What Happened?
Shares of fashion brand Ralph Lauren (NYSE: RL) fell 17.9% in the morning session after President Trump announced "reciprocal tariffs" on all US imports, set at a rate of 10%.
From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Ralph Lauren? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Ralph Lauren’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Ralph Lauren and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 15.9% on the news that the company reported strong fourth-quarter 2024 results, which blew past analysts' constant currency revenue expectations, reflecting better-than-expected holiday performance across all geographies. Looking ahead, its revenue guidance for 2025 of 6-7% growth was quite healthy. Overall, we think this was a decent quarter with some key metrics above expectations.
Ralph Lauren is down 14% since the beginning of the year, and at $199.17 per share, it is trading 30.5% below its 52-week high of $286.74 from February 2025. Investors who bought $1,000 worth of Ralph Lauren’s shares 5 years ago would now be looking at an investment worth $3,265.
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