RALPH LAUREN CORPORATION |
(Exact Name of Registrant as Specified in Its Charter) |
DELAWARE |
(State or Other Jurisdiction of Incorporation) |
001-13057 | 13-2622036 |
(Commission File Number) | (IRS Employer Identification No.) |
650 MADISON AVENUE, NEW YORK, NEW YORK | 10022 |
(Address of Principal Executive Offices) | (Zip Code) |
(212) 318-7000
|
(Registrant’s Telephone Number, Including Area Code)
|
NOT APPLICABLE
|
(Former Name or Former Address, if Changed Since Last Report)
|
ITEM 2.02.
|
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
|
ITEM 9.01.
|
FINANCIAL STATEMENTS AND EXHIBITS.
|
(d)
|
Exhibits.
|
||
EXHIBIT NO.
|
DESCRIPTION
|
||
99.1
|
RALPH LAUREN CORPORATION | ||||
Date: November 2, 2017
|
By:
|
/s/ Jane Hamilton Nielsen | ||
Name: | Jane Hamilton Nielsen | |||
Title: | Chief Financial Officer | |||
— | Elevating Our Brand Through Improved Quality of Sales and Distribution |
o | Average unit retail across our direct-to-consumer network was up 5% to last year |
o | Discount rates were down across all regions in retail |
o | Adjusted gross margin was up 300 basis points compared to last year |
o | Continued to close unproductive distribution in retail and wholesale and significantly reduced off-price shipments and began to upgrade our store environments |
— | Evolving Product and Marketing to Increase Reach and Appeal with New Consumers |
o | Evolved our product assortment by renewing our core styles and focusing on our icons, which drove improvements in Polo Fall seasonal product sell-out trend |
o | Increased marketing reach and effectiveness with significant growth in digital and social media impressions with the Stadium launch and September Fashion Show |
o | Released limited edition products that create more reasons for consumers to engage with us and inject energy and excitement into our brand |
— | Expanding Our Digital and International Presence |
o | In Asia, expanded our high-ROI concession network and delivered 3% constant currency comp growth |
o | Continued to drive sales growth in our wholesale digital business globally |
o | Launched on T-mall, JD.com and WeChat in China |
— | Working In New Ways to Drive Productivity and Agility |
o | Reduced operating expenses by 5% on an adjusted basis to increase efficiencies |
o | Lowered inventory levels by 26% to last year and improved inventory turns |
o | Continued the progress to achieve lead time goals and increased SKU productivity |
— | North America Revenue. North America revenue in the second quarter decreased 16% to $877 million. The decline was due to lower sales in both the retail and wholesale channels, driven by distribution and brand exits, a strategic reduction in shipments and promotional activity to increase quality of sales, as well as due to lower consumer demand. On a constant currency basis, comparable store sales in North America were down 9%, including a 6% decline in brick and mortar stores and an 18% decrease in e-commerce, primarily due to a planned reduction in promotional activity and lower traffic. |
