Ralph Lauren Reports First Quarter Fiscal 2021 Results
- Strengthened Balance Sheet and Liquidity with Over
$2.7 Billion in Cash & Investments and Continued Expense Reduction Actions - First Quarter Revenues Were
$487 Million Reflecting Adverse Impact from COVID-19 Ralph Lauren Digital Comp Sales Accelerated to 13% Growth, with Digital Operating Margin Expanding More than1,000 Basis Points to Last Year- First Quarter Average Unit Retail Increased 25% driven by Geographic and Retail Channel Mix Shifts and Ongoing Brand Elevation and Quality of Sale Initiatives; Underlying AUR Up High-Single-Digits
"We are living through an incredible period of change -- whether related to the devastating spread of COVID-19 around the world or the call to systemically address racial injustice," said
"The past few months have marked a period of extraordinary challenge, but also agility and resilience," said
COVID-19 Update
From the onset of the global COVID-19 pandemic, our priority has been to ensure the safety and well-being of our employees, consumers and the communities in which we operate around the world. We continue to follow the guidance of local governments and global health organizations as we safely return our businesses to growth. Additional actions taken in the first quarter include:
- Store Reopenings. Currently, nearly all of our physical owned stores have reopened across
North America ,Europe , andAsia . Following reopening, our stores continued to operate at limited hours and consumer capacity, in accordance with local health guidelines. During the first quarter, the majority of stores in our key markets were closed for an average of 8-10 weeks, resulting in significant adverse impact to our traffic and revenues. - Online Operations. Our global digital flagship businesses continued to operate during the first quarter. As consumers increasingly embrace omni-channel retailing, we are bolstering our connected retailing capabilities including digital clienteling, Buy Online Ship From Store, Buy Online Pick Up From Store, curbside pickup, and other initiatives to facilitate and enhance the consumer experience.
New Health and Safety Protocols. We continue to take careful precautions across all of our facilities, including stringent health and safety protocols in our stores, offices, and distribution centers to protect both our employees and consumers.- Cost-Reducing Actions. Key cost reduction actions taken in the first quarter included: reductions in executive compensation and temporary employee furloughs; negotiated rent abatements and lower variable rent expense due to COVID-19-related closures; and reduced corporate and selling expenses. Our Board of Directors also agreed to forgo their quarterly cash compensation for the first quarter of Fiscal 2021.
- Balance Sheet and New Debt Issuance. In addition to a robust balance sheet going into the pandemic, we have taken further preemptive actions to preserve cash and strengthen liquidity while navigating the evolving global pandemic. On
June 3, 2020 , we completed the issuance of$500 million of 1.700% 2-year notes and$750 million of 2.950% 10-year notes. A portion of the net proceeds were used to pay down the$475 million outstanding on our Global Credit Facility, and we plan to use the remainder for general corporate purposes, including the repayment of$300 million of 2.625% 5-year notes dueAugust 18, 2020 .
Key Achievements in First Quarter Fiscal 2021
As we continued to navigate the evolving global pandemic, we delivered the following highlights across our strategic priorities in the first quarter of Fiscal 2021:
Win Over a New Generation of Consumers- Drove strong consumer engagement and conversion through campaigns including our signature Pride campaign and capsule, RL @ Home program, exclusive capsules with Zalando and Asos, and our "Polo Shirt: Design For Good" competition on the Polo app
- Our teams pivoted marketing investments away from in-store activations and major sporting events and toward values-based, digital brand-building activities during store closures. More selective marketing through the pandemic and timing shifts drove our first quarter marketing spend down 34% to last year
- Energize Core Products and Accelerate Under-Developed Categories
- Continued to drive AUR and brand elevation journey across every region, despite significant revenue headwinds resulting from the pandemic. Excluding COVID-related shifts, underlying AUR grew high-single digits with double-digit growth in
North America andEurope - As stores reopen, our consumers are progressively shifting back to our core pre-COVID-19 categories. Home and Loungewear are also emerging as high potential, under-developed lifestyle categories
- Continued to drive AUR and brand elevation journey across every region, despite significant revenue headwinds resulting from the pandemic. Excluding COVID-related shifts, underlying AUR grew high-single digits with double-digit growth in
- Drive Targeted Expansion in Our Regions and Channels
- Performance improved sequentially by month across all regions throughout the quarter, led by digital commerce comp growth of 13% in the first quarter
- Chinese mainland sales increased mid-teens to last year in constant currency, on track to return to pre-pandemic growth levels in the second quarter of Fiscal 2021
- Lead With Digital
- Strong digital momentum in the first quarter, with positive comps in our owned
Ralph Lauren digital sites across all three regions. Global reported sell-out performance in our wholesale digital businesses was also up strongly to last year - Enhanced our connected retailing capabilities and digital offerings with the launch of Buy Online Pick Up in Store and curbside pickup in
North America , digital clienteling and expansion of Buy Online Ship from Store globally
- Strong digital momentum in the first quarter, with positive comps in our owned
- Operate With Discipline to Fuel Growth
- Adjusted operating expenses declined 30% to last year, primarily driven by savings from employee furloughs, lower rent and reduced corporate and selling expenses
- Inventories declined 22% at the end of the quarter, reflecting double-digit declines across all geographies to ensure healthy inventory positions across channels
- Improved cash conversion cycle to last year through a combination of lower accounts receivable and extended days payable, despite challenging global retail conditions
First Quarter Fiscal 2021 Income Statement Review
Net Revenue. In the first quarter of Fiscal 2021, revenue decreased by 66% to
Revenue performance for the Company’s reportable segments in the first quarter compared to the prior year period was as follows:
- North America Revenue.
