Ralph Lauren Reports Third Quarter Fiscal 2017 Results
-
Reported EPS of
$0.98 and Adjusted EPS of$1.86 - Maintains Its Fiscal 2017 Outlook
-
Announces CEO Departure;
Jane Nielsen to Lead Execution of the Way Forward Plan
The Company and
“This quarter, we continued to drive the execution of the Way Forward
plan -- refocusing and evolving our iconic product core, cutting our
lead times, and aligning supply with demand -- to put the foundation in
place to drive demand back to the business,” said
- re-focused and evolved our iconic core product offering for Fall 2017;
- continued to drive our quality of sales up by moderating discount levels across retail and wholesale;
- lowered our inventory levels by 23% to better match demand;
- reduced our SKUs for Spring 2017 by over 20%;
- significantly improved our ability to match supply to demand by reducing pre-market commitments to 15% of our inventory buys for Fall 2017 from 60% for Fall 2016;
- platformed all of our core fabrics, accounting for about 50% of our unit volume;
- remain on track to get halfway to our goal of a 9-month lead time by the end of this fiscal year and 90% there by the end of next fiscal year;
- optimized our sales fleet by closing another 12 underperforming stores;
- hired a new Creative Director for Lauren; and
- launched our Ralph Lauren Icons marketing campaign.”
“These critical steps are moving us in the right direction to intensify
our execution of the Way Forward plan that will strengthen the brand and
return us to long-term profitable growth.” said
“Our third quarter results demonstrate the continued actions we are
taking to further strengthen our business and move us forward. We are
making the right strategic decisions to support the future growth of the
Company,” said
Third Quarter Fiscal 2017 Income Statement Review
Net Revenues. For the third quarter of Fiscal 2017, net
revenues of
-
Wholesale Revenue. Wholesale segment revenue decreased 26% on a
reported basis to
$582 million in the third quarter and was down 25% on a constant currency basis. The decline was primarily driven byNorth America as shipments were strategically reduced to better align with underlying demand and to reduce excess inventory and increase quality of sales as part of the Way Forward plan. InEurope , a shift in timing of shipments of$18 million into the fourth quarter also pressured the comparison. -
Retail Revenue. Retail segment revenue decreased 2% on both a
reported and constant currency basis to
$1.1 billion in the third quarter, driven by a decline in comparable store sales. Consolidated comparable store sales decreased 5% on a reported basis and were down 4% on a constant currency basis due to challenging traffic and average transaction size trends driven by our initiatives to improve quality of sales, partially offset by a favorable timing shift that drove post-Christmas week sales into the third quarter. -
Licensing Revenue. Licensing segment revenue of
$44 million in the third quarter declined 4% on both a reported and a constant currency basis.
Gross Profit. Gross profit for the third quarter of Fiscal
2017 was
This increase was primarily driven by favorable geographic and channel mix shifts and initiatives to improve quality of sales metrics, principally through reduced promotional activity in our international businesses. This was partially offset by unfavorable foreign currency effects of 100 basis points.
Operating Expenses. Operating expenses in the third
quarter of Fiscal 2017 were
Operating expense rate was 45.4%, 230 basis points above last year,
excluding restructuring and other related charges from both periods.
This increase was due to deleverage of fixed expenses on lower net
revenues. Adjusted operating expenses were
Operating Income. Operating income in the third quarter of
Fiscal 2017 was
The operating margin performance was above expectations due to prudent expense management and better gross margin. The lower operating margin year-over-year was attributable to fixed expense deleverage on lower net revenues, which was partially offset by higher gross margin.
-
Wholesale Operating Income. Wholesale operating income in the
third quarter was
$122 million and wholesale operating margin was 20.9% on a reported basis, including$4 million in restructuring and other related charges. On an adjusted basis, wholesale operating income in the third quarter was$126 million and wholesale operating margin was 21.5%, down 200 basis points compared to last year. -
Retail Operating Income. Retail operating income in the third
quarter was
$166 million and retail operating margin was 15.3% on a reported basis, including$16 million in restructuring and other related charges. On an adjusted basis, retail operating income was$182 million and retail operating margin was 16.8%, up 290 basis points compared to last year. -
Licensing Operating Income. Licensing operating income of
$37 million in the third quarter decreased 11% compared to the prior year period on a reported basis.