— | Europe Revenue. Europe revenue in the second quarter increased 4% to $463 million on a reported basis and was flat in constant currency. On a constant currency basis, comparable store sales in Europe were down 6%, driven by a 5% decline in brick and mortar stores and an 11% decline in e-commerce, as the Company intensified its focus on driving quality of sales with a pullback in promotions. |
— | Asia Revenue. Asia revenue in the second quarter was flat compared with the prior year period on a reported basis at $217 million and increased 4% in constant currency, driven by strength in both retail and wholesale channels. Comparable store sales increased 3% in constant currency driven by improved traffic and conversion. |
— | North America Operating Income. North America operating income in the second quarter was $203 million on both a reported and an adjusted basis. Adjusted North America operating margin was 23.2%, 150 basis point above last year, driven by gross margin improvement attributable to quality of sales initiatives. |
— | Europe Operating Income. Europe operating income in the second quarter was $126 million on both a reported and an adjusted basis. Adjusted Europe operating margin was 27.1%, which was 350 basis points higher than the prior year period and 370 basis points higher in constant currency, driven primarily by gross margin improvement attributable to quality of sales initiatives. |
— | Asia Operating Income. Asia operating income in the second quarter was $26 million on a reported basis and $27 million on an adjusted basis. Adjusted Asia operating margin was 12.6%, up 750 basis points to prior year and 580 basis points higher in constant currency, driven by both gross margin improvement and operating expense leverage. |
September 30,
|
April 1,
|
October 1,
|
||||||||||
2017
|
2017
|
2016
|
||||||||||
ASSETS
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$
|
1,111.6
|
$
|
668.3
|
$
|
434.2
|
||||||
Short-term investments
|
507.1
|
684.7
|
531.4
|
|||||||||
Accounts receivable, net of allowances
|
470.3
|
450.2
|
490.2
|
|||||||||
Inventories
|
864.6
|
791.5
|
1,172.5
|
|||||||||
Income tax receivable
|
70.5
|
79.4
|
59.1
|
|||||||||
Prepaid expenses and other current assets
|
300.3
|
280.4
|
288.4
|
|||||||||
Total current assets
|
3,324.4
|
2,954.5
|
2,975.8
|
|||||||||
Property and equipment, net
|
1,240.5
|
1,316.0
|
1,564.0
|
|||||||||
Deferred tax assets
|
143.2
|
125.9
|
118.3
|
|||||||||
Goodwill
|
933.0
|
904.6
|
935.7
|
|||||||||
Intangible assets, net
|
207.7
|
219.8
|
234.6
|
|||||||||
Other non-current assets(a)
|
179.5
|
131.2
|
238.9
|
|||||||||
Total assets
|
$
|
6,028.3
|
$
|
5,652.0
|
$
|
6,067.3
|
||||||
LIABILITIES AND EQUITY
|
||||||||||||
Current liabilities:
|
||||||||||||
Short-term debt
|
$
|
-
|
$
|
-
|
$
|
95.0
|
||||||
Current portion of long-term debt
|
298.6
|
-
|
-
|
|||||||||
Accounts payable
|
172.8
|
147.7
|
158.6
|
|||||||||
Income tax payable
|
56.7
|
29.5
|
19.6
|
|||||||||
Accrued expenses and other current liabilities
|
1,062.0
|
982.7
|
943.6
|
|||||||||
Total current liabilities
|
1,590.1
|
1,159.9
|
1,216.8
|
|||||||||
Long-term debt
|
291.8
|
588.2
|
597.4
|
|||||||||
Non-current liability for unrecognized tax benefits
|
75.2
|
62.7
