StockStory Flags Growth and Margin Risks at Three Consumer Brands

StockStory warned that Ralph Lauren, Movado and Crocs face business challenges, citing weak sales trends, cash flow or profitability. It said consumer discretionary stocks had fallen 1.4% over six months, while the S&P 500 returned 16.6%.

On Ralph Lauren, StockStory said constant-currency revenue growth disappointed over the past two years. It also pointed to a 15% operating margin and 11.6% free-cash-flow margin over the last two years, which it said could limit the company's flexibility.

Movado's sales stagnated over five years, StockStory said, while its free-cash-flow margin was 6.5% over the last two years. The publisher also cited declining returns on capital as a sign that investments had not paid off.

For Crocs, StockStory said constant-currency revenue performance over the past two years was underwhelming and suggested its products at current prices were not resonating with customers. It also noted the company's operating margin was 13.5%, below the industry average.

The article listed Ralph Lauren at $358.67 a share and 18.1 times forward earnings. It put Movado at $33.28 and 10 times forward EV-to-EBITDA, and Crocs at $117.76 and 8.5 times forward earnings.