Net Income and Diluted EPS. On a reported basis, net
income in the third quarter of Fiscal 2017 was
The Company had an effective tax rate of approximately 34% in the third quarter of Fiscal 2017 on a reported basis. On an adjusted basis, the effective tax rate was approximately 28%, excluding restructuring and other related charges, which compared to an adjusted effective tax rate of 25% in the prior year period.
Full Year Fiscal 2017 and Fourth Quarter Outlook
The full year Fiscal 2017 and fourth quarter guidance excludes restructuring and other related charges expected to be recorded in connection with the Company’s Way Forward plan, and severance-related payments associated with the CEO departure announcement today.
For Fiscal 2017, the Company is maintaining its guidance. Consolidated net revenue is expected to decrease at a low-double digit rate consistent with the Way Forward plan. Key elements include a proactive pullback in inventory receipts, store closures, pricing harmonization and quality of sales initiatives. Based on current exchange rates, foreign currency is expected to have minimal impact on revenue growth in Fiscal 2017.
The Company continues to expect operating margin for Fiscal 2017 to be approximately 10% as cost savings are expected to be offset by growth in new store expenses, unfavorable foreign currency impacts in gross margin, infrastructure investments and fixed expense deleverage. The Fiscal 2017 tax rate is estimated to be approximately 29%.
In the fourth quarter of Fiscal 2017, the Company expects consolidated net revenues to be down mid-teens on a reported basis, with continued execution of quality of sales initiatives, inventory receipt reductions, and fleet optimization consistent with the Way Forward plan. This compares 13 weeks this year to 14 weeks last year. Based on current exchange rates, foreign currency is expected to pressure revenue growth by about 100 basis points in the fourth quarter and will pressure gross margin by approximately 70 basis points.
As a reminder, the Company’s Fiscal 2016 included a 53rd week
which was part of the fourth fiscal quarter and impacts the
year-over-year comparisons in the fourth quarter of Fiscal 2017. The 53rd
week in Fiscal 2016 contributed approximately
Operating margin for the fourth quarter of Fiscal 2017 is expected to be 6.0%-6.5%. Foreign currency is estimated to pressure operating margin by about 100 basis points. The fourth quarter tax rate is estimated at 30%.
Fiscal Year 2017 Outlook – Non-GAAP Disclosure:
The Company is not able to provide a full reconciliation of the non-GAAP financial measures to GAAP because certain material items that impact these measures, such as the timing and exact amount of charges related to our Way Forward plan, have not yet occurred or are out of the Company’s control. Accordingly, a reconciliation of our non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort. The Company has identified the estimated impact of the items excluded from its Fiscal 2017 guidance.
This Fiscal 2017 non-GAAP guidance excludes estimated pretax charges
related to our Way Forward plan, comprised of restructuring-related
charges of about
Fiscal 2017 Way Forward Cost Savings Plan
The Company expects its Fiscal 2017 restructuring activities to result
in approximately
The Company expects to incur restructuring charges of about
Conference Call
As previously announced, the Company will host a conference call and
live online webcast today,
An online archive of the broadcast will be available by accessing the
Company's investor relations website at http://investor.ralphlauren.com.
A telephone replay of the call will be available from
ABOUT
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release and oral statements made from time to time by
representatives of the Company contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include the statements
under “Full Year Fiscal 2017 and Fourth Quarter Outlook,” and “Fiscal
2017 Way Forward Cost Savings Plan” and statements regarding, among
other things, our current expectations about the Company's future
results and financial condition, revenues, store openings and closings,
employee reductions, margins, expenses and earnings and are indicated by
words or phrases such as "anticipate," "estimate," "expect," "project,"
"we believe" and similar words or phrases. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements to
be materially different from the future results, performance or
achievements expressed in or implied by such forward-looking statements.
Forward-looking statements are based largely on the Company's
expectations and judgments and are subject to a number of risks and
uncertainties, many of which are unforeseeable and beyond our control.