|
74.3
|
|||||||||
Other non-current liabilities
|
561.6
|
541.6
|
580.9
|
|||||||||
Total liabilities
|
2,518.7
|
2,352.4
|
2,469.4
|
|||||||||
Equity:
|
||||||||||||
Common stock
|
1.3
|
1.2
|
1.2
|
|||||||||
Additional paid-in-capital
|
2,348.2
|
2,308.8
|
2,284.4
|
|||||||||
Retained earnings
|
5,874.0
|
5,751.9
|
5,956.2
|
|||||||||
Treasury stock, Class A, at cost
|
(4,578.5
|
)
|
(4,563.9
|
)
|
(4,463.6
|
)
|
||||||
Accumulated other comprehensive loss
|
(135.4
|
)
|
(198.4
|
)
|
(180.3
|
)
|
||||||
Total equity
|
3,509.6
|
3,299.6
|
3,597.9
|
|||||||||
Total liabilities and equity
|
$
|
6,028.3
|
$
|
5,652.0
|
$
|
6,067.3
|
||||||
Net Cash (incl. LT Investments)
|
1,110.9
|
786.2
|
395.6
|
|||||||||
Cash & Investments (ST & LT)
|
1,701.3
|
1,374.4
|
1,087.9
|
|||||||||
Net Cash (excl. LT Investments)
|
1,028.4
|
764.8
|
273.3
|
|||||||||
Cash & ST Investments
|
1,618.8
|
1,353.0
|
965.6
|
|||||||||
(a) Includes non-current investments of:
|
$
|
82.6
|
$
|
21.4
|
$
|
122.3
|
Three Months Ended
|
||||||||
September 30,
|
October 1,
|
|||||||
2017
|
2016
|
|||||||
North America
|
$
|
876.7
|
$
|
1,044.8
|
||||
Europe
|
463.0
|
445.8
|
||||||
Asia
|
216.8
|
216.5
|
||||||
Other non-reportable segments
|
107.7
|
113.5
|
||||||
Net revenues
|
1,664.2
|
1,820.6
|
||||||
Cost of goods sold(a)
|
(668.4
|
)
|
(866.4
|
)
|
||||
Gross profit
|
995.8
|
954.2
|
||||||
Selling, general, and administrative expenses(a)
|
(766.7
|
)
|
(803.3
|
)
|
||||
Amortization of intangible assets
|
(6.0
|
)
|
(6.1
|
)
|
||||
Impairment of assets
|
(11.2
|
)
|
(27.0
|
)
|
||||
Restructuring and other charges(a)
|
(18.6
|
)
|
(41.5
|
)
|
||||
Total other operating expenses, net
|
(802.5
|
)
|
(877.9
|
)
|
||||
Operating income
|
193.3
|
76.3
|
||||||
Foreign currency gains
|
1.7
|
1.1
|
||||||
Interest expense
|
(4.6
|
)
|
(4.1
|
)
|
||||
Interest and other income, net
|
2.0
|
2.3
|
||||||
Equity in losses of equity-method investees
|
(1.2
|
)
|
(1.9
|
)
|
||||
Income before income taxes
|
191.2
|
73.7
|
||||||
Income tax provision
|
(47.4
|
)
|
(28.0
|
)
|
||||
Net income
|
$
|
143.8
|
$
|
45.7
|
||||
Net income per share - Basic
|
$
|
1.76
|
$
|
0.55
|
||||
Net income per share - Diluted
|
$
|
1.75
|
$
|
0.55
|
||||
Weighted average shares outstanding - Basic
|
81.7
|
82.7
|
||||||
Weighted average shares outstanding - Diluted
|
82.3
|
83.2
|
||||||
Dividends declared per share
|
$
|
0.50
|
$
|
0.50
|
||||
(a) Includes total depreciation expense of:
|
$
|
(67.8
|
)
|
$
|
(69.5
|
)
|
Six Months Ended
|
||||||||
September 30,
|
October 1,
|
|||||||
2017
|
2016
|
|||||||
North America
|
$
|
1,586.4
|
$
|
1,900.4
|
||||
Europe
|
786.5
|
823.4
|
||||||
Asia
|
425.9
|
427.6
|
||||||
Other non-reportable segments
|
212.5
|
221.4
|
||||||
Net revenues
|
3,011.3
|
3,372.8
|
||||||
Cost of goods sold(a)
|
(1,164.3
|
)
|
(1,524.0
|
)
|
||||
Gross profit
|
1,847.0
|
1,848.8
|
||||||
Selling, general, and administrative expenses(a)
|
(1,475.1
|
)
|
(1,618.0
|
)
|
||||
Amortization of intangible assets
|
(12.0
|
)
|
(12.1
|
)
|
||||
Impairment of assets
|
(20.9
|
)
|
(46.4
|
)
|
||||
Restructuring and other charges(a)
|
(55.4
|
)
|
(127.2
