The business is still doing fine as number of doors and retail stores have been increasing on yearly basis. In the end, all it boils down to is revenues, as from 2009 till 2016, company’s revenues are 48% higher whereas the stock is around 50% higher than mid-2009. I believe the enterprise is cheaper than other luxury alternatives and fairly-priced overall. Is this the Coca Cola moment for Ralph Lauren? Hard to say when equity levels are so elevated but if the analyst thinks the brand will survive, Ralph Lauren can be a good purchase at a fair price. Fairly valued, Ralph Lauren offers a fair value play in the luxury space.
A good company that makes easy (toddler) products while trading at an attractive price. Stable cashflows from the last five years do give me a strong conviction of good future free cash generation. Comparing the current market valuation of $ 76m, buying the entire enterprise at current valuation will enable you to get the ask back in ~ 11 years when measured purely on free cashflow. The judgement is again on the sustainability of free cashflows which in my view are reasonably sustainable. The debt is low (credit limit) to non-existent which justifies my conviction that management is prudent and strong free cashflow generation is their priority. Digging further, with $11 m in net cash, essentially the equity is valued at $ 65m which in my view is cheap for such an enterprise. A stable, capex light little researched and overlooked company, Crown Crafts Inc is a good company to add in the portfolio for the long run.