NYSE RL:$125.54 0.09
|  |   View printer-friendly version | << Back |  | Ralph Lauren Reports Third Quarter Fiscal 2019 Results | NEW YORK--(BUSINESS WIRE)--Feb. 5, 2019--
Ralph Lauren Corporation (NYSE:RL), a global leader in the design,
marketing, and distribution of premium lifestyle products, today
reported net revenue growth of 5% (6% in constant currency) and earnings
per diluted share of $1.48 on a reported basis and $2.32 on an adjusted
basis, excluding restructuring-related and other charges, for the third
quarter of Fiscal 2019. This compared to earnings per diluted share of
($1.00) on a reported basis and $2.03 on an adjusted basis, excluding
restructuring-related and other charges, for the third quarter of Fiscal
2018.
“Our passionate teams are focused on staying true to the authentic
expression of the Ralph Lauren lifestyle while evolving with the
changing consumer and global retail landscape around us,” said Ralph
Lauren, Executive Chairman and Chief Creative Officer. “As we continue
to strengthen the foundations of our business and elevate our iconic
brand, I am pleased with the progress we are making.”
“Solid execution on our key initiatives, especially during the important
holiday period, delivered better-than-expected results for the third
quarter as we drove higher average unit retail and continued to improve
quality of sales overall,” said Patrice Louvet, President and Chief
Executive Officer. “These results give us confidence that our strategic
investments in brand-building, product, digital, and global expansion
are on the right track, while the strength of our balance sheet will
continue to be a competitive advantage as we manage through an
increasingly volatile global environment.”
We delivered across the following strategic initiatives in the third
quarter of Fiscal 2019:
-
Win Over a New Generation of Consumers
-
Increased marketing investment by 18% to last year, with a focus
on driving brand awareness and engagement over the holiday season
-
Elevated our brand and connected with new consumers through our
collaboration with UK-based streetwear brand Palace and our Winter
Stadium Limited Edition launch
-
Continued to leverage celebrity and social influencers that
resonate with different segments of the Ralph Lauren consumer
base, including custom designs for the wedding of Nick Jonas and
Priyanka Chopra and new Ralph Lauren Romance fragrance ambassador
Taylor Hill
-
Energize Core Products and Accelerate Under-Developed Categories
-
Average unit retail across our direct-to-consumer network was up
9% through elevating the product assortment and continued quality
of sales initiatives
-
Denim and outerwear category sell-out trends were encouraging,
driven by an improved merchandising and distribution focus
-
Our limited edition Polo collections continued to gain traction as
we leveraged our Polo mobile app in the U.S. and marketing
programs globally
-
Drive Targeted Expansion in Our Regions and Channels
-
North America sales increased 3% to last year, with 4% retail
comps more than offsetting planned reductions to the off-price
wholesale channel
-
Solid growth in international markets, with double-digit revenue
growth in both Europe and Asia on a reported and constant currency
basis
-
Momentum in Asia continued with 11% revenue growth and 4% comps in
constant currency, led by 19% constant currency growth in Greater
China and strength across Japan, South Korea and Australia
-
Continued to expand our global distribution with new retail stores
and digital pure players
-
Lead With Digital
-
Global digital revenue grew 20% to last year in constant currency,
driven by strength across all regions
-
Growth in our directly-operated digital flagships exceeded our
expectations, with a digital comp increase of 21% in North America
as we anniversaried our platform upgrade and 13% in Europe. These
improvements were driven by brand building initiatives, an
enhanced consumer experience, and higher quality of sales – all
enabled by our new platform
-
Reinforced our brand presence in China through continued expansion
of our China digital commerce site launched in September and
pure-play partnerships
-
Operate With Discipline to Fuel Growth
-
Adjusted gross margin was up 90 basis points driven by quality of
sales
-
Adjusted operating expenses, excluding our marketing investment,
were slightly below third quarter revenue growth despite a
significant acceleration in digital commerce sales
-
Continued to consolidate our real estate footprint with the
completed sale of our Beechwood facility in North Carolina,
driving increased efficiency in our North America distribution
network
Third Quarter Fiscal 2019 Income Statement Review
Net Revenue. In the third quarter of Fiscal 2019, revenue
increased by 5.1% to $1.7 billion on a reported basis and was up 6.3% in
constant currency, driven by positive results across regions. Foreign
currency negatively impacted revenue growth by approximately 120 basis
points in the third quarter.
Revenue performance for the Company’s reportable segments in the third
quarter compared to the prior year period was:
-
North America Revenue. North America revenue in the third
quarter increased 3% to $909 million. North America wholesale revenue
was down 3% to last year reflecting planned reductions in off-price
sales. In retail, comparable store sales in North America were up 4%,
including flat comps in brick and mortar stores and a 21% increase in
digital commerce.
-
Europe Revenue. Europe revenue in the third quarter increased
10% to $415 million on a reported basis and increased 13% to last year
in constant currency. In retail, comparable store sales in Europe were
up 4% on a constant currency basis, driven by a 3% increase in brick
and mortar store comps and a 13% increase in digital commerce. Europe
wholesale revenue increased 16% on a reported basis and increased 20%
in constant currency. As previously discussed, third quarter results
partly benefited from a shift in timing of shipments that will
negatively impact fourth quarter results.
-
Asia Revenue. Asia revenue in the third quarter increased 10%
to $275 million on a reported basis and increased 11% in constant
currency, with strong performance across every market, including 19%
constant currency growth in Greater China. Comparable store sales in
Asia increased 4% in constant currency, reflecting growth in both
brick and mortar and digital commerce operations.
Gross Profit. Gross profit for the third quarter of Fiscal
2019 was $1.1 billion and gross margin was 61.4%. On an adjusted basis,
gross margin was 61.6%, 90 basis points above the prior year.
The increase in adjusted gross margin was driven by initiatives to
improve quality of sales through reduced promotional activity and
improved pricing as well as favorable product and channel sales mix.
Foreign currency benefited gross margin by 30 basis points in the third
quarter.
Operating Expenses. Operating expenses in the third
quarter of Fiscal 2019 were $866 million on a reported basis, including
$42 million in restructuring-related and other charges. On an adjusted
basis, excluding such charges, operating expenses were $823 million, up
6% to prior year driven by an 18% increase in marketing investment.
Excluding marketing, adjusted operating expenses were up 4.6%, slightly
behind revenue growth in the quarter.
Adjusted operating expense rate was 47.7%, 20 basis points above the
prior year period, excluding restructuring-related and other charges.
This increase was due to increased marketing investment, new store
expansion, and channel mix shift as a greater portion of our revenue was
generated by our retail businesses, which typically carry a higher
operating expense rate.
Operating Income. Operating income for the third quarter
of Fiscal 2019 was $194 million on a reported basis, including
restructuring-related and other charges of $45 million, and operating
margin was 11.2%. Adjusted operating income was $239 million and
adjusted operating margin was 13.9%, 70 basis points above the prior
year, excluding restructuring-related and other charges from both
periods, driven by gross margin expansion. Foreign currency benefited
operating margin by 20 basis points in the third quarter.