|
)
|
||||
Total other operating expenses, net
|
(1,563.4
|
)
|
(1,803.7
|
)
|
||||
Operating income
|
283.6
|
45.1
|
||||||
Foreign currency gains
|
1.8
|
3.5
|
||||||
Interest expense
|
(9.6
|
)
|
(7.5
|
)
|
||||
Interest and other income, net
|
4.3
|
3.2
|
||||||
Equity in losses of equity-method investees
|
(2.1
|
)
|
(3.8
|
)
|
||||
Income before income taxes
|
278.0
|
40.5
|
||||||
Income tax provision
|
(74.7
|
)
|
(17.1
|
)
|
||||
Net income
|
$
|
203.3
|
$
|
23.4
|
||||
Net income per share - Basic
|
$
|
2.49
|
$
|
0.28
|
||||
Net income per share - Diluted
|
$
|
2.47
|
$
|
0.28
|
||||
Weighted average shares outstanding - Basic
|
81.6
|
83.0
|
||||||
Weighted average shares outstanding - Diluted
|
82.4
|
83.7
|
||||||
Dividends declared per share
|
$
|
1.00
|
$
|
1.00
|
||||
(a) Includes total depreciation expense of:
|
$
|
(134.7
|
)
|
$
|
(141.9
|
)
|
Six Months Ended
|
||||||||
September 30,
|
October 1,
|
|||||||
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
203.3
|
$
|
23.4
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization expense
|
146.7
|
154.0
|
||||||
Deferred income tax benefit
|
(25.3
|
)
|
(8.7
|
)
|
||||
Equity in loss of equity-method investees
|
2.1
|
3.8
|
||||||
Non-cash stock-based compensation expense
|
39.4
|
31.9
|
||||||
Non-cash impairment of assets
|
20.9
|
46.4
|
||||||
Non-cash restructuring-related inventory charges
|
1.3
|
135.0
|
||||||
Other non-cash charges
|
2.3
|
9.9
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(17.4
|
)
|
21.9
|
|||||
Inventories
|
(53.4
|
)
|
(172.6
|
)
|
||||
Prepaid expenses and other current assets
|
(1.9
|
)
|
(26.6
|
)
|
||||
Accounts payable and accrued expenses
|
72.2
|
59.8
|
||||||
Income tax receivables and payables
|
51.4
|
(22.0
|
)
|
|||||
Deferred income
|
3.0
|
(12.2
|
)
|
|||||
Other balance sheet changes
|
(7.6
|
)
|
(11.4
|
)
|
||||
Net cash provided by operating activities
|
437.0
|
232.6
|
||||||
-
|
-
|
|||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(74.7
|
)
|
(165.4
|
)
|
||||
Purchases of investments
|
(426.3
|
)
|
(392.4
|
)
|
||||
Proceeds from sales and maturities of investments
|
591.3
|
546.6
|
||||||
Acquisitions and ventures
|
(3.6
|
)
|
(2.5
|
)
|
||||
Net cash provided by (used in) investing activities
|
86.7
|
(13.7
|
)
|
|||||
-
|
-
|
|||||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of short-term debt
|
-
|
2,945.3
|
||||||
Repayments of short-term debt
|
-
|
(2,966.4
|
)
|
|||||
Payments of capital lease obligations
|
(14.2
|
)
|
(13.3
|
)
|
||||
Payments of dividends
|
(81.1
|
)
|
(82.6
|
)
|
||||
Repurchases of common stock, including shares surrendered for tax withholdings
|
(14.6
|
)
|
(114.9
|
)
|
||||
Proceeds from exercise of stock options
|
0.1
|
4.0
|
||||||
Net cash used in financing activities
|
(109.8
|
)
|
(227.9
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
33.2
|
(12.9
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
447.1
|
(21.9
|
)
|
|||||
Cash, cash equivalents, and restricted cash at beginning of period
|
711.8
|
502.1
|
||||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
1,158.9
|
$
|
480.2
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
