The read-through on the better-than-expected quarter for Ralph Lauren (RL) should stop at Ralph Lauren -- and not be extended to everyone in the mall and every apparel maker on earth.
But that is how the the market is reading it. We have V.F. Corp (VFC) and PVH (PVH) moving, along with Macy's (M) and Nordstrom (JWN) , because it's impossible for most traders to believe that a gain in Ralph Lauren is just about Ralph Lauren. Despite the fact that we have John Idol, CEO of fashion retail house Michael Kors (KORS) saying that mall traffic is responsible for his forecast cut, and The Gap (GPS) reporting a weak number just a few days ago.
Now we are on the eve of reports from Macy's, Nordstrom and Dividend Stock Advisor holding Kohl's (KSS) , and I recognize that they all have come down so low that they seem to have minimal downside -- and even a couple of points of upside. But that's not what I am talking about, here.
I think that the new CEO of RL, Stefan Larsson, is doing a remarkable job of shortening the fashion cycle. Right now, Ralph Lauren takes too long versus say, a Zara, to get a good idea into a store. That's what Larsson is fixing. It's what he did at GAP outlet Old Navy -- and he's working his magic now at RL.
I would trust the negative KORS read through more than the positive RL, if I were making decisions on this retail group.
You want to trade the department stores off of RL? I don't blame you. With those dividends protecting them -- and they all have good coverage -- the trades could work.
But they are trades. On the notion of RL being indicative? I just can't go along with that judgment.