-
North America Operating Income. North America operating income
in the third quarter was $204 million on a reported and $205 million
on an adjusted basis. Adjusted North America operating margin was
22.6%, up 20 basis points to last year.
-
Europe Operating Income. Europe operating income in the third
quarter was $91 million on a reported and $93 million on an adjusted
basis. Adjusted Europe operating margin was 22.4%, 100 basis points
higher than the prior year period. In constant currency, the adjusted
operating margin declined by 40 basis points, as strong sales leverage
was more than offset by gross margin contraction.
-
Asia Operating Income. Asia operating income in the third
quarter was $48 million on both a reported and adjusted basis.
Adjusted Asia operating margin was 17.4%, down 30 basis points to the
prior year and down 10 basis points in constant currency, as gross
margin expansion was more than offset by an increase in SG&A due to
new store openings and higher marketing investments.
Net Income and EPS. On a reported basis, net income in the
third quarter of Fiscal 2019 was $120 million or $1.48 per diluted
share. On an adjusted basis, net income was $188 million, or $2.32 per
diluted share, excluding restructuring-related and other charges. This
compared to a net loss of $82 million, or $1.00 per diluted share on a
reported basis, and net income of $167 million, or $2.03 per diluted
share on an adjusted basis, for the third quarter of Fiscal 2018.
In the third quarter of Fiscal 2019, the Company had an effective tax
rate of 39.8% on a reported and 23.2% on an adjusted basis, excluding
restructuring-related and other charges. This compared to a reported and
adjusted effective tax rate of 143.9% and 21.6%, respectively, in the
prior year period.
Balance Sheet and Cash Flow Review
The Company ended the third quarter of Fiscal 2019 with $2.1 billion in
cash and short and long-term investments and $687 million in total debt,
compared to $2.1 billion and $589 million, respectively, at the end of
the third quarter of Fiscal 2018.
Inventory at the end of the third quarter of Fiscal 2019 was $914
million, up 11% compared to the prior year period. Similar to second
quarter, the increase reflected planned investments to support global
store expansion and earlier deliveries versus the prior year to better
align with customer demand. Higher inventories also included increased
shipments to our Europe wholesale customers and factory stores as we
continued to restore our product assortment following significant
pullbacks. We expect inventory levels to normalize as we move through
the end of the fiscal year.
The Company repurchased approximately $208 million of Class A Common
Stock during the third quarter. Approximately $700 million remained
available under the Company’s authorized share repurchase programs at
the end of the third quarter.
Full Year Fiscal 2019 and Fourth Quarter Outlook
The full year Fiscal 2019 and fourth quarter guidance excludes
restructuring-related and other charges, as described in the “Non-U.S.
GAAP Financial Measures” section of this press release.
For Fiscal 2019, the Company now expects net revenue to be up slightly
on a constant currency basis. Foreign currency is expected to have
approximately 80 to 90 basis points of negative impact on revenue growth
in Fiscal 2019.
The Company now expects operating margin for Fiscal 2019 to increase 60
basis points in constant currency, up from 40 to 60 basis points
previously, driven by gross margin expansion. Foreign currency is
expected to have minimal impact on operating margin in Fiscal 2019.
In the fourth quarter of Fiscal 2019, the Company expects net revenue to
be down slightly in constant currency due to a planned reduction in
off-price sales. Foreign currency is expected to pressure revenue growth
by about 300 basis points in the fourth quarter of Fiscal 2019.
Operating margin for the fourth quarter of Fiscal 2019 is expected to be
up about 70 basis points in constant currency. Foreign currency is
expected to have about 60 basis points of negative impact on operating
margin in the fourth quarter.
We expect the full year Fiscal 2019 tax rate to be approximately 21%.
The tax rate for the fourth quarter of Fiscal 2019 is estimated at 16%
to 17%.
The Company now expects capital expenditures of approximately $250
million for Fiscal 2019, down from our previous expectation of $275
million due to timing shifts into Fiscal 2020.
Conference Call
As previously announced, the Company will host a conference call and
live online webcast today, Tuesday, February 5th, at 9:00
A.M. Eastern. Listeners may access a live broadcast of the conference
call on the Company's investor relations website at http://investor.ralphlauren.com
or by dialing 517-623-4963 or 800-857-5209. To access the conference
call, listeners should dial in by 8:45 a.m. Eastern and request to be
connected to the Ralph Lauren Third Quarter 2019 conference call.
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 12:00 P.M.
Eastern, Tuesday, February 5, 2019 through 6:00 P.M. Eastern, Tuesday,
February 12, 2019 by dialing 203-369-1055 or 866-441-1047 and entering
passcode 6412.
ABOUT RALPH LAUREN
Ralph Lauren Corporation (NYSE:RL) is a global leader in the design,
marketing and distribution of premium lifestyle products in five
categories: apparel, accessories, home, fragrances, and hospitality. For
more than 50 years, Ralph Lauren's reputation and distinctive image have
been consistently developed across an expanding number of products,
brands and international markets. The Company's brand names, which
include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple
Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph
Lauren Children, Chaps, and Club Monaco, among others, constitute one of
the world's most widely recognized families of consumer brands. For more
information, go to http://investor.ralphlauren.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release and oral statements made from time to time by