September 30,
|
October 1,
|
September 30,
|
October 1,
|
|||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Net revenues:
|
||||||||||||||||
North America
|
$
|
876.7
|
$
|
1,044.8
|
$
|
1,586.4
|
$
|
1,900.4
|
||||||||
Europe
|
463.0
|
445.8
|
786.5
|
823.4
|
||||||||||||
Asia
|
216.8
|
216.5
|
425.9
|
427.6
|
||||||||||||
Other non-reportable segments
|
107.7
|
113.5
|
212.5
|
221.4
|
||||||||||||
Total net revenues
|
$
|
1,664.2
|
$
|
1,820.6
|
$
|
3,011.3
|
$
|
3,372.8
|
||||||||
Operating income (loss):
|
||||||||||||||||
North America
|
$
|
202.7
|
$
|
202.4
|
$
|
353.2
|
$
|
368.2
|
||||||||
Europe
|
125.5
|
100.4
|
192.6
|
175.4
|
||||||||||||
Asia
|
26.5
|
(65.8
|
)
|
56.7
|
(103.6
|
)
|
||||||||||
Other non-reportable segments
|
26.3
|
30.0
|
59.3
|
57.8
|
||||||||||||
381.0
|
267.0
|
661.8
|
497.8
|
|||||||||||||
Unallocated corporate expenses
|
(169.1
|
)
|
(149.2
|
)
|
(322.8
|
)
|
(325.5
|
)
|
||||||||
Unallocated restructuring and other charges
|
(18.6
|
)
|
(41.5
|
)
|
(55.4
|
)
|
(127.2
|
)
|
||||||||
Total operating income
|
$
|
193.3
|
$
|
76.3
|
$
|
283.6
|
$
|
45.1
|
Three Months Ended
September 30, 2017 % Change |
Six Months Ended
September 30, 2017 % Change |
|||||||||||||||
As Reported
|
Constant Currency
|
As Reported
|
Constant Currency
|
|||||||||||||
North America
|
||||||||||||||||
E-commerce
|
(18
|
%)
|
(18
|
%)
|
(20
|
%)
|
(20
|
%)
|
||||||||
Excluding E-commerce
|
(6
|
%)
|
(6
|
%)
|
(5
|
%)
|
(5
|
%)
|
||||||||
Total North America
|
(8
|
%)
|
(9
|
%)
|
(8
|
%)
|
(8
|
%)
|
||||||||
Europe
|
||||||||||||||||
E-commerce
|
(8
|
%)
|
(11
|
%)
|
(7
|
%)
|
(9
|
%)
|
||||||||
Excluding E-commerce
|
(2
|
%)
|
(5
|
%)
|
(7
|
%)
|
(7
|
%)
|
||||||||
Total Europe
|
(3
|
%)
|
(6
|
%)
|
(7
|
%)
|
(7
|
%)
|
||||||||
Asia(a)
|
(1
|
%)
|
3
|
%
|
0
|
%
|
3
|
%
|
||||||||
Total Ralph Lauren
|
(5
|
%)
|
(6
|
%)
|
(6
|
%)
|
(6
|
%)
|
(a)
|
Comparable store sales for our Asia segment were comprised primarily of sales made through our stores and concession shops.
|
Three Months Ended
|
% Change
|
|||||||||||||||
September 30, 2017
|
October 1, 2016
|
As Reported
|
Constant Currency
|
|||||||||||||
North America
|
$
|
876.7
|
$
|
1,044.8
|
(16.1
|
%)
|
(16.2
|
%)
|
||||||||
Europe
|
463.0
|
445.8
|
3.9
|
%
|
0.3
|
%
|
||||||||||
Asia
|
216.8
|
216.5
|
0.2
|
%
|
4.3
|
%
|
||||||||||
Other non-reportable segments
|
107.7
|
113.5
|
(5.2
|
%)
|
(4.6
|
%)
|
||||||||||
Net revenues
|
$
|
1,664.2
|
$
|
1,820.6
|
(8.6
|
%)
|
(9.0
|
%)
|
||||||||
Six Months Ended
|
% Change
|
|||||||||||||||
September 30, 2017
|
October 1, 2016
|
As Reported
|
Constant Currency
|
|||||||||||||
North America
|
$
|
1,586.4
|
$
|
1,900.4
|
(16.5
|
%)
|
(16.5
|
%)
|
||||||||
Europe
|
786.5
|
823.4
|
(4.5
|
%)
|
(4.5
|
%)
|
||||||||||
Asia
|
425.9
|
427.6
|
(0.4
|
%)
|
2.4
|
%
|
||||||||||
Other non-reportable segments
|
212.5
|
221.4
|
(4.0
|
%)
|
(3.3
|
%)
|
||||||||||
Net revenues
|
$
|
3,011.3
|
$
|
3,372.8
|
(10.7
|
%)
|
(10.3
|
%)
|
September 30,
|
October 1,
|
|||||||
2017
|
2016
|
|||||||
North America
|
||||||||
Ralph Lauren Stores
|
44
|
50
|
||||||
Polo Factory Stores
|
171
|
168
|
||||||
