The fashion world is buzzing with opportunities as consumers embrace higher disposable incomes, social media-driven trends, and the seamless convenience of online shopping. This blend of factors reshapes the global apparel market, making it an exciting space for brands and investors.
In this evolving landscape, investing in fundamentally sound luxury and fashion stocks, Ralph Lauren Corporation (RL), J.Jill, Inc. (JILL), and Nordstrom, Inc. (JWN), could be rewarding.
Gen Z and Millennials are redefining luxury fashion with their love for exclusive collections and digital engagement. Brands are embracing e-commerce and omnichannel strategies, making luxury more accessible and driving sales growth. The global apparel market, worth $1.42 trillion in 2025, is set to hit $1.78 trillion by 2030, exhibiting a CAGR of 4.6%.
Meanwhile, the luxury fashion market, bolstered by high-demand categories like cosmetics, jewelry, and apparel, is projected to reach $410.60 billion by 2032, growing at a CAGR of 5.8%.
Considering these conducive trends, let’s analyze the fundamental aspects of the three Fashion & Luxury industry stocks, beginning with the third choice.
Stock #3: Ralph Lauren Corporation (RL)
RL is engaged in the design, marketing, and distribution of luxury lifestyle products internationally, including apparel, footwear & accessories, home, fragrances, eyewear, fine jewelry, and hospitality. The company operates through three segments: North America; Europe; and Asia. It caters to consumers worldwide through retail stores, digital platforms, and luxury dining experiences.
On December 13, 2024, demonstrating its commitment to returning value to shareholders, the company declared a quarterly dividend of $0.83 per share, payable on January 10, 2025, to shareholders of record at the close of business on December 27, 2024.
RL pays an annual dividend of $3.30, which translates to a dividend yield of 1.39% at the prevailing price levels. Its four-year average dividend yield is 1.87%. Moreover, its dividend payouts have increased at a CAGR of 16.1% over the past three years.
In terms of the trailing-12-month gross profit margin, RL’s 67.51% is 78.9% higher than the 37.73% industry average. Similarly, its 11.78% trailing-12-month levered FCF margin is 161.3% higher than the industry average of 4.51%. Also, its trailing-12-month ROCE of 28.42% compares to the industry average of 11.02%.
For the fiscal second quarter, which ended on September 28, 2024, RL’s net revenues increased by 5.7% year-over-year to $1.73 billion. Its operating income grew 8.8% from the year-ago value to $178.90 million. In addition, the company’s adjusted net income stood at $162.10 million and $2.54 per share, up 15% and 20.9% year-over-year, respectively.
Street expects RL’s revenue for the fiscal third quarter (ended December 31, 2024) to increase 4% year-over-year to $2.01 billion. Its EPS for the same period is expected to grow 8.1% year-over-year to $4.51. In addition, it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is promising.
Over the past year, the stock has gained 64.5%, closing the last trading session at $236.50.
RL’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
RL has an A grade for Quality and a B for Sentiment. It is ranked #14 out of 72 stocks in the B-rated Fashion & Luxury industry.
Beyond what we have stated above, we also have given RL grades for Growth, Value, Momentum, and Stability. Get all the RL’s ratings here.
Stock #2: Nordstrom, Inc. (JWN)
JWN is a fashion retailer offering diverse apparel, shoes, beauty products, accessories, and home goods for all age groups. The company operates through multiple channels, including Nordstrom and Nordstrom Rack stores, online platforms like Nordstrom.com and ASOS, mobile apps, and clearance outlets under the Last Chance brand.
On December 23, 2024, JWN announced a definitive agreement with the Nordstrom Family and El Puerto de Liverpool to acquire all outstanding shares not already owned by them in a deal valued at approximately $6.25 billion. Additionally, a special dividend of up to $0.25 per share will be authorized, contingent on the completion of the transaction.
On December 18, buoyed by strong financial performance, the company paid its shareholders a quarterly dividend of $0.19 per share. JWN pays an annual dividend of $0.76, which translates to a dividend yield of 3.17% at the current share price. Its four-year average dividend yield is 2.54%.
JWN’s trailing-12-month ROCE of 30.54% is 177.2% higher than the industry average of 11.02%. Likewise, its trailing-12-month asset turnover ratio of 1.65x is 66.1% above the industry average of 0.99x.
During the third quarter that ended on November 2, 2024, JWN’s total revenues increased 4.3% year-over-year to $3.46 billion. The company’s adjusted EBITDA came in at $231 million, reflecting an increase of 12.7% from the prior year quarter, with an adjusted EBIT margin of 2.9% (up 50 bps year-over-year). Its adjusted EPS amounted to $0.33, reflecting an increase of 32% year-over-year. Also, JWN’s free cash flow came in at $78 million versus a loss of $231 million last year.
Analysts expect JWN’s revenue and EPS for the current year (ending January 2025) to be $15.03 billion and $1.97, respectively. For the fiscal year 2026, its revenue and EPS are expected to grow 1.6% and 4.2% from the prior year to $15.26 billion and $2.05, respectively.
Shares of JWN have gained 29.4% over the past year and 10.3% over the past six months to close the last trading session at $24.15.
JWN’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
JWN has an A grade for Value and a B for Momentum and Quality. Within the same B-rated industry, it is ranked #6. To access JWN’s Growth, Stability, and Sentiment ratings, click here.
Stock #1: J.Jill, Inc. (JILL)
JILL is an omnichannel retailer of women’s apparel under the J.Jill brand. It offers casual wear, athletic wear, loungewear, footwear, and accessories, including scarves and jewelry. The company markets its products through retail stores, websites, and catalogs.
On January 9, 2025, JILL paid its shareholders a quarterly dividend of $0.07 per share. It pays an annual dividend of $0.28, which translates to a dividend yield of 1.02% at the prevailing price levels.
In terms of the trailing-12-month JILL’s gross profit and net income margins of 70.44% and 6.83% are 86.7% and 60.5% higher than their respective industry averages of 37.73% and 4.26%. Likewise, its 62.26% trailing-12-month ROCE compares favorably to the industry average of 11.02%.
JILL’s net sales increased marginally year-over-year to $ 151.26 million in the fiscal third quarter that ended on November 2, 2024. Its adjusted income from operations came in at $ 21.37 million. In addition, the company’s adjusted net income amounted to $ 13.84 million or $ 0.89 per share, reflecting an increase of 15.1% and 7.2% year-over-year, respectively.
Analysts expect JILL’s revenue for the fiscal year (ending January 31, 2025) to increase marginally from the prior year period to $610.34 million. Its EPS estimate of $3.35 for the current year is expected to register a growth of 6.9% year-over-year.
The stock has gained 10.2% over the past three months to close the last trading session at $26.68.
It’s no surprise that JILL has an overall rating of B, equating to a Buy in our POWR Ratings system. It has an A grade for Quality and a B for Value and Sentiment. Out of 72 stocks in the Fashion & Luxury industry, it is ranked #5.
Beyond what is stated above, we’ve also rated JILL for Growth, Momentum, and Stability. Get all JILL ratings here.
What To Do Next?
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RL shares . Year-to-date, RL has gained 2.39%, versus a -0.80% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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