RL Nantucket Key Takes; Smooth Sailing Across the Board, Remains Top Pick

Research evidence excerpt

RL Nantucket Key Takes; Smooth Sailing Across the Board, Remains Top Pick

f the center, with US

outlet customers >$100K income, and co. has been able to trade consumers up in terms of product

(e.g., more sweaters and jackets, fewer t-shirts and lower-price-point items), with more personalized

and targeted marketing efforts also focused on the channel. While outlet consumers are the most .

Source: Jefferies

exposed to an increasingly volatile macro environment, co's elevation journey positions them well

to be more resilient vs. historical periods.

Womens Remains Largest Growth Oppty: Rev is now ~30% of mix, up meaningfully in recent years,

but still much lower than >50% of customer base and industry mix. One key reason co. believes it

has underindexed is that campaigns were traditionally more family or male specific. There remains

a gap between awareness (which is high) and purchasing for herself (which is lower), with many

potential customers still not aware the brand sells to women. Handbags are a small % of rev but

very important for elevation and customer recruitment as a point of entry.

China Elevated Assortment Driving Outsized Growth: Outsized growth in China has been

supported by an elevated assortment, which serves as a good leading indicator for what works

globally, with consumers in the region gravitating toward elevated, highly crafted materials. Mgmt.

remains focused on key city clusters and sees substantial white space still ahead, targeting at least

+LDD% growth in China sustainably. We are encouraged by China growth as the market represents

one of the most elevated markets for the brand, a strong proof point for the overall elevation strategy

globally.

Marketing Always-On Approach Driving Sustainable ROI: Mgmt. guide for marketing spend to