Total Directly Operated Stores
|
215
|
218
|
||||||
Concessions
|
2
|
1
|
||||||
Europe
|
||||||||
Ralph Lauren Stores
|
20
|
26
|
||||||
Polo Factory Stores
|
63
|
59
|
||||||
Total Directly Operated Stores
|
83
|
85
|
||||||
Concessions
|
25
|
36
|
||||||
Asia
|
||||||||
Ralph Lauren Stores
|
45
|
52
|
||||||
Polo Factory Stores
|
48
|
48
|
||||||
Total Directly Operated Stores
|
93
|
100
|
||||||
Concessions
|
593
|
582
|
||||||
Other
|
||||||||
Club Monaco Stores
|
78
|
82
|
||||||
Club Monaco Concessions
|
2
|
2
|
||||||
Global Directly Operated Stores and Concessions
|
||||||||
Ralph Lauren Stores
|
109
|
128
|
||||||
Polo Factory Stores
|
282
|
275
|
||||||
Club Monaco Stores
|
78
|
82
|
||||||
Total Directly Operated Stores
|
469
|
485
|
||||||
Concessions
|
622
|
621
|
||||||
Global Licensed Stores and Concessions
|
||||||||
Ralph Lauren Licensed Stores
|
84
|
102
|
||||||
Club Monaco Licensed Stores
|
62
|
59
|
||||||
Total Licensed Stores
|
146
|
161
|
||||||
Licensed Concessions
|
122
|
97
|
Three Months Ended
|
||||||||||||
September 30, 2017
|
||||||||||||
As
Reported |
Total
Adjustments(a)(b) |
As
Adjusted |
||||||||||
Net revenues
|
$
|
1,664.2
|
$
|
-
|
$
|
1,664.2
|
||||||
Gross profit
|
995.8
|
0.6
|
996.4
|
|||||||||
Gross profit margin
|
59.8
|
%
|
59.9
|
%
|
||||||||
Total other operating expenses, net
|
(802.5
|
)
|
29.8
|
(772.7
|
)
|
|||||||
Operating expense margin
|
48.2
|
%
|
46.4
|
%
|
||||||||
Operating income
|
193.3
|
30.4
|
223.7
|
|||||||||
Operating margin
|
11.6
|
%
|
13.4
|
%
|
||||||||
Income before income taxes
|
191.2
|
30.4
|
221.6
|
|||||||||
Income tax provision
|
(47.4
|
)
|
(10.1
|
)
|
(57.5
|
)
|
||||||
Effective tax rate
|
24.8
|
%
|
25.9
|
%
|
||||||||
Net income
|
$
|
143.8
|
$
|
20.3
|
$
|
164.1
|
||||||
Net income per diluted share
|
$
|
1.75
|
$
|
1.99
|
||||||||
Weighted average shares outstanding - Basic
|
81.7
|
81.7
|
||||||||||
Weighted average shares outstanding - Diluted
|
82.3
|
82.3
|
||||||||||
SEGMENT INFORMATION -
|
||||||||||||
OPERATING INCOME:
|
||||||||||||
North America
|
$
|
202.7
|
$
|
0.4
|
$
|
203.1
|
||||||
Operating margin
|
23.1
|
%
|
23.2
|
%
|
||||||||
Europe
|
125.5
|
0.1
|
125.6
|
|||||||||
Operating margin
|
27.1
|
%
|
27.1
|
%
|
||||||||
Asia
|
26.5
|
0.8
|
27.3
|
|||||||||
Operating margin
|
12.2
|
%
|
12.6
|
%
|
||||||||
Other non-reportable segments
|
26.3
|
8.9
|
35.2
|
|||||||||
Operating margin
|
24.4
|
%
|
32.8
|
%
|
||||||||
Unallocated corporate expenses and restructuring and other charges, net
|
(187.7
|
)
|
20.2
|
(167.5
|
)
|
|||||||
Total operating income
|
$
|
193.3
|
$
|
30.4
|
$
|
223.7
|
||||||
Six Months Ended
|
||||||||||||
September 30, 2017
|
||||||||||||
As
Reported |
Total
Adjustments(a)(c) |
As
Adjusted |
||||||||||
Net revenues
|
$
|
3,011.3
|
$
|
-
|
$
|
3,011.3
|
||||||
Gross profit
|
1,847.0
|
1.3
|
1,848.3
|
|||||||||
Gross profit margin
|
61.3
|
%
|
61.4
|
%
|
||||||||
Total other operating expenses, net
|
(1,563.4
|
)
|
76.3
|
(1,487.1
|
)
|
|||||||
Operating expense margin
|
51.9
|
%
|
49.4
|
%
|
||||||||
Operating income
|
283.6
|
77.6
|
361.2
|
|||||||||
Operating margin
|
9.4
|
%
|
12.0
|
%
