Ralph Lauren (RL) Becomes Australian Open's Official Outfitter
Ralph Lauren Corporation RL added another feather to its cap after being named the official outfitter of Australian Open 2021, to be held from Jan 18-31. This long-term partnership will allow the company to outfit all on-court officials, including the ball kids and chair umpires. The tennis event is anticipated to be viewed by 900 million households across 215 territories in Australia.
This marks Ralph Lauren’s third Grand Slam event following Wimbledon and the U.S. Open. Prior to this, it has been associated with many other renowned sports events, including U.S. Olympic and Paralympic teams, the PGA of America and the PGA Championship, the U.S. Ryder Cup Team, the U.S. Open Golf Championship and the American Junior Golf Association.
The company will specially design a collection of apparel and accessories, which are likely to showcase the spirit of the tournament — energetic and playful. Apart from these, the uniforms including Polo shirts, shorts, skorts and caps, will feature sustainable fabric made of yarns from recycled plastic bottles. Also, the outfits will be stretchable and offer moisture-wicking properties and UV protection for the convenience of players, particularly for the summer season.
Additionally, Ralph Lauren will come up with a Create Your Own program for the first time, wherein a store will be set up at the venue, from which customers can personalize polo shirts, pullovers and totes with their names or initials. Further, customers can avail an assortment of classic Polo icons.
What Else You Should Know?
Ralph Lauren is making efforts to enhance its omnichannel capabilities via technological investments to support functions like shopping, augmented reality, personalization and social commerce. In this context, it is floating cloud-based human resources and planning system worldwide. It also plans to augment its capabilities to better serve the consumers through the Digitizing the Value Chain project. These initiatives are expected to simplify operations, improve team connect, alongside digitalizing product journey.
Moreover, the company is on track to exceed its top and bottom-line targets under its Next Great Chapter plan, which includes creating a simplified global organizational structure and rolling out improved technological capabilities. It unveiled plans to curtail its global workforce by the end of fiscal 2021 under its Fiscal 2021 Strategic Realignment Plan. By reducing workforce, it expects to see gross annualized pre-tax expense savings between $180 million and $200 million. These savings are anticipated to be realized mainly from the start of fiscal 2022.
As part of the plan, the company will return 100% free cash flow to shareholders in the next five years, amounting to about $2.5 billion on a cumulative basis through fiscal 2023, in the form of dividends and share repurchases. The company is on track with the transition of the Chaps brand, which is in sync with the long-term brand elevation strategy. In this context, it has entered a multi-year licensing deal with an affiliate of 5 Star Apparel LLC, a division of the OVED Group, to be effective from Aug 1, 2021. Per the deal, 5 Star Apparel will manufacture, market and distribute men and women’s products of the Chaps brand. Also, this deal will help Ralph Lauren focus better on its core brands and reduce dependence on North American stores.
Wrapping Up
Although management expects COVID-19 impacts and uncertainties to continue in the third quarter and fiscal 2021, the company’s well-chalked plans are likely to provide some cushion to this Zacks Rank #3 (Hold) stock. We note that shares of this company have lost 32.3% year to date compared with the industry’s decline of 6.2%.
3 More Apparel Stocks to Watch
Kontoor Brands, Inc. KTB has a long-term earnings growth rate of 4%. The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs CROX, another Zacks Rank #1 stock, has outperformed the Zacks Consensus Estimate by 191.7%, on average, in the trailing four quarters.
Gildan Activewear, Inc. GIL has a long-term earnings growth rate of 5.4% and a Zacks Rank #1, at present.
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