representatives of the Company may contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include statements under
“Full Year Fiscal 2019 and Fourth Quarter Outlook” and the 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,” “can” 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 long-term growth strategy and achieve
anticipated operating enhancements and cost reductions from our
restructuring plans; the impact to our business resulting from
investments and other costs incurred in connection with the execution of
our long-term growth strategy, including restructuring-related charges,
which may be dilutive to our earnings in the short term; our ability to
continue to expand or grow our business internationally and the impact
of related changes in our customer, channel, and geographic sales mix as
a result; our ability to open new retail stores, concession shops, and
digital commerce sites in an effort to expand our direct-to-consumer
presence; the impact to our business resulting from changes in
consumers' ability, willingness, or preferences to purchase premium
lifestyle products that we offer for sale and our ability to forecast
consumer demand, which could result in either a build-up or shortage of
inventory; our ability to continue to maintain our brand image and
reputation and protect our trademarks; our ability to effectively manage
inventory levels and the increasing pressure on our margins in a highly
promotional retail environment; the impact to our business resulting
from potential costs and obligations related to the early closure of our
stores or termination of our long-term, non-cancellable leases; the
impact of economic, political, and other conditions on us, our
customers, suppliers, vendors, and lenders; 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 efforts to
successfully enhance, upgrade, and/or transition our global information
technology systems and digital commerce platform; the potential impact
to our business resulting from the imposition of additional duties,
tariffs, taxes, and other charges or barriers to trade, including those
resulting from current trade developments with China; a variety of
legal, regulatory, tax, political, and economic risks, including risks
related to the importation and exportation of products which our
operations are currently subject to, or may become subject to as a
result of potential changes in legislation, and other risks associated
with our international operations, such as compliance with the Foreign
Corrupt Practices Act or violations of other anti-bribery and corruption
laws prohibiting improper payments, and the burdens of complying with a
variety of foreign laws and regulations, including tax laws, trade and
labor restrictions, and related laws that may reduce the flexibility of
our business; changes in our tax obligations and effective tax rate due
to a variety of other factors, including potential additional changes in
U.S. or foreign tax laws and regulations, accounting rules, or the mix
and level of earnings by jurisdiction in future periods that are not
currently known or anticipated; the impact to our business resulting
from the United Kingdom's decision to exit the European Union and the
uncertainty surrounding the terms and conditions of such a withdrawal,
as well as the related impact to global stock markets and currency
exchange rates; the impact to our business resulting from increases in
the costs of raw materials, transportation, and labor, including
healthcare-related costs; our exposure to currency exchange rate
fluctuations from both a transactional and translational perspective;
the potential impact to our business resulting from the financial
difficulties of certain of our large wholesale customers, which may
result in consolidations, liquidations, restructurings, and other
ownership changes in the retail industry, as well as other changes in
the competitive marketplace, including the introduction of new products
or pricing changes by our competitors; the potential impact on our
operations and on our suppliers and customers resulting from natural or
man-made disasters; the impact to our business of events of unrest and
instability that are currently taking place in certain parts of the
world, as well as from any terrorist action, retaliation, and the threat
of further action or retaliation; our ability to maintain our credit
profile and ratings within the financial community; our ability to
access sources of liquidity to provide for our cash needs, including our
debt obligations, tax obligations, payment of dividends, capital
expenditures, and potential repurchases of our Class A common stock, as
well as the ability of our customers, suppliers, vendors, and lenders to
access sources of liquidity to provide for their own cash needs; the
potential impact to the trading prices of our securities if our Class A
common stock share repurchase activity and/or cash dividend payments
differ from investors' expectations; our intention to introduce new
products or enter into or renew alliances; changes in the business of,
and our relationships with, major department store customers and
licensing partners; our ability to make certain strategic acquisitions
and successfully integrate the acquired businesses into our existing
operations; and other risk factors identified in the Company's Annual
Report on Form 10-K, Form 10-Q and Form 8-K reports filed with the
Securities and Exchange Commission. The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 29,
|
|
|
March 31,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
680.5
|
|
|
|
$
|
1,304.6
|
|
|
|
$
|
1,175.7
|
|
Short-term investments
|
|
|
|
1,382.5
|
|
|
|
|
699.4
|
|
|
|
|
862.3
|
|
Accounts receivable, net of allowances
|
|
|
|
304.0
|
|
|
|
|
421.4
|
|
|
|
|
295.2
|
|
Inventories
|
|
|
|
914.5
|
|
|
|
|
761.3
|
|
|
|
|
825.4
|
|
Income tax receivable
|
|
|
|
34.4
|
|
|
|
|
38.0
|
|
|
|
|
69.8
|
|
Prepaid expenses and other current assets