|
||||||||
Income before income taxes
|
278.0
|
77.6
|
355.6
|
|||||||||
Income tax provision
|
(74.7
|
)
|
(25.7
|
)
|
(100.4
|
)
|
||||||
Effective tax rate
|
26.9
|
%
|
28.2
|
%
|
||||||||
Net income
|
$
|
203.3
|
$
|
51.9
|
$
|
255.2
|
||||||
Net income per diluted share
|
$
|
2.47
|
$
|
3.10
|
||||||||
Weighted average shares outstanding - Basic
|
81.6
|
81.6
|
||||||||||
Weighted average shares outstanding - Diluted
|
82.4
|
82.4
|
||||||||||
SEGMENT INFORMATION -
|
||||||||||||
OPERATING INCOME:
|
||||||||||||
North America
|
$
|
353.2
|
$
|
1.7
|
$
|
354.9
|
||||||
Operating margin
|
22.3
|
%
|
22.4
|
%
|
||||||||
Europe
|
192.6
|
1.3
|
193.9
|
|||||||||
Operating margin
|
24.5
|
%
|
24.7
|
%
|
||||||||
Asia
|
56.7
|
0.9
|
57.6
|
|||||||||
Operating margin
|
13.3
|
%
|
13.5
|
%
|
||||||||
Other non-reportable segments
|
59.3
|
9.0
|
68.3
|
|||||||||
Operating margin
|
27.9
|
%
|
32.2
|
%
|
||||||||
Unallocated corporate expenses and restructuring and other charges, net
|
(378.2
|
)
|
64.7
|
(313.5
|
)
|
|||||||
Total operating income
|
$
|
283.6
|
$
|
77.6
|
$
|
361.2
|
Three Months Ended
|
||||||||||||
October 1, 2016
|
||||||||||||
As
Reported |
Total
Adjustments(a)(d) |
As
Adjusted |
||||||||||
Net revenues
|
$
|
1,820.6
|
$
|
-
|
$
|
1,820.6
|
||||||
Gross profit
|
954.2
|
81.0
|
1,035.2
|
|||||||||
Gross profit margin
|
52.4
|
%
|
56.9
|
%
|
||||||||
Total other operating expenses, net
|
(877.9
|
)
|
68.5
|
(809.4
|
)
|
|||||||
Operating expense margin
|
48.2
|
%
|
44.5
|
%
|
||||||||
Operating income
|
76.3
|
149.5
|
225.8
|
|||||||||
Operating margin
|
4.2
|
%
|
12.4
|
%
|
||||||||
Income before income taxes
|
73.7
|
149.5
|
223.2
|
|||||||||
Income tax provision
|
(28.0
|
)
|
(36.9
|
)
|
(64.9
|
)
|
||||||
Effective tax rate
|
38.0
|
%
|
29.0
|
%
|
||||||||
Net income
|
$
|
45.7
|
$
|
112.6
|
$
|
158.3
|
||||||
Net income per diluted share
|
$
|
0.55
|
$
|
1.90
|
||||||||
Weighted average shares outstanding - Basic
|
82.7
|
82.7
|
||||||||||
Weighted average shares outstanding - Diluted
|
83.2
|
83.2
|
||||||||||
SEGMENT INFORMATION -
|
||||||||||||
OPERATING INCOME/(LOSS):
|
||||||||||||
North America
|
$
|
202.4
|
$
|
24.8
|
$
|
227.2
|
||||||
Operating margin
|
19.4
|
%
|
21.7
|
%
|
||||||||
Europe
|
100.4
|
4.8
|
105.2
|
|||||||||
Operating margin
|
22.5
|
%
|
23.6
|
%
|
||||||||
Asia
|
(65.8
|
)
|
76.8
|
11.0
|
||||||||
Operating margin
|
(30.4
|
%)
|
5.1
|
%
|
||||||||
Other non-reportable segments
|
30.0
|
1.6
|
31.6
|
|||||||||
Operating margin
|
26.4
|
%
|
27.9
|
%
|
||||||||
Unallocated corporate expenses and restructuring and other charges, net
|
(190.7
|
)
|
41.5
|
(149.2
|
)
|
|||||||
Total operating income
|
$
|
76.3
|
$
|
149.5
|
$
|
225.8
|
||||||
Six Months Ended
|
||||||||||||
October 1, 2016
|
||||||||||||
As
Reported |
Total
Adjustments(a)(d) |
As
Adjusted |
||||||||||
Net revenues
|
$
|
3,372.8
|
$
|
-
|
$
|
3,372.8
|
||||||
Gross profit
|
1,848.8
|
135.0
|
1,983.8
|
|||||||||
Gross profit margin
|
54.8
|
%
|
58.8
|
%
|
||||||||
Total other operating expenses, net
|
(1,803.7
|
)
|
173.6
|
(1,630.1
|
)
|
|||||||
Operating expense margin
|
53.5
|
%
|
48.3
|
%
|
||||||||
