| Ralph Lauren Presents Its Strategic Growth Plan, “Writing Our Next Great Chapter” and Long Term Financial Outlook |
As part of its strategic plan, the Company intends to execute on the following five strategic priorities:
“As we reflect on 50 years, I am so energized by the work we are doing
to build the future for our Company and iconic brand,” said
“We are confident that with our clear strategic plan in place, we can
return Long-Term Financial Outlook
The Company is reiterating its Fiscal 2019 guidance that was recently
provided on its earnings call on Over the next five years, from Fiscal 2018 to Fiscal 2023, the Company expects revenue to grow at a compounded annual growth rate of low to mid-single digits in constant currency. In addition, the Company is targeting a return to revenue growth in Fiscal 2020 in constant currency. Operating margin is expected to expand to mid-teens by Fiscal 2023, in constant currency. In addition, marketing spend is expected to grow to approximately 5% of revenue by Fiscal 2023. In addition, capital expenditures are expected to represent 4-5% of revenue by Fiscal 2023. Dividend Increase and Share Repurchase Authorization
The Company’s Board of Directors declared a 25% increase in the regular
quarterly cash dividend on the Company's Common Stock. The new quarterly
cash dividend is
In addition, the Company's Board of Directors authorized an additional
The Company plans to return 100% of free cash flow to shareholders over
the next five years, returning over Fiscal 2019 Restructuring Activities
The Company’s Board of Directors approved a restructuring plan
associated with the Company’s strategic objective of operating with
discipline to drive sustainable long-term growth (the “Fiscal 2019
Restructuring Plan”). The Company expects to incur restructuring charges
of
These charges are expected to be substantially recognized by the end of
Fiscal 2019 and are in addition to the
The Company expects its Fiscal 2019 Restructuring Plan activities to
result in approximately New Addition to the Board of Directors
In addition to the recent announcement that Change in Definition of Comparable Store Sales Effective beginning the first quarter of Fiscal 2019, the Company changed its definition of comparable store sales to reflect the change in sales of the Company’s stores that have been open for at least 13 full fiscal months. This aligns with general retail industry practice and provides a more relevant measure of performance.
More details regarding the matters set forth in this press release can
be found in our Form 8-K filed this morning with the Investor Day Webcast
Today’s investor meeting will be webcast live on the Company’s investor
relations website at http://investor.ralphlauren.com
from approximately
The Company will present its strategic growth plan, and several members
of management will speak including:
ABOUT
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release and oral statements made from time to time by
representatives of the Company (including without limitation, as part of
the Investor Day presentation) contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include the statements
under “Long-Term Financial Outlook,” statements describing our “Writing
Our Next Great Chapter” 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, expense savings, earnings, dividends,
share repurchases and total shareholder return, 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; a variety of legal, regulatory, tax, political, and
economic risks, including risks related to the importation and
exportation of products, tariffs, and other trade barriers 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 recently enacted U.S. tax legislation commonly referred to as
the Tax Cuts and Jobs Act, including related changes to our tax
obligations and effective tax rate in future periods, as well as the
enactment-related charges that were recorded during Fiscal 2018 on a
provisional basis based on a reasonable estimate and are subject to
change, all of which could differ materially from our current
expectations and/or investors' expectations; the impact to our business
resulting from the SUPPLEMENTAL FINANCIAL INFORMATION
Since In addition, the Company’s long-term financial outlook excludes restructuring-related and other one-time charges. 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. 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.
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 restructuring plans, 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 long-term financial
outlook. Specifically, the Company’s long-term financial outlook
excludes estimated pretax charges of approximately
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Ralph Lauren Corporation |