The factors that could cause actual results to materially differ
include, among others: the loss of key personnel, including Mr. Ralph
Lauren, or other changes in our executive and senior management team or
to our operating structure, and our ability to effectively transfer
knowledge during periods of transition; our ability to successfully
implement our Way Forward plan and long-term growth strategy, which
entails evolving our operating model to enable sustainable, profitable
sales growth by significantly reducing supply chain lead times,
employing best-in class sourcing, and capitalizing on our repositioning
initiatives in certain brands, regions, and merchandise categories; our
ability to achieve anticipated operating enhancements and/or cost
reductions from our restructuring plans, which could include the
potential sale, discontinuance, or consolidation of certain of our
brands; the impact to our business resulting from potential costs and
obligations related to the early termination of our long-term,
non-cancellable leases; our efforts to improve the efficiency of our
distribution system and to continue to enhance, upgrade, and/or
transition our global information technology systems and our global
e-commerce platform; our ability to secure our facilities and systems
and those of our third-party service providers from, among other things,
cybersecurity breaches, acts of vandalism, computer viruses, or similar
Internet or email events; our exposure to currency exchange rate
fluctuations from both a transactional and translational perspective;
the impact to our business resulting from increases in the costs of raw
materials, transportation, and labor; our ability to continue to
maintain our brand image and reputation and protect our trademarks; the
impact to our business resulting from the
RALPH LAUREN CORPORATION | |||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||
Prepared in accordance with U.S. Generally Accepted Accounting Principles | |||||||||||||
(in millions) | |||||||||||||
(Unaudited) | |||||||||||||
December 31, | April 2, | December 26, | |||||||||||
2016 | 2016 | 2015 | |||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 928 | $ | 456 | $ | 527 | |||||||
Short-term investments | 453 | 629 | 688 | ||||||||||
Accounts receivable, net of allowances | 285 | 517 | 473 | ||||||||||
Inventories | 984 | 1,125 | 1,271 | ||||||||||
Income tax receivable | 63 | 58 | 70 | ||||||||||
Deferred tax assets | - | - | 154 | ||||||||||
Prepaid expenses and other current assets | 321 | 268 | 269 | ||||||||||
Total current assets | 3,034 | 3,053 | 3,452 | ||||||||||
Property and equipment, net | 1,514 | 1,583 | 1,564 | ||||||||||
Deferred tax assets | 91 | 119 | 38 | ||||||||||
Goodwill | 900 | 918 | 901 | ||||||||||
Intangible assets, net | 225 | 244 | 248 | ||||||||||
Other non-current assets (a) | 202 | 296 | 138 | ||||||||||
Total assets | $ | 5,966 | $ | 6,213 | $ | 6,341 | |||||||
LIABILITIES AND EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Short-term debt | $ | - | $ | 116 | $ | 15 | |||||||
Accounts payable | 158 | 151 | 195 | ||||||||||
Income tax payable | 38 | 33 | 55 | ||||||||||
Accrued expenses and other current liabilities | 955 | 898 | 949 | ||||||||||
Total current liabilities | 1,151 | 1,198 | 1,214 | ||||||||||
Long-term debt | 589 | 597 | 596 | ||||||||||
Non-current liability for unrecognized tax benefits | 77 | 81 | 80 | ||||||||||
Other non-current liabilities | 539 | 593 | 647 | ||||||||||
Total liabilities | 2,356 | 2,469 | 2,537 | ||||||||||
Equity: | |||||||||||||
Common stock | 1 | 1 | 1 | ||||||||||
Additional paid-in-capital | 2,299 | 2,258 | 2,236 | ||||||||||
Retained earnings | 5,997 | 6,015 | 6,015 | ||||||||||
Treasury stock, Class A, at cost | (4,464 | ) | (4,349 | ) | (4,248 | ) | |||||||
Accumulated other comprehensive loss | (223 | ) | (181 | ) | (200 | ) | |||||||
Total equity | 3,610 | 3,744 | 3,804 | ||||||||||