Operating income
|
45.1
|
308.6
|
353.7
|
|||||||||
Operating margin
|
1.3
|
%
|
10.5
|
%
|
||||||||
Income before income taxes
|
40.5
|
308.6
|
349.1
|
|||||||||
Income tax provision
|
(17.1
|
)
|
(84.2
|
)
|
(101.3
|
)
|
||||||
Effective tax rate
|
42.2
|
%
|
29.0
|
%
|
||||||||
Net income
|
$
|
23.4
|
$
|
224.4
|
$
|
247.8
|
||||||
Net income per diluted share
|
$
|
0.28
|
$
|
2.96
|
||||||||
Weighted average shares outstanding - Basic
|
83.0
|
83.0
|
||||||||||
Weighted average shares outstanding - Diluted
|
83.7
|
83.7
|
||||||||||
SEGMENT INFORMATION -
|
||||||||||||
OPERATING INCOME/(LOSS):
|
||||||||||||
North America
|
$
|
368.2
|
$
|
32.5
|
$
|
400.7
|
||||||
Operating margin
|
19.4
|
%
|
21.1
|
%
|
||||||||
Europe
|
175.4
|
14.1
|
189.5
|
|||||||||
Operating margin
|
21.3
|
%
|
23.0
|
%
|
||||||||
Asia
|
(103.6
|
)
|
129.6
|
26.0
|
||||||||
Operating margin
|
(24.2
|
%)
|
6.1
|
%
|
||||||||
Other non-reportable segments
|
57.8
|
4.6
|
62.4
|
|||||||||
Operating margin
|
26.1
|
%
|
28.2
|
%
|
||||||||
Unallocated corporate expenses and restructuring charges, net
|
(452.7
|
)
|
127.8
|
(324.9
|
)
|
|||||||
Total operating income
|
$
|
45.1
|
$
|
308.6
|
$
|
353.7
|
(a)
|
Adjustments for inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations. Adjustments for impairment-related charges are recorded within impairment of assets in the consolidated statements of operations. Adjustments for all other charges are recorded in restructuring and other charges in the consolidated statements of operations.
|
(b)
|
Adjustments for the three months ended September 30, 2017 include (i) charges of $20.0 million recorded in connection with the Way Forward plan, consisting of restructuring charges, impairment of assets, and inventory-related charges; (ii) additional impairment of assets of $9.1 million related to underperforming stores as a result of on-going store portfolio evaluation; and (iii) net other charges of $1.3 million related to depreciation expense associated with the Company's former Polo store at 711 Fifth Avenue in New York City and the reversal of reserves associated with the settlement of certain non-income tax issues.
|
(c)
|
Adjustments for the six months ended September 30, 2017 include (i) charges of $57.0 million recorded in connection with the Way Forward plan, consisting of restructuring charges, impairment of assets, and inventory-related charges; (ii) additional impairment of assets of $9.1 million related to underperforming stores as a result of on-going store portfolio evaluation; and (iii) net other charges of $11.5 million primarily related to depreciation expense associated with the Company's former Polo store at 711 Fifth Avenue in New York City, the departure of Mr. Stefan Larsson, and the reversal of reserves associated with the settlement of certain non-income tax issues.
|
(d)
|
Adjustments for the three-month and six-month periods ended October 1, 2016 include charges of $149.5 million and $308.6 million, respectively, recorded in connection with the Company’s restructuring plans, consisting of restructuring charges, impairment of assets, and inventory-related charges.
|