|
|
|
|
380.5
|
|
|
|
|
323.7
|
|
|
|
|
304.8
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
3,696.4
|
|
|
|
|
3,548.4
|
|
|
|
|
3,533.2
|
|
|
|
|
|
|
|
|
|
|
|
Non-current investments
|
|
|
|
45.7
|
|
|
|
|
86.2
|
|
|
|
|
83.3
|
|
Property and equipment, net
|
|
|
|
1,079.3
|
|
|
|
|
1,186.3
|
|
|
|
|
1,215.9
|
|
Deferred tax assets
|
|
|
|
76.5
|
|
|
|
|
86.6
|
|
|
|
|
133.1
|
|
Goodwill
|
|
|
|
924.8
|
|
|
|
|
950.5
|
|
|
|
|
935.0
|
|
Intangible assets, net
|
|
|
|
169.5
|
|
|
|
|
188.0
|
|
|
|
|
201.5
|
|
Other non-current assets(a)
|
|
|
|
145.5
|
|
|
|
|
183.5
|
|
|
|
|
180.3
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
6,092.0
|
|
|
|
$
|
6,143.3
|
|
|
|
$
|
6,199.0
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
$
|
-
|
|
|
|
$
|
10.1
|
|
|
|
$
|
-
|
|
Current portion of long-term debt
|
|
|
|
-
|
|
|
|
|
298.1
|
|
|
|
|
298.3
|
|
Accounts payable
|
|
|
|
169.1
|
|
|
|
|
165.6
|
|
|
|
|
184.3
|
|
Income tax payable
|
|
|
|
67.6
|
|
|
|
|
30.0
|
|
|
|
|
138.5
|
|
Accrued expenses and other current liabilities
|
|
|
|
1,037.0
|
|
|
|
|
1,083.4
|
|
|
|
|
1,089.1
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
1,273.7
|
|
|
|
|
1,587.2
|
|
|
|
|
1,710.2
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
686.8
|
|
|
|
|
288.0
|
|
|
|
|
290.3
|
|
Income tax payable
|
|
|
|
152.2
|
|
|
|
|
124.8
|
|
|
|
|
150.8
|
|
Non-current liability for unrecognized tax benefits
|
|
|
|
88.5
|
|
|
|
|
79.2
|
|
|
|
|
76.4
|
|
Other non-current liabilities
|
|
|
|
536.9
|
|
|
|
|
606.7
|
|
|
|
|
563.8
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
2,738.1
|
|
|
|
|
2,685.9
|
|
|
|
|
2,791.5
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
1.3
|
|
|
|
|
1.3
|
|
|
|
|
1.3
|
|
Additional paid-in-capital
|
|
|
|
2,470.5
|
|
|
|
|
2,383.4
|
|
|
|
|
2,365.1
|
|
Retained earnings
|
|
|
|
5,996.3
|
|
|
|
|
5,752.2
|
|
|
|
|
5,751.5
|
|
Treasury stock, Class A, at cost
|
|
|
|
(5,012.9
|
)
|
|
|
|
(4,581.0
|
)
|
|
|
|
(4,579.8
|
)
|
Accumulated other comprehensive loss
|
|
|
|
(101.3
|
)
|
|
|
|
(98.5
|
)
|
|
|
|
(130.6
|
)
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
3,353.9
|
|
|
|
|
3,457.4
|
|
|
|
|
3,407.5
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
$
|
6,092.0
|
|
|
|
$
|
6,143.3
|
|
|
|
$
|
6,199.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash (incl. LT Investments)
|
|
|
|
1,421.9
|
|
|
|
|
1,494.0
|
|
|
|
|
1,532.7
|
|
Cash & Investments (ST & LT)
|
|
|
|
2,108.7
|
|
|
|
|
2,090.2
|
|
|
|
|
2,121.3
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash (excl. LT Investments)
|
|
|
|
1,376.2
|
|
|
|
|
1,407.8
|
|
|
|
|
1,449.4
|
|
Cash & ST Investments
|
|
|
|
2,063.0
|
|
|
|
|
2,004.0
|
|
|
|
|
2,038.0
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes non-current investments of:
|
|
|
$
|
45.7
|
|
|
|
$
|
86.2
|
|
|
|
$
|
83.3
|
|
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 29,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
908.7
|
|
|
|
$
|
886.4
|
|
Europe
|
|
|
|
415.2
|
|
|
|
|
378.5
|
|
Asia
|
|
|
|
274.8
|
|
|
|
|
251.0
|
|
Other non-reportable segments
|
|
|
|
127.1
|
|
|
|
|
125.9
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
1,725.8
|
|
|
|
|
1,641.8
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
(666.3
|
)
|
|
|
|
(645.6
|
)
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
1,059.5
|
|
|
|
|
996.2
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
|
|
(823.4
|
)
|
|
|
|
(779.8
|
)
|
|
|
|
|
|
|
|
Impairment of assets
|
|
|
|
(2.2
|
)
|
|
|
|
(3.9
|
)
|
|
|
|
|
|
|
|
Restructuring and other charges
|
|
|
|
(40.1
|
)
|
|
|
|
(23.3
|
)
|
|
|
|
|
|
|
|
Total other operating expenses, net
|
|
|
|
(865.7
|
)
|
|
|
|
(807.0
|
)
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
193.8
|
|
|
|
|
189.2
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(5.2
|
)
|
|
|
|
(4.8
|
)
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
9.9
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
|
1.0
|
|
|
|
|
(1.4
|
)
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
199.5
|
|
|
|
|
186.3
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
(79.5
|
)
|
|
|
|
(268.1
|
)
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
120.0
|
|
|
|
$
|
(81.8
|
)
|
|
|
|
|
|
|
|
Net income (loss) per common share - Basic
|
|
|
$
|
1.50
|
|
|
|
$
|
(1.00
|
)
|
|
|
|
|
|
|
|
Net income (loss) per common share - Diluted
|
|
|
$
|
1.48
|
|
|
|
$
|
(1.00
|
)
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - Basic
|
|
|
|
80.2
|
|
|
|
|
81.7
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - Diluted
|
|
|
|
81.2
|
|
|
|
|
81.7
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
$
|
0.625
|
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
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 29,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
2,494.5
|
|
|
|
$
|
2,471.7
|
|
Europe
|
|
|
|
1,225.0
|
|
|
|
|
1,165.0
|
|
Asia
|
|
|
|
767.5
|
|
|
|
|
676.9
|
|
Other non-reportable segments
|
|
|
|
320.3
|
|
|
|
|
339.5
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
4,807.3
|
|
|
|
|
4,653.1
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
(1,822.8
|
)
|
|
|
|
(1,809.9
|
)
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
2,984.5
|
|
|
|
|
2,843.2
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
|
|
(2,358.9
|
)
|
|
|
|
(2,266.9
|
)
|
|
|
|
|
|
|
|
Impairment of assets
|
|
|
|
(13.3
|
)
|
|
|
|
(24.8
|
)
|
|
|
|
|
|
|
|
Restructuring and other charges
|
|
|
|
(78.4
|
)
|
|
|
|
(78.7
|
)
|
|
|
|
|
|
|
|
Total other operating expenses, net
|
|
|
|
(2,450.6
|
)
|
|
|
|
(2,370.4
|
)
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
533.9
|
|
|
|
|
472.8
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(15.6
|
)
|
|
|
|
(14.4
|
)
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
29.5
|
|
|
|
|
7.6
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
|
(0.6
|
)
|
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
547.2
|
|
|
|
|
464.3
