RLNEUTRAL

Return on Equity (ROE)

34.7%

Higher than 86% of Consumer Cyclical sector peers

Updated 296h ago

Sector Performance

86th percentile

34.7%

Sector Median

8.5%

Sector Avg

-18.9%

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Deep Analysis

Return on Equity (ROE) measures how effectively a company generates profit from every dollar of shareholders’ equity.

Ralph Lauren’s current ROE of 34.7% means the company earned about $0.35 for each dollar of equity. This is far above the Consumer Cyclical sector median of 8.6%, placing the stock in the 85th percentile among peers. Over the last eight quarters the trend is increasing, with the most recent quarter-over-quarter change showing a +4.8% rise (year-over-year change is not available). A very high ROE that is still rising suggests strong operational efficiency and compounding power, which can reduce risk for investors expecting sustained returns. However, the overall neutral stock verdict indicates that other factors—such as valuation or growth concerns—offset this clear strength, meaning the metric does not contradict the neutral stance but also does not single-handedly argue for a bullish rating.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about RL?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does RL's Return on Equity (ROE) compare to its sector?

RL's Return on Equity (ROE) of 34.7% compares to a Consumer Cyclical sector median of 8.5%, placing it in the 86th percentile.

Who are RL's closest peers by Return on Equity (ROE)?

The closest Consumer Cyclical peers by Return on Equity (ROE) include: APTV (1.8%), DKNG (0.6%), LI (-2.5%), HMC (-3.8%), CROX (-6.1%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.