Ralph Lauren's (NYSE: RL) 10 percent slide in fiscal first quarter profits didn't phase a couple of analysts who continue to rate the stock a Buy.
Macquarie's Elizabeth Dunn called results "impressive" in light of weak consumer spending in North America.
"We especially pleased to see double-digit growth in Europe and Asia," Dunn said in a note. Heavy spending on infrastructure should soon subside and the company is rolling out a new string of outlets called Polo Stores.
"Some don't agree with the strategy but we like it," Dunn said of the new stores. She called the Polo brand popular and well priced.
"And it's always better to control your brand than be at the whim of wholesale accounts."
Dunn maintained an Outperform rating and $180 target.
Deutsche Bank's Greg Poole said management's weaker-than-expected outlook for the fiscal second quarter, as well as sluggish wholesale trends, are outweighed by strong revenue and gross margins.
"We like the stock set-up from here," Poole said, maintaining a Buy rating and $180 target. He figures spending will decline following the fiscal second quarter resulting in accelerating earnings growth.
Longer term, the company can shift into higher-margin retail sales from wholesale, and move greater emphasis on women's accessories from apparel.
Ralph Lauren traded recently at $159.21, up 1.49 percent.
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