in London, launched in November, has generated over $4.3 million in sales during its first month of operation, signaling strong international appeal. Market analysts note that the company’s improved performance is narrowing the gap with Ralph Lauren, which has seen flat revenue growth over the past two quarters. This shift in momentum may signal a broader realignment in investor sentiment toward brands with stronger e-commerce integration and faster inventory turnover.