Please ensure Javascript is enabled for purposes of website accessibility

Why Ralph Lauren's Shares Are Up Sharply Today

By John Rosevear - Apr 6, 2020 at 12:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are new reasons to think that consumers are still spending online.

What happened

Shares of Ralph Lauren (RL 1.51%) were moving up on Monday morning, on growing investor optimism about the impact of the coronavirus pandemic -- and some new signs that affluent consumers have been shopping online while staying home.

As of noon EDT, Ralph Lauren's shares were up about 14.5% from Friday's closing price.

So what

Here's a new data point for retail-stock investors: Wayfair (W -0.95%), the online furniture and home-goods seller, said on Monday morning that its business has been booming since mid-March, when many consumers started sheltering at home to slow the spread of the COVID-19 virus. Clearly, at least some stuck-at-home consumers haven't stopped spending. 

A Ralph Lauren sign on the outside of the company's store in Paris.

While Ralph Lauren's brick-and-mortar stores are closed, its online stores have been up and running. Image source: Ralph Lauren.

Here's why that's relevant: While Ralph Lauren's brick-and-mortar stores (and the brick-and-mortar department stores that carry its lines) have been closed since mid-March, the company has solid online businesses that have been growing in recent quarters. 

How are those online businesses doing right now? Ralph Lauren hasn't yet said, but we do have another data point: The distribution centers for its online businesses (and some of its wholesale accounts) reopened on April 1 after extensive deep cleaning, meaning that the delays in shipping that might have deterred some customers in March are now being addressed.  

Add it up and it's not unreasonable to think that the company might be doing a bit better than retail investors had been expecting.

Now what

It'll be a little while before we know for sure how Ralph Lauren has been performing under the circumstances: The company isn't expected to report its fiscal third-quarter earnings until sometime in May. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Wayfair. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ralph Lauren Corporation Stock Quote
Ralph Lauren Corporation
$100.22 (1.51%) $1.49
Wayfair Inc. Stock Quote
Wayfair Inc.
$62.31 (-0.95%) $0.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.