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
(147.9
|
)
|
|
|
|
(342.8
|
)
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
399.3
|
|
|
|
$
|
121.5
|
|
|
|
|
|
|
|
|
Net income per common share - Basic
|
|
|
$
|
4.92
|
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
Net income per common share - Diluted
|
|
|
$
|
4.85
|
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - Basic
|
|
|
|
81.1
|
|
|
|
|
81.7
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - Diluted
|
|
|
|
82.3
|
|
|
|
|
82.5
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
$
|
1.875
|
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
399.3
|
|
|
|
$
|
121.5
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
212.0
|
|
|
|
|
219.4
|
|
Deferred income tax expense (benefit)
|
|
|
|
13.7
|
|
|
|
|
(8.0
|
)
|
Loss on sale of property
|
|
|
|
11.6
|
|
|
|
|
-
|
|
Non-cash stock-based compensation expense
|
|
|
|
65.3
|
|
|
|
|
56.3
|
|
Non-cash impairment of assets
|
|
|
|
13.3
|
|
|
|
|
24.8
|
|
Non-cash restructuring-related inventory charges
|
|
|
|
3.1
|
|
|
|
|
1.3
|
|
Other non-cash charges
|
|
|
|
7.6
|
|
|
|
|
10.3
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
105.9
|
|
|
|
|
158.9
|
|
Inventories
|
|
|
|
(179.3
|
)
|
|
|
|
(11.6
|
)
|
Prepaid expenses and other current assets
|
|
|
|
(75.7
|
)
|
|
|
|
(4.2
|
)
|
Accounts payable and accrued liabilities
|
|
|
|
24.9
|
|
|
|
|
105.0
|
|
Income tax receivables and payables
|
|
|
|
82.7
|
|
|
|
|
279.7
|
|
Deferred income
|
|
|
|
(10.6
|
)
|
|
|
|
3.8
|
|
Other balance sheet changes
|
|
|
|
9.3
|
|
|
|
|
(6.1
|
)
|
Net cash provided by operating activities
|
|
|
|
683.1
|
|
|
|
|
951.1
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(149.2
|
)
|
|
|
|
(123.0
|
)
|
Purchases of investments
|
|
|
|
(2,627.8
|
)
|
|
|
|
(985.5
|
)
|
Proceeds from sales and maturities of investments
|
|
|
|
1,975.2
|
|
|
|
|
795.3
|
|
Acquisitions and ventures
|
|
|
|
(4.5
|
)
|
|
|
|
(4.6
|
)
|
Proceeds from sale of property
|
|
|
|
20.0
|
|
|
|
|
-
|
|
Settlement of net investment hedges
|
|
|
|
(23.8
|
)
|
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
|
(810.1
|
)
|
|
|
|
(317.8
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Repayments of short-term debt
|
|
|
|
(9.9
|
)
|
|
|
|
-
|
|
Proceeds from the issuance of long-term debt
|
|
|
|
398.1
|
|
|
|
|
-
|
|
Repayments of long-term debt
|
|
|
|
(300.0
|
)
|
|
|
|
-
|
|
Payments of capital lease obligations
|
|
|
|
(14.8
|
)
|
|
|
|
(21.2
|
)
|
Payments of dividends
|
|
|
|
(141.6
|
)
|
|
|
|
(121.7
|
)
|
Repurchases of common stock, including shares surrendered for tax
withholdings
|
|
|
|
(431.9
|
)
|
|
|
|
(15.9
|
)
|
Proceeds from exercise of stock options
|
|
|
|
21.8
|
|
|
|
|
0.1
|
|
Other financing activities
|
|
|
|
(2.8
|
)
|
|
|
|
-
|
|
Net cash used in financing activities
|
|
|
|
(481.1
|
)
|
|
|
|
(158.7
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash
|
|
|
|
(23.9
|
)
|
|
|
|
36.8
|
|
Net increase (decrease) in cash, cash equivalents, and restricted
cash
|
|
|
|
(632.0
|
)
|
|
|
|
511.4
|
|
Cash, cash equivalents, and restricted cash at beginning of period
|
|
|
|
1,355.5
|
|
|
|
|
711.8
|
|
Cash, cash equivalents, and restricted cash at end of period
|
|
|
$
|
723.5
|
|
|
|
$
|
1,223.2
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
OTHER INFORMATION
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues and operating income for the periods ended December 29,
2018 and December 30, 2017 for each segment were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
908.7
|
|
|
|
$
|
886.4
|
|
|
|
$
|
2,494.5
|
|
|
|
$
|
2,471.7
|
|
Europe
|
|
|
|
415.2
|
|
|
|
|
378.5
|
|
|
|
|
1,225.0
|
|
|
|
|
1,165.0
|
|
Asia
|
|
|
|
274.8
|
|
|
|
|
251.0
|
|
|
|
|
767.5
|
|
|
|
|
676.9
|
|
Other non-reportable segments
|
|
|
|
127.1
|
|
|
|
|
125.9
|
|
|
|
|
320.3
|
|
|
|
|
339.5
|
|
Total net revenues
|
|
|
$
|
1,725.8
|
|
|
|
$
|
1,641.8
|
|
|
|
$
|
4,807.3
|
|
|
|
$
|
4,653.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
204.3
|
|
|
|
$
|
196.6
|
|
|
|
$
|
574.0
|
|
|
|
$
|
549.3
|
|
Europe
|
|
|
|
91.4
|
|
|
|
|
81.0
|
|
|
|
|
291.9
|
|
|
|
|
273.6
|
|
Asia
|
|
|
|
47.9
|
|
|
|
|
44.3
|
|
|
|
|
123.3
|
|
|
|
|
101.0
|
|
Other non-reportable segments
|
|
|
|
42.6
|
|
|
|
|
37.1
|
|
|
|
|
97.9
|
|
|
|
|
96.9
|
|
|
|
|
|
386.2
|
|
|
|
|
359.0
|
|
|
|
|
1,087.1
|
|
|
|
|
1,020.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses
|
|
|
|
(152.3
|
)
|
|
|
|
(146.5
|
)
|
|
|
|
(474.8
|
)
|
|
|
|
(469.3
|
)
|
Unallocated restructuring and other charges
|
|
|
|
(40.1
|
)
|
|
|
|
(23.3
|
)
|
|
|
|
(78.4
|
)
|
|
|
|
(78.7
|
)
|
Total operating income
|
|
|
$
|
193.8
|
|
|
|
$
|
189.2
|
|
|
|
$
|
533.9
|
|
|
|
$
|
472.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
Constant Currency Financial Measures
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Store Sales Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
December 29, 2018
% Change
|
|
|
December 29, 2018
% Change
|
|
|
|
|
|
|
|
|
|
Constant Currency
|
|
|
Constant Currency
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital commerce
|
|
|
|
21
|
%
|
|
|
|
11
|
%
|
|
|
|
|
|
|
Excluding Digital commerce
|
|
|
|
-
|
%
|
|
|
|
(1
|
%)
|
|
|
|
|
|
|
Total North America
|
|
|
|
4
|
%
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital commerce
|
|
|
|
13
|
%
|
|
|
|
6
|
%
|
|
|
|
|
|
|
Excluding Digital commerce
|
|
|
|
3
|
%
|
|
|
|
(3
|
%)
|
|
|
|
|
|
|
Total Europe
|
|
|
|
4
|
%
|
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital commerce
|
|
|
|
62
|
%
|
|
|
|
60
|
%
|
|
|
|
|
|
|
Excluding Digital commerce
|
|
|
|
4
|
%
|
|
|
|
5
|
%
|
|
|
|
|
|
|
Total Asia
|
|
|
|
4
|
%
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Ralph Lauren
|
|
|
|
4
|
%
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment Net Revenue Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
% Change
|
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
As Reported
|
|
|
Constant Currency
|
North America
|
|
|
$
|
908.7
|
|
|
|
$
|
