American Luxury Brands Surpass European Counterparts in Share Performance

Luxury goods brands Tapestry and Ralph Lauren have outperformed European counterparts over the past five years, with shares gaining 55% and 29% respectively this year. Despite being considered "poor cousins" to European luxury names, Tapestry and Ralph Lauren no longer trade at steep discounts. Their shares now have a multiple of forward earnings similar to European luxury houses.

Luxury goods brands Tapestry and Ralph Lauren have shown remarkable resilience and growth, outperforming their European counterparts over the past five years. According to MarketBeat [1], Tapestry (NYSE: TPR) and Ralph Lauren Corporation (NYSE: RL) have seen their shares gain 55% and 29% respectively this year alone. This impressive performance has led to a significant shift in their valuation metrics, with both brands now trading at multiples of forward earnings similar to European luxury houses.

Tapestry, a leading designer and retailer of women's apparel and accessories, has been particularly notable. With a valuation score of 2/6, indicating that it is significantly below fair value, Tapestry is currently trading at a Price-To-Earnings (PE) ratio of 116.6x, which is significantly higher than the industry average of 20.4x [2]. Despite this high valuation, Tapestry's strong financial performance and growth prospects have attracted institutional investors. Quantitative Investment Management LLC, for instance, recently purchased a new position in Tapestry's shares [1].

Ralph Lauren Corporation, a globally recognized brand in the fashion and lifestyle industry, has also shown strong performance. The company reported a 3.77 earnings per share (EPS) for the last quarter, exceeding analysts' expectations and showing a year-over-year revenue increase of 13.7% [1]. Ralph Lauren's board has authorized a $1.50 billion share buyback program, indicating confidence in the stock's underappreciated value [1]. This strategic move has been well-received by analysts, with several firms upgrading their ratings and target prices for the stock [1].

The shift in valuation metrics for Tapestry and Ralph Lauren is a significant development, as they were previously considered "poor cousins" to European luxury names. Their ability to trade at similar multiples to European luxury houses reflects their strong brand equity, robust financial performance, and promising growth prospects. As these brands continue to perform well, they are likely to attract further institutional investment and maintain their upward trajectory.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-quantitative-investment-management-llc-buys-new-shares-in-ralph-lauren-corporation-rl-2025-08-26/
[2] https://simplywall.st/stocks/us/consumer-durables/nyse-tpr/tapestry/valuation