Total liabilities and equity | $ | 5,966 | $ | 6,213 | $ | 6,341 | |||||||
Net Cash (incl. LT Investments) | 874 | 559 | 612 | ||||||||||
Cash & Investments (ST & LT) | 1,463 | 1,272 | 1,223 | ||||||||||
Net Cash (excl. LT Investments) | 792 | 372 | 604 | ||||||||||
Cash & ST Investments | 1,381 | 1,085 | 1,215 | ||||||||||
(a) Includes non-current investments of: | $ | 82 | $ | 187 | $ | 8 | |||||||
RALPH LAUREN CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Prepared in accordance with U.S. Generally Accepted Accounting Principles | ||||||||
(in millions, except per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended |
||||||||
December 31, | December 26, | |||||||
2016 | 2015 | |||||||
Wholesale net sales | $ | 582 | $ | 786 | ||||
Retail net sales | 1,088 | 1,113 | ||||||
Net sales | 1,670 | 1,899 | ||||||
Licensing revenue | 44 | 47 | ||||||
Net revenues | 1,714 | 1,946 | ||||||
Cost of goods sold(a) | (731 | ) | (852 | ) | ||||
Gross profit | 983 | 1,094 | ||||||
Selling, general, and administrative expenses (a) | (772 | ) | (833 | ) | ||||
Amortization of intangible assets | (6 | ) | (5 | ) | ||||
Impairment of assets | (11 | ) | (9 | ) | ||||
Restructuring and other charges | (66 | ) | (58 | ) | ||||
Total other operating expenses, net | (855 | ) | (905 | ) | ||||
Operating income | 128 | 189 | ||||||
Foreign currency losses | (2 | ) | (3 | ) | ||||
Interest expense | (4 | ) | (6 | ) | ||||
Interest and other income, net | 3 | 2 | ||||||
Equity in losses of equity-method investees | (1 | ) | (1 | ) | ||||
Income before income taxes | 124 | 181 | ||||||
Provision for income taxes | (42 | ) | (50 | ) | ||||
Net income | $ | 82 | $ | 131 | ||||
Net income per share - Basic | $ | 0.98 | $ | 1.55 | ||||
Net income per share - Diluted | $ | 0.98 | $ | 1.54 | ||||
Weighted average shares outstanding - Basic | 82.6 | 84.9 | ||||||
Weighted average shares outstanding - Diluted | 83.3 | 85.5 | ||||||
Dividends declared per share | $ | 0.50 | $ | 0.50 | ||||
(a) Includes total depreciation expense of: | $ | (72 | ) | $ | (71 | ) | ||
RALPH LAUREN CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Prepared in accordance with U.S. Generally Accepted Accounting Principles | ||||||||
(in millions, except per share data) | ||||||||
(Unaudited) | ||||||||
Nine Months Ended |
||||||||
December 31, | December 26, | |||||||
2016 | 2015 | |||||||
Wholesale net sales | $ | 2,020 | $ | 2,355 | ||||
Retail net sales | 2,937 | 3,044 | ||||||
Net sales | 4,957 | 5,399 | ||||||
Licensing revenue | 130 | 135 | ||||||
Net revenues | 5,087 | 5,534 | ||||||
Cost of goods sold(a) | (2,255 | ) | (2,361 | ) | ||||
Gross profit | 2,832 | 3,173 | ||||||
Selling, general, and administrative expenses (a) | (2,390 | ) | (2,494 | ) | ||||
Amortization of intangible assets | (18 | ) | (17 | ) | ||||
Impairment of assets | (57 | ) | (24 | ) | ||||
Restructuring and other charges | (194 | ) | (123 | ) | ||||
Total other operating expenses, net | (2,659 | ) | (2,658 | ) | ||||
Operating income | 173 | 515 | ||||||
Foreign currency gains (losses) | 1 | (9 | ) | |||||
Interest expense | (11 | ) | (14 | ) | ||||
Interest and other income, net | 6 | 5 | ||||||
Equity in losses of equity-method investees | (5 | ) | (7 | ) | ||||
Income before income taxes | 164 | 490 | ||||||
Provision for income taxes | (59 | ) | (135 | ) | ||||
Net income | $ | 105 | $ | 355 | ||||
Net income per share - Basic | $ | 1.26 | $ | 4.15 | ||||
Net income per share - Diluted | $ | 1.25 | $ | 4.11 | ||||
Weighted average shares outstanding - Basic | 82.9 | 85.7 | ||||||
Weighted average shares outstanding - Diluted | 83.6 | 86.3 | ||||||
Dividends declared per share | $ | 1.50 | $ | 1.50 | ||||
(a) Includes total depreciation expense of: | $ | (214 | ) | $ | (210 | ) | ||
RALPH LAUREN CORPORATION | ||||||||||||||||
OTHER INFORMATION | ||||||||||||||||