886.4
|
|
|
|
2.5
|
%
|
|
|
2.6
|
%
|
Europe
|
|
|
|
415.2
|
|
|
|
|
378.5
|
|
|
|
9.7
|
%
|
|
|
13.3
|
%
|
Asia
|
|
|
|
274.8
|
|
|
|
|
251.0
|
|
|
|
9.5
|
%
|
|
|
11.4
|
%
|
Other non-reportable segments
|
|
|
|
127.1
|
|
|
|
|
125.9
|
|
|
|
0.9
|
%
|
|
|
1.0
|
%
|
Net revenues
|
|
|
$
|
1,725.8
|
|
|
|
$
|
1,641.8
|
|
|
|
5.1
|
%
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
% Change
|
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
As Reported
|
|
|
Constant Currency
|
North America
|
|
|
$
|
2,494.5
|
|
|
|
$
|
2,471.7
|
|
|
|
0.9
|
%
|
|
|
1.0
|
%
|
Europe
|
|
|
|
1,225.0
|
|
|
|
|
1,165.0
|
|
|
|
5.2
|
%
|
|
|
4.8
|
%
|
Asia
|
|
|
|
767.5
|
|
|
|
|
676.9
|
|
|
|
13.4
|
%
|
|
|
13.7
|
%
|
Other non-reportable segments
|
|
|
|
320.3
|
|
|
|
|
339.5
|
|
|
|
(5.7
|
%)
|
|
|
(5.7
|
%)
|
Net revenues
|
|
|
$
|
4,807.3
|
|
|
|
$
|
4,653.1
|
|
|
|
3.3
|
%
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
Revenue by Sales Channel
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
North
America
|
|
|
Europe
|
|
|
Asia
|
|
|
Other
|
|
|
Total
|
|
|
North
America
|
|
|
Europe
|
|
|
Asia
|
|
|
Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
|
$
|
365.5
|
|
|
$
|
166.5
|
|
|
$
|
13.4
|
|
|
$
|
11.1
|
|
|
$
|
556.5
|
|
|
$
|
377.1
|
|
|
$
|
143.7
|
|
|
$
|
13.6
|
|
|
$
|
8.4
|
|
|
$
|
542.8
|
Retail
|
|
|
|
543.2
|
|
|
|
248.7
|
|
|
|
261.4
|
|
|
|
68.3
|
|
|
|
1,121.6
|
|
|
|
509.3
|
|
|
|
234.8
|
|
|
|
237.4
|
|
|
|
73.2
|
|
|
|
1,054.7
|
Licensing
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
47.7
|
|
|
|
47.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
44.3
|
|
|
|
44.3
|
Total net revenues
|
|
|
$
|
908.7
|
|
|
$
|
415.2
|
|
|
$
|
274.8
|
|
|
$
|
127.1
|
|
|
$
|
1,725.8
|
|
|
$
|
886.4
|
|
|
$
|
378.5
|
|
|
$
|
251.0
|
|
|
$
|
125.9
|
|
|
$
|
1,641.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
North
America
|
|
|
Europe
|
|
|
Asia
|
|
|
Other
|
|
|
Total
|
|
|
North
America
|
|
|
Europe
|
|
|
Asia
|
|
|
Other
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Channel:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
|
$
|
1,128.4
|
|
|
$
|
536.1
|
|
|
$
|
48.2
|
|
|
$
|
23.6
|
|
|
$
|
1,736.3
|
|
|
$
|
1,141.7
|
|
|
$
|
492.8
|
|
|
$
|
39.4
|
|
|
$
|
21.7
|
|
|
$
|
1,695.6
|
Retail
|
|
|
|
1,366.1
|
|
|
|
688.9
|
|
|
|
719.3
|
|
|
|
165.6
|
|
|
|
2,939.9
|
|
|
|
1,330.0
|
|
|
|
672.2
|
|
|
|
637.5
|
|
|
|
184.8
|
|
|
|
2,824.5
|
Licensing
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
131.1
|
|
|
|
131.1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
133.0
|
|
|
|
133.0
|
Total net revenues
|
|
|
$
|
2,494.5
|
|
|
$
|
1,225.0
|
|
|
$
|
767.5
|
|
|
$
|
320.3
|
|
|
$
|
4,807.3
|
|
|
$
|
2,471.7
|
|
|
$
|
1,165.0
|
|
|
$
|
676.9
|
|
|
$
|
339.5
|
|
|
$
|
4,653.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
Global Retail Store Network
|
|
|
|
|
|
|
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
Ralph Lauren Stores
|
|
|
42
|
|
|
44
|
Polo Factory Stores
|
|
|
185
|
|
|
174
|
Total Directly Operated Stores
|
|
|
227
|
|
|
218
|
Concessions
|
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
Ralph Lauren Stores
|
|
|
23
|
|
|
20
|
Polo Factory Stores
|
|
|
64
|
|
|
62
|
Total Directly Operated Stores
|
|
|
87
|
|
|
82
|
Concessions
|
|
|
25
|
|
|
25
|
|
|
|
|
|
|
|
Asia
|
|
|
|
|
|
|
Ralph Lauren Stores
|
|
|
55
|
|
|
49
|
Polo Factory Stores
|
|
|
56
|
|
|
54
|
Total Directly Operated Stores
|
|
|
111
|
|
|
103
|
Concessions
|
|
|
619
|
|
|
599
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Club Monaco Stores
|
|
|
76
|
|
|
78
|
Club Monaco Concessions
|
|
|
5
|
|
|
2
|
|
|
|
|
|
|
|
Global Directly Operated Stores and
Concessions
|
|
|
|
|
|
|
Ralph Lauren Stores
|
|
|
120
|
|
|
113
|
Polo Factory Stores
|
|
|
305
|
|
|
290
|
Club Monaco Stores
|
|
|
76
|
|
|
78
|
Total Directly Operated Stores
|
|
|
501
|
|
|
481
|
Concessions
|
|
|
651
|
|
|
628
|
|
|
|
|
|
|
|
Global Licensed Stores and Concessions
|
|
|
|
|
|
|
Ralph Lauren Licensed Stores
|
|
|
101
|
|
|
87
|
Club Monaco Licensed Stores
|
|
|
59
|
|
|
62
|
Total Licensed Stores
|
|
|
160
|
|
|
149
|
Licensed Concessions
|
|
|
111
|
|
|
122
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
Reconciliation of Certain Non-U.S. GAAP Financial Measures
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
Total
Adjustments(a)(b)
|
|
|
As
Adjusted
|
Net revenues
|
|
|
$
|
1,725.8
|
|
|
|
$
|
-
|
|
|
$
|
1,725.8
|
|
Gross profit
|
|
|
|
1,059.5
|
|
|
|
|
3.1
|
|
|
|
1,062.6
|
|
|
Gross profit margin
|
|
|
|
61.4
|
%
|
|
|
|
|
|
|
61.6
|
%
|
Total other operating expenses, net
|
|
|
|
(865.7
|
)
|
|
|
|
42.3
|
|
|
|
(823.4
|
)
|
|
Operating expense margin
|
|
|
|
50.2
|
%
|
|
|
|
|
|
|
47.7
|
%
|
Operating income
|
|
|
|
193.8
|
|
|
|
|
45.4
|
|
|
|
239.2
|
|
|
Operating margin
|
|
|
|
11.2
|
%
|
|
|
|
|
|
|
13.9
|
%
|
Income before income taxes
|
|
|
|
199.5
|
|
|
|
|
45.4
|
|
|
|
244.9
|
|
Income tax provision
|
|
|
|
(79.5
|
)
|
|
|
|
22.6
|
|
|
|
(56.9
|
)
|
|
Effective tax rate
|
|
|
|
39.8
|
%
|
|
|
|
|
|
|
23.2
|
%
|
Net income
|
|
|
$
|
120.0
|
|
|
|
$
|
68.0
|
|
|
$
|
188.0
|
|
Net income per diluted common share
|
|
|
$
|
1.48
|
|
|
|
|
|
|
$
|
2.32
|
|
Weighted average common shares outstanding - Diluted
|
|
|
|
81.2
|
|
|
|
|
|
|
|
81.2
|
|
SEGMENT INFORMATION -
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
204.3
|
|
|
|
$
|
1.1
|
|
|
$
|
205.4
|
|
|
Operating margin
|
|
|
|
22.5
|
%
|
|
|
|
|
|
|
22.6
|
%
|
Europe
|
|
|
|
91.4
|
|
|
|
|
1.6
|
|
|
|
93.0
|
|
|
Operating margin
|
|
|
|
22.0
|
%
|
|
|
|
|
|
|
22.4
|
%
|
Asia
|
|
|
|
|
47.9
|
|
|
|
|
-
|
|
|
|
47.9
|
|
|
Operating margin
|
|
|
|
17.4
|
%
|
|
|
|
|
|
|
17.4
|
%
|
Other non-reportable segments
|
|
|
|
42.6
|
|
|
|
|
2.3
|
|
|
|
44.9
|
|
|
Operating margin
|
|
|
|
33.5
|
%
|
|
|
|
|
|
|
35.4
|
%
|
Unallocated corporate expenses and restructuring and other charges
|
|
|
|
(192.4
|
)
|
|
|
|
40.4
|
|
|
|
(152.0
|
)
|
Total operating income
|
|
|
$
|
193.8
|
|
|
|
$
|
45.4
|
|
|
$
|
