Ralph Lauren Corporation Presents “Way Forward” Plan and Financial Outlook
As part of the Way Forward Plan, the Company will refocus on the core of
what has made
“We have assessed every value-creating component of the Company and,
with our Way Forward Plan, we will build on our strengths, refocusing on
our core brands and instilling a financial discipline that is highly
focused on return on investment,” said
Fiscal 2017 Restructuring Activities
The Company expects its Fiscal 2017 restructuring activities to result
in approximately
The Company expects to incur restructuring charges of up to
First Quarter and Full Year Fiscal 2017 Outlook
In the first quarter of Fiscal 2017, the Company expects consolidated net revenues to decline at a mid-single digit rate. Operating margin for the first quarter of Fiscal 2017 is expected to be approximately 110-160 basis points below the comparable prior year period. The first quarter tax rate is estimated to be approximately 29%.
The Company currently expects consolidated net revenues for Fiscal 2017
to decrease at a low-double digit rate due to a proactive pullback in
inventory receipts, store closures, pricing harmonization and other
quality of sale initiatives, combined with the weak retail traffic
environment in the U.S. Operating margin for Fiscal 2017 is currently
anticipated to be approximately 10%, as cost savings are expected to be
offset by growth in new store expenses, unfavorable foreign currency
impacts, infrastructure investments and fixed expense deleveraging. The
Fiscal 2017 tax rate is estimated to be approximately 29%. Capital
expenditures are expected to be approximately
Q1 2017 and Fiscal 2017 guidance excludes the restructuring and inventory charges associated with the Fiscal 2017 restructuring activities.
Long-Term Financial Outlook
As a result of its Way Forward Plan, the Company expects to stabilize performance in Fiscal 2018 and pivot to growth off of a smaller, more profitable base in Fiscal 2019, with improving operating margins in both fiscal years.
In Fiscal 2020, the Company is targeting market share growth and a mid-teens operating margin.
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
ABOUT
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release and oral statements made from time to time by
representatives of the Company contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include the statements
under “First Quarter and Full Year Fiscal 2017 Outlook” and “Long-Term
Financial Outlook,” and statements regarding, among other things, our
current expectations about the Company's “Way Forward Plan,” future
results and financial condition, revenues, store openings and closings,
employee reductions, margins, expenses, timing of actions, anticipated
savings, and earnings and are indicated by words or phrases such as
"anticipate," "estimate," "expect," "project," "we believe" and similar
words or phrases. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause actual
results, performance or achievements to be materially different from the
future results, performance or achievements expressed in or implied by
such forward-looking statements. Forward-looking statements are based
largely on the Company's expectations and judgments and are subject to a
number of risks and uncertainties, many of which are unforeseeable and
beyond our control. The factors that could cause actual results to
materially differ include, among others: the loss of key personnel 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 achieve anticipated
operating enhancements and/or cost reductions from our restructuring
plans, which could include the potential sale, discontinuance, or
consolidation of certain of our brands; our ability to successfully
implement our anticipated growth strategies and to capitalize on our
repositioning initiatives in certain brands, regions and merchandise
categories; our ability to secure the technology facilities and systems
used by the Company and those of third party service providers from,
among other things, cybersecurity breaches, acts of vandalism, computer
viruses or similar events; our exposure to currency exchange rate
fluctuations from both a transactional and translational perspective,
and risks associated with increases in the costs of raw materials,
transportation, and labor; our ability to continue to maintain our brand
image and reputation and protect our trademarks; the impact of the
volatile state of the global economy, stock markets, and other economic
conditions on us, our customers, our suppliers, and our vendors, and our
ability and their ability to access sources of liquidity; the impact of
changes in consumers’ ability or preferences to purchase premium
lifestyle products that we sell and our ability to forecast consumer
demand; changes in the competitive marketplace, including the
introduction of new products or pricing changes by our competitors, and
consolidations, liquidations, restructurings, and other ownership
changes in the retail industry; risks associated with our international
operations, including risks related to the importation and exportation
of products, and risks associated with 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; the impact
to our business of events of unrest and instability that are currently
taking place in certain parts of the world; our ability to continue to
expand our business internationally; changes in our effective tax rates
or credit profile and ratings within the financial community; changes in
the business of, and our relationships with, major department store
customers and licensing partners; our efforts to improve the efficiency
of our distribution system and enhance our information technology
systems and global e-commerce platform; our intention to introduce new
products or enter into or renew alliances and exclusive relationships;
our ability to access sources of liquidity to provide for our cash
needs, including our debt obligations, payment of dividends, capital
expenditures, and potential repurchases of our Class A common stock; our
ability to open new retail stores, concession shops, and e-commerce
sites in an effort to expand our direct-to-consumer presence; our
ability to make certain strategic acquisitions and successfully
integrate the acquired businesses into our existing operations; the
impact to our business resulting from potential costs and obligations
related to the early termination of our long term, non-cancellable
leases; the potential impact to the trading prices of our securities if
our Class A Common Stock share repurchase activity and/or cash dividend
rate differs from investors' expectations; our ability to maintain our
credit profile and ratings within the financial community; the potential
impact on our operations and on our customers resulting from natural or
man-made disasters; 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
View source version on businesswire.com: http://www.businesswire.com/news/home/20160607005612/en/
Source:
Ralph Lauren Corporation
Investor Relations:
Evren Kopelman,
212-813-7862
or
Corporate Communications:
Ryan Lally,
212-318-7116