(in millions) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
Net revenues and operating income for the periods ended December 31, 2016 and December 26, 2015 for each segment were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 26, | December 31, | December 26, | |||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net revenues: | ||||||||||||||||
Wholesale | $ | 582 | $ | 786 | $ | 2,020 | $ | 2,355 | ||||||||
Retail | 1,088 | 1,113 | 2,937 | 3,044 | ||||||||||||
Licensing | 44 | 47 | 130 | 135 | ||||||||||||
Total net revenues | $ | 1,714 | $ | 1,946 | $ | 5,087 | $ | 5,534 | ||||||||
Operating income: | ||||||||||||||||
Wholesale | $ | 122 | $ | 183 | $ | 458 | $ | 567 | ||||||||
Retail | 166 | 136 | 248 | 369 | ||||||||||||
Licensing | 37 | 42 | 115 | 120 | ||||||||||||
325 | 361 | 821 | 1,056 | |||||||||||||
Unallocated corporate expenses | (131 | ) | (114 | ) | (454 | ) | (418 | ) | ||||||||
Unallocated restructuring and other charges | (66 | ) | (58 | ) | (194 | ) | (123 | ) | ||||||||
Total operating income | $ | 128 | $ | 189 | $ | 173 | $ | 515 | ||||||||
RALPH LAUREN CORPORATION | ||||||||||||||||
Constant Currency Financial Measures | ||||||||||||||||
(in millions) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Same - Store Sales Data | ||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
As Reported | Constant Currency | As Reported | Constant Currency | |||||||||||||
Total Ralph Lauren | (5 | %) | (4 | %) | (6 | %) | (6 | %) | ||||||||
Operating Segment Data | ||||||||||||||||
Three Months Ended | % Change | |||||||||||||||
December 31, 2016 | December 26, 2015 | As Reported | Constant Currency | |||||||||||||
Wholesale net sales | $ | 582 | $ | 786 | (25.9 | %) | (25.3 | %) | ||||||||
Retail net sales | 1,088 | 1,113 | (2.3 | %) | (1.7 | %) | ||||||||||
Net sales | 1,670 | 1,899 | (12.1 | %) | (11.5 | %) | ||||||||||
Licensing revenue | 44 | 47 | (3.7 | %) | (3.7 | %) | ||||||||||
Net revenues | $ | 1,714 | $ | 1,946 | (11.9 | %) | (11.3 | %) | ||||||||
Nine Months Ended | % Change | |||||||||||||||
December 31, 2016 | December 26, 2015 | As Reported | Constant Currency | |||||||||||||
Wholesale net sales | $ | 2,020 | $ | 2,355 | (14.2 | %) | (13.8 | %) | ||||||||
Retail net sales | 2,937 | 3,044 | (3.5 | %) | (3.7 | %) | ||||||||||
Net sales | 4,957 | 5,399 | (8.2 | %) | (8.1 | %) | ||||||||||
Licensing revenue | 130 | 135 | (3.3 | %) | (3.9 | %) | ||||||||||
Net revenues | $ | 5,087 | $ | 5,534 | (8.1 | %) | (8.0 | %) | ||||||||
RALPH LAUREN CORPORATION | |||||
Global Retail Store Network | |||||
As of | As of | ||||
December 31, | December 26, | ||||
2016 | 2015 | ||||
Global Directly Operated Stores and Concessions |
|||||
Ralph Lauren Stores | 121 | 151 | |||
Polo Factory Stores | 281 | 274 | |||
Club Monaco Stores |
83 | 76 | |||
Total Directly Operated Stores | 485 | 501 | |||
Concessions | 634 | 589 | |||
Global Licensed Stores and Concessions |
|||||
Ralph Lauren Licensed Stores | 102 | 89 | |||
Club Monaco Licensed Stores |
59 | 57 | |||
Total Licensed Stores | 161 | 146 | |||
Licensed Concessions | 102 | 104 | |||
RALPH LAUREN CORPORATION | |||||||||||||
Reconciliation of Certain Non-U.S. GAAP Financial Measures | |||||||||||||
(in millions, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 31, 2016 | |||||||||||||
As |
Total |
As |
|||||||||||
Net revenues | $ | 1,714 | $ | - | $ | 1,714 | |||||||
Gross profit | 983 | 14 | 997 | ||||||||||
Gross profit margin | 57.3 | % | 58.2 | % | |||||||||
Total other operating expenses, net | (855 | ) | 77 | (778 | ) | ||||||||
Operating expense margin | 49.9 | % | 45.4 | % | |||||||||
Operating income | 128 | 91 | 219 | ||||||||||
Operating margin | 7.5 | % | 12.8 | % | |||||||||
Income before income taxes | 124 | 91 | 215 | ||||||||||
Provision for income taxes | (42 | ) | (18 | ) | (60 | ) | |||||||
Effective tax rate | 34.0 | % | 27.8 | % | |||||||||
