Q. Why have shares of Polo Ralph Lauren Corp. done well this year when many competitors haven't? -- P.J. via the Internet
A. The name on the company's famous brand of apparel and home decor still means something to shoppers.
Sold by Macy's, Dillard's and other retailers and through its own Ralph Lauren, Club Monaco and Rugby stores, its merchandise has a distinctive style that has withstood the test of time.
Whether that style is defined as traditional, timeless, preppy or sporty, it is being sold effectively at a number of price levels. Polo, Ralph Lauren Purple Label, Black Label, Lauren, RLX and Chaps are among its brand names. Meanwhile, it is reacquiring licenses for some of its brands to exert greater control.
Net income in its fiscal first quarter, ended June 28, rose 8 percent thanks to strong international sales, prompting the company to raise full-year sales estimates. It is in excellent financial shape.
Shares of Polo Ralph Lauren (RL) are up 18 percent this year following a 20 percent decline last year. Ralph Lauren, who founded the firm in 1967 and has been chairman and chief executive since its initial public offering in 1997, effectively controls 88 percent of all voting shares.
The company's 80 specialty stores around the world allow it to control prices effectively. Having ties to department stores has definite pluses but can be a negative when such stores are suffering through a difficult economy.
Its American Living line of apparel, accessories and home goods, launched at J.C. Penney Co. in February, was the biggest rollout in Penney history and is contributing to the Polo Ralph Lauren bottom line. Yet while Penney management estimates that the high-end line will generate more than $300 million in sales its first year, there has been significant price-cutting.
Consensus rating on Polo Ralph Lauren stock is between "buy" and "hold," according to Thomson Financial. That consists of one "strong buy," four "buys" and eight "holds."
The firm plans to launch a mobile commerce site within a year. Special codes will be placed in print ads, mailings and store windows. Shoppers can download special software to camera phones to scan the codes and be directed to a phone-friendly Web site.
Earnings are expected to increase 3 percent for its fiscal year ending in March and then 12 percent the following year. The expected five-year annualized earnings growth of 14 percent compares with 13 percent projected for the apparel-makers industry.
Q. Is Tweedy, Browne Global Value Fund worth investing in? -- C.G., via the Internet
A. The flexible all-capitalization fund doesn't invest much in technology, energy or emerging markets, mostly because such stocks cost too much for its value-oriented philosophy.
Financials, industrials, service industries and other traditional value types of industries are more its inclination. Despite the recent financial debacle, the fund represents a low-risk way to invest internationally for the long haul.
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