239.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
December 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
Total
Adjustments(a)(c)
|
|
|
As
Adjusted
|
Net revenues
|
|
|
$
|
4,807.3
|
|
|
|
$
|
-
|
|
|
$
|
4,807.3
|
|
Gross profit
|
|
|
|
2,984.5
|
|
|
|
|
3.1
|
|
|
|
2,987.6
|
|
|
Gross profit margin
|
|
|
|
62.1
|
%
|
|
|
|
|
|
|
62.1
|
%
|
Total other operating expenses, net
|
|
|
|
(2,450.6
|
)
|
|
|
|
91.7
|
|
|
|
(2,358.9
|
)
|
|
Operating expense margin
|
|
|
|
51.0
|
%
|
|
|
|
|
|
|
49.1
|
%
|
Operating income
|
|
|
|
533.9
|
|
|
|
|
94.8
|
|
|
|
628.7
|
|
|
Operating margin
|
|
|
|
11.1
|
%
|
|
|
|
|
|
|
13.1
|
%
|
Income before income taxes
|
|
|
|
547.2
|
|
|
|
|
94.8
|
|
|
|
642.0
|
|
Income tax provision
|
|
|
|
(147.9
|
)
|
|
|
|
8.0
|
|
|
|
(139.9
|
)
|
|
Effective tax rate
|
|
|
|
27.0
|
%
|
|
|
|
|
|
|
21.8
|
%
|
Net income
|
|
|
$
|
399.3
|
|
|
|
$
|
102.8
|
|
|
$
|
502.1
|
|
Net income per diluted common share
|
|
|
$
|
4.85
|
|
|
|
|
|
|
$
|
6.10
|
|
Weighted average common shares outstanding - Diluted
|
|
|
|
82.3
|
|
|
|
|
|
|
|
82.3
|
|
SEGMENT INFORMATION -
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
574.0
|
|
|
|
$
|
1.4
|
|
|
$
|
575.4
|
|
|
Operating margin
|
|
|
|
23.0
|
%
|
|
|
|
|
|
|
23.1
|
%
|
Europe
|
|
|
|
291.9
|
|
|
|
|
1.8
|
|
|
|
293.7
|
|
|
Operating margin
|
|
|
|
23.8
|
%
|
|
|
|
|
|
|
24.0
|
%
|
Asia
|
|
|
|
|
123.3
|
|
|
|
|
3.7
|
|
|
|
127.0
|
|
|
Operating margin
|
|
|
|
16.1
|
%
|
|
|
|
|
|
|
16.5
|
%
|
Other non-reportable segments
|
|
|
|
97.9
|
|
|
|
|
8.9
|
|
|
|
106.8
|
|
|
Operating margin
|
|
|
|
30.6
|
%
|
|
|
|
|
|
|
33.4
|
%
|
Unallocated corporate expenses and restructuring and other charges
|
|
|
|
(553.2
|
)
|
|
|
|
79.0
|
|
|
|
(474.2
|
)
|
Total operating income
|
|
|
$
|
533.9
|
|
|
|
$
|
94.8
|
|
|
$
|
628.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
Reconciliation of Certain Non-U.S. GAAP Financial Measures
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
Total
Adjustments(a)(d)
|
|
|
As
Adjusted
|
Net revenues
|
|
|
$
|
1,641.8
|
|
|
|
$
|
-
|
|
|
$
|
1,641.8
|
|
Gross profit
|
|
|
|
996.2
|
|
|
|
|
-
|
|
|
|
996.2
|
|
|
Gross profit margin
|
|
|
|
60.7
|
%
|
|
|
|
|
|
|
60.7
|
%
|
Total other operating expenses, net
|
|
|
|
(807.0
|
)
|
|
|
|
27.2
|
|
|
|
(779.8
|
)
|
|
Operating expense margin
|
|
|
|
49.2
|
%
|
|
|
|
|
|
|
47.5
|
%
|
Operating income
|
|
|
|
189.2
|
|
|
|
|
27.2
|
|
|
|
216.4
|
|
|
Operating margin
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
13.2
|
%
|
Income before income taxes
|
|
|
|
186.3
|
|
|
|
|
27.2
|
|
|
|
213.5
|
|
Income tax provision
|
|
|
|
(268.1
|
)
|
|
|
|
222.0
|
|
|
|
(46.1
|
)
|
|
Effective tax rate
|
|
|
|
143.9
|
%
|
|
|
|
|
|
|
21.6
|
%
|
Net income (loss)
|
|
|
$
|
(81.8
|
)
|
|
|
$
|
249.2
|
|
|
$
|
167.4
|
|
Net income (loss) per diluted common share
|
|
|
$
|
(1.00
|
)
|
|
|
|
|
|
$
|
2.03
|
|
Weighted average common shares outstanding - Diluted
|
|
|
|
81.7
|
|
|
|
|
|
|
|
82.6
|
|
SEGMENT INFORMATION -
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
196.6
|
|
|
|
$
|
1.7
|
|
|
$
|
198.3
|
|
|
Operating margin
|
|
|
|
22.2
|
%
|
|
|
|
|
|
|
22.4
|
%
|
Europe
|
|
|
|
81.0
|
|
|
|
|
-
|
|
|
|
81.0
|
|
|
Operating margin
|
|
|
|
21.4
|
%
|
|
|
|
|
|
|
21.4
|
%
|
Asia
|
|
|
|
|
44.3
|
|
|
|
|
0.2
|
|
|
|
44.5
|
|
|
Operating margin
|
|
|
|
17.6
|
%
|
|
|
|
|
|
|
17.7
|
%
|
Other non-reportable segments
|
|
|
|
37.1
|
|
|
|
|
0.1
|
|
|
|
37.2
|
|
|
Operating margin
|
|
|
|
29.5
|
%
|
|
|
|
|
|
|
29.6
|
%
|
Unallocated corporate expenses and restructuring and other charges
|
|
|
|
(169.8
|
)
|
|
|
|
25.2
|
|
|
|
(144.6
|
)
|
Total operating income
|
|
|
$
|
189.2
|
|
|
|
$
|
27.2
|
|
|
$
|
216.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
December 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
Total
Adjustments(a)(e)
|
|
|
As
Adjusted
|
Net revenues
|
|
|
$
|
4,653.1
|
|
|
|
$
|
-
|
|
|
$
|
4,653.1
|
|
Gross profit
|
|
|
|
2,843.2
|
|
|
|
|
1.3
|
|
|
|
2,844.5
|
|
|
Gross profit margin
|
|
|
|
61.1
|
%
|
|
|
|
|
|
|
61.1
|
%
|
Total other operating expenses, net
|
|
|
|
(2,370.4
|
)
|
|
|
|
103.5
|
|
|
|
(2,266.9
|
)
|
|
Operating expense margin
|
|
|
|
50.9
|
%
|
|
|
|
|
|
|
48.7
|
%
|
Operating income
|
|
|
|
472.8
|
|
|
|
|
104.8
|
|
|
|
577.6
|
|
|
Operating margin
|
|
|
|
10.2
|
%
|
|
|
|
|
|
|
12.4
|
%
|
Income before income taxes
|
|
|
|
464.3
|
|
|
|
|
104.8
|
|
|
|
569.1
|
|
Income tax provision
|
|
|
|
(342.8
|
)
|
|
|
|
196.3
|
|
|
|
(146.5
|
)
|
|
Effective tax rate
|
|
|
|
73.8
|
%
|
|
|
|
|
|
|
25.7
|
%
|
Net income
|
|
|
$
|
121.5
|
|
|
|
$
|
301.1
|
|
|
$
|
422.6
|
|
Net income per diluted common share
|
|
|
$
|
1.47
|
|
|
|
|
|
|
$
|
5.12
|
|
Weighted average common shares outstanding - Diluted
|
|
|
|
82.5
|
|
|
|
|
|
|
|
82.5
|
|
SEGMENT INFORMATION -
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
549.3
|
|
|
|
$
|
3.4
|
|
|
$
|
552.7
|
|
|
Operating margin
|
|
|
|
22.2
|
%
|
|
|
|
|
|
|
22.4
|
%
|
Europe
|
|
|
|
273.6
|
|
|
|
|
1.3
|
|
|
|
274.9
|
|
|
Operating margin
|
|
|
|
23.5
|
%
|
|
|
|
|
|
|
23.6
|
%
|
Asia
|
|
|
|
|
101.0
|
|
|
|
|
1.1
|
|
|
|
102.1
|
|
|
Operating margin
|
|
|
|
14.9
|
%
|
|
|
|
|
|
|
15.1
|
%
|
Other non-reportable segments
|
|
|
|
96.9
|
|
|
|
|
9.1
|
|
|
|
106.0
|
|
|
Operating margin
|
|
|
|
28.6
|
%
|
|
|
|
|
|
|
31.2
|
%
|
Unallocated corporate expenses and restructuring and other charges
|
|
|
|
(548.0
|
)
|
|
|
|
89.9
|
|
|
|
(458.1
|
)
|
Total operating income
|
|
|
$
|
472.8
|
|
|
|
$
|
104.8
|
|
|
$
|
577.6
|
|
|
RALPH LAUREN CORPORATION
|
|
Footnotes to Non-U.S. GAAP Financial Measures
|
|
|
|
|
|
(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 enactment-related charges recorded in connection
with U.S. tax reform and other income tax-related adjustments are
recorded within the income tax provision in the consolidated
statement of operations. Adjustments for all other charges are
recorded within restructuring and other charges in the consolidated
statements of operations.