Net income | $ | 82 | $ | 73 | $ | 155 | |||||||
Net income per diluted share | $ | 0.98 | $ | 1.86 | |||||||||
Weighted average shares outstanding - Basic | 82.6 | 82.6 | |||||||||||
Weighted average shares outstanding - Diluted | 83.3 | 83.3 | |||||||||||
SEGMENT INFORMATION - | |||||||||||||
OPERATING INCOME: | |||||||||||||
Wholesale | $ | 122 | $ | 4 | $ | 126 | |||||||
Operating margin | 20.9 | % | 21.5 | % | |||||||||
Retail | 166 | 16 | 182 | ||||||||||
Operating margin | 15.3 | % | 16.8 | % | |||||||||
Licensing | 37 | 5 | 42 | ||||||||||
Operating margin | 82.5 | % | 93.4 | % | |||||||||
Unallocated corporate expenses and restructuring and other charges, net | (197 | ) | 66 | (131 | ) | ||||||||
Total operating income | $ | 128 | $ | 91 | $ | 219 | |||||||
Nine Months Ended | |||||||||||||
December 31, 2016 | |||||||||||||
As |
Total |
As |
|||||||||||
Net revenues | $ | 5,087 | $ | - | $ | 5,087 | |||||||
Gross profit | 2,832 | 149 | 2,981 | ||||||||||
Gross profit margin | 55.7 | % | 58.6 | % | |||||||||
Total other operating expenses, net | (2,659 | ) | 251 | (2,408 | ) | ||||||||
Operating expense margin | 52.3 | % | 47.3 | % | |||||||||
Operating income | 173 | 400 | 573 | ||||||||||
Operating margin | 3.4 | % | 11.3 | % | |||||||||
Income before income taxes | 164 | 400 | 564 | ||||||||||
Provision for income taxes | (59 | ) | (102 | ) | (161 | ) | |||||||
Effective tax rate | 36.0 | % | 28.6 | % | |||||||||
Net income | $ | 105 | $ | 298 | $ | 403 | |||||||
Net income per diluted share | $ | 1.25 | $ | 4.82 | |||||||||
Weighted average shares outstanding - Basic | 82.9 | 82.9 | |||||||||||
Weighted average shares outstanding - Diluted | 83.6 | 83.6 | |||||||||||
SEGMENT INFORMATION - | |||||||||||||
OPERATING INCOME: | |||||||||||||
Wholesale | $ | 458 | $ | 30 | $ | 488 | |||||||
Operating margin | 22.7 | % | 24.2 | % | |||||||||
Retail | 248 | 171 | 419 | ||||||||||
Operating margin | 8.4 | % | 14.3 | % | |||||||||
Licensing | 115 | 5 | 120 | ||||||||||
Operating margin | 88.1 | % | 91.9 | % | |||||||||
Unallocated corporate expenses and restructuring and other charges, net | (648 | ) | 194 | (454 | ) | ||||||||
Total operating income | $ | 173 | $ | 400 | $ | 573 |
(a) |
Adjustments include restructuring charges, asset impairment charges, and inventory-related charges recorded in connection with our restructuring plans. Inventory-related charges are recorded within cost of goods sold in the unaudited interim consolidated statements of operations. | |
SUPPLEMENTAL FINANCIAL INFORMATION
Since
Additionally, this earnings release includes certain non-U.S. GAAP financial measures relating to charges recorded in connection with the Company’s restructuring plans. Included in this earnings release is a reconciliation between the non-U.S. GAAP financial measures and the most directly comparable U.S. GAAP measures before and after these charges. The related tax effects were calculated using the respective statutory tax rates for each applicable jurisdiction. The Company uses non-U.S. GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. The Company believes that excluding items that are not comparable from period to period helps investors and others compare operating performance between two periods. The Company’s Fiscal 2017 full year and third quarter guidance excludes restructuring and other related charges expected to be recorded in connection with the Company’s Way Forward plan. While the Company considers the non-U.S. GAAP measures useful in analyzing its results, they are not intended to replace, nor act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP and may be different from non-U.S. GAAP measures reported by other companies.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170202005631/en/
Source:
Ralph Lauren
Investor Relations:
Evren Kopelman, 212-813-7862
or
Corporate
Communications:
Katie Ioanilli, 212-205-5947
rl-press@ralphlauren.com