|
|
|
|
|
|
(b)
|
|
Adjustments for the three months ended December 29, 2018 include (i)
charges of $41.4 million recorded in connection with the Company's
restructuring plans, consisting of restructuring charges, impairment
of assets, inventory-related charges, and a loss on sale of
property; (ii) additional impairment of assets of $0.5 million
related to underperforming stores as a result of on-going store
portfolio evaluation; and (iii) other charges of $3.5 million
related to depreciation expense associated with the Company's former
Polo store at 711 Fifth Avenue in New York City. The income tax
provision reflects enactment-related charges of $32.3 million
recorded in connection with U.S. tax reform.
|
|
|
|
|
|
(c)
|
|
Adjustments for the nine months ended December 29, 2018 include (i)
charges of $74.3 million recorded in connection with the Company's
restructuring plans, consisting of restructuring charges, impairment
of assets, inventory-related charges, and a loss on sale of
property; (ii) additional impairment of assets of $5.8 million
related to underperforming stores as a result of on-going store
portfolio evaluation; and (iii) other charges of $14.7 million
primarily related to depreciation expense associated with the
Company's former Polo store at 711 Fifth Avenue in New York City and
its customs audit. The income tax provision reflects
enactment-related charges of $27.6 million recorded in connection
with U.S. tax reform.
|
|
|
|
|
|
(d)
|
|
Adjustments for the three months ended December 30, 2017 include (i)
charges of $22.0 million recorded in connection with the Way Forward
Plan, consisting of restructuring charges, impairment of assets, and
accelerated stock-based compensation expense; (ii) additional
impairment of assets of $1.7 million related to underperforming
stores as a result of on-going store portfolio evaluation; and (iii)
other charges of $3.5 million related to depreciation expense
associated with the Company's former Polo store at 711 Fifth Avenue
in New York City. The income tax provision reflects
enactment-related charges of $231.3 million recorded in connection
with U.S. tax reform.
|
|
|
|
|
|
(e)
|
|
Adjustments for the nine months ended December 30, 2017 include (i)
charges of $79.0 million recorded in connection with the Way Forward
plan, consisting of restructuring charges, impairment of assets,
inventory-related charges, and accelerated stock-based compensation
expense; (ii) additional impairment of assets of $10.8 million
related to underperforming stores as a result of on-going store
portfolio evaluation; and (iii) net other charges of $15.0 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. The
income tax provision reflects enactment-related charges of $231.3
million recorded in connection with U.S. tax reform.
|
NON-U.S. GAAP FINANCIAL MEASURES
Since Ralph Lauren Corporation is a global company, the comparability of
its operating results reported in U.S. Dollars is affected by foreign
currency exchange rate fluctuations because the underlying currencies in
which it transacts change in value over time compared to the U.S.
Dollar. These rate fluctuations can have a significant effect on the
Company’s reported results. As such, in addition to financial measures
prepared in accordance with accounting principles generally accepted in
the U.S. ("U.S. GAAP"), the Company’s discussions often contain
references to constant currency measures, which are calculated by
translating the current-year and prior-year reported amounts into
comparable amounts using a single foreign exchange rate for each
currency. The Company presents constant currency financial information,
which is a non-U.S. GAAP financial measure, as a supplement to its
reported operating results. The Company uses constant currency
information to provide a framework for assessing how its businesses
performed excluding the effects of foreign currency exchange rate
fluctuations. Management believes this information is useful to
investors for facilitating comparisons of operating results and better
identifying trends in the Company’s businesses. The constant currency
performance measures should be viewed in addition to, and not in lieu of
or superior to, the Company’s operating performance measures calculated
in accordance with U.S. GAAP.
This earnings release also includes certain other non-U.S. GAAP
financial measures relating to the impact of charges and other items as
described herein. The Company uses non-U.S. GAAP financial measures,
among other things, to evaluate its operating performance and to better
represent the manner in which it 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. While the Company considers 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.
Adjustments made during the fiscal periods presented include charges
recorded in connection with the Company’s restructuring plans, as well
as depreciation expense associated with the Company’s former Polo store
at 711 Fifth Avenue in New York City recorded after the store closed
during the first quarter of Fiscal 2018 in connection with the Way
Forward plan. Although the Company is no longer generating revenue or
has any other economic activity associated with its former Polo store,
it continues to incur depreciation expense due to its involvement at the
time of construction. Adjustments also include certain other charges
associated with other non-recurring events, as described in the
footnotes to the non-U.S. GAAP financial measures above. The income tax
provision has been adjusted for the tax-related effects of these
charges, which were calculated using the respective statutory tax rates
for each applicable jurisdiction, as well as enactment-related charges
recorded in connection with U.S. tax reform, commonly referred to as the
Tax Cuts and Jobs Act. Included in this earnings release are
reconciliations between the non-U.S. GAAP financial measures and the
most directly comparable U.S. GAAP measures before and after these
adjustments.
Additionally, the Company’s full year Fiscal 2019 and fourth quarter
Fiscal 2019 guidance excludes certain anticipated restructuring-related
and other charges. The Company is not able to provide a full
reconciliation of these non-U.S. GAAP financial measures to U.S. GAAP
because certain material items that impact these measures, such as the
timing and exact amount of charges related to our restructuring plans,
have not yet occurred or are out of the Company’s control. Accordingly,
a reconciliation of our non-U.S. GAAP based financial measure guidance
to the most directly comparable U.S. GAAP measures is not available
without unreasonable effort. However, the Company has identified the
estimated impact of certain items excluded from its financial outlook.
Specifically, the Company’s financial outlook excludes estimated
remaining pretax charges of approximately $105 million related to its
Way Forward Plan and approximately $40 million to $90 million related to
its Fiscal 2019 Restructuring Plan.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190205005234/en/
Source: Ralph Lauren Corporation
Investor Relations: Corinna Van der Ghinst, 212-813-7868 Or Corporate
Communications: rl-press@ralphlauren.com
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