North America revenue in the first quarter decreased 77% to$165 million . In retail, comparable store sales inNorth America were down 64%, driven by a 77% decrease in brick and mortar stores and a 3% increase in digital commerce.North America wholesale revenue decreased 93%. - Europe Revenue.
Europe revenue in the first quarter decreased 67% to$121 million on a reported basis and decreased 64% in constant currency. In retail, comparable store sales inEurope were down 62%, with a 75% decrease in brick and mortar stores partly offset by a 44% increase in digital commerce.Europe wholesale revenue decreased 71% on a reported basis and decreased 68% in constant currency. - Asia Revenue.
Asia revenue in the first quarter decreased 34% to$172 million on a reported basis and decreased 32% in constant currency basis. Comparable store sales inAsia decreased 33%, with a 35% decline in our brick and mortar stores partly offset by a 68% increase in digital commerce.
Gross Profit. Gross profit for the first quarter of Fiscal 2021 was
Operating Expenses. Operating expenses in the first quarter of Fiscal 2021 were
Operating Income (Loss). Operating loss for the first quarter of Fiscal 2021 was
- North America Operating Loss.
North America operating loss in the first quarter was$25 million on a reported basis and$40 million on an adjusted basis.Adjusted North America operating margin was (24.3%), compared to 20.9% for the first fiscal quarter of Fiscal 2020. - Europe Operating Loss.
Europe operating loss in the first quarter was$17 million on a reported basis and$18 million on an adjusted basis. AdjustedEurope operating margin was (14.8%), compared to 22.0% for the first quarter of Fiscal 2020. Foreign currency negatively impacted adjusted operating margin rate by 910 basis points in the first quarter. - Asia Operating Income.
Asia operating income in the first quarter was$10 million on a reported basis and$13 million on an adjusted basis. AdjustedAsia operating margin was 7.4%, compared to 18.8% for the first quarter of Fiscal 2020. Foreign currency negatively impacted adjusted operating margin rate by 120 basis points in the first quarter.
Net Income (Loss) and EPS. Net loss in the first quarter of Fiscal 2021 was
In the first quarter of Fiscal 2021, the Company had an effective tax rate of approximately 26% on both a reported and an adjusted basis, resulting in an income benefit. This compared to an effective tax rate of approximately 20% on a reported basis and 21% on an adjusted basis in the prior year period, resulting in an income tax provision.
Balance Sheet and Cash Flow Review
The Company ended the first quarter of Fiscal 2021 with
Inventory at the end of the first quarter of Fiscal 2021 was
Full Year Fiscal 2021 and Second Quarter Outlook
Due to the ongoing high level of uncertainty and evolving situation surrounding COVID-19, we continue to suspend all future guidance.
We continue to expect our financial results for both the second quarter and full year Fiscal 2021 to be significantly adversely impacted by the pandemic and prolonged demand recovery. Though the timing and path of recovery in each market presents many uncertainties, including the potential for second waves of outbreaks across various markets, we have developed scenarios through which we plan to safely return our businesses to growth and value creation.
We are in the process of carefully evaluating our long-term operating structure to align with our evolving strategic priorities, with a focus on six key areas: team organizational structures, enterprise-wide processes, our distribution center and corporate office real estate footprint, our door presence across owned direct-to-consumer and wholesale partners, discretionary expenses, and our brand portfolio.
Conference Call
As previously announced, the Company will host a conference call and live online webcast today,
An online archive of the broadcast will be available by accessing the Company's investor relations website at http://investor.ralphlauren.com. A telephone replay of the call will be available from 12:00
ABOUT
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 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, earnings, and citizenship and sustainability goals and are indicated by words or phrases such as "anticipate," "outlook," "estimate," "expect," "project," "believe," "envision," "can," "will," "goal," "target," 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 certain 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.
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CONSOLIDATED BALANCE SHEETS |
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Prepared in accordance with |
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(Unaudited) |
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(millions) |
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ASSETS |
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Current assets: |
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|
|
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Cash and cash equivalents |
|
$ |
2,451.3 |
|
|
$ |
1,620.4 |
|
|
$ |
648.4 |
|
Short-term investments |
|
259.3 |
|
|
495.9 |
|
|
1,280.7 |
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Accounts receivable, net of allowances |
|
108.7 |
|
|
277.1 |
|
|
290.7 |
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Inventories |
|
773.2 |
|
|
736.2 |
|
|
988.6 |
|
|||
Income tax receivable |
|
63.9 |
|
|
84.8 |
|
|
33.0 |
|
|||
Prepaid expenses and other current assets |
|
200.6 |
|
|
160.8 |
|
|
412.7 |
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Total current assets |
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3,857.0 |
|
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3,375.2 |
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3,654.1 |
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Property and equipment, net |
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945.8 |
|
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979.5 |
|
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987.0 |
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Operating lease right-of-use assets |
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1,464.1 |
|
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1,511.6 |
|
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1,415.8 |
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Deferred tax assets |
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309.5 |
|
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245.2 |
|
|
94.3 |
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|||
|
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921.9 |
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915.5 |
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925.3 |
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Intangible assets, net |
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136.1 |
|
|
141.0 |
|
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158.2 |
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Other non-current assets(a) |
|
106.0 |
|
|
111.9 |
|
|
109.0 |
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Total assets |
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$ |
7,740.4 |
|
|
$ |
7,279.9 |
|
|
$ |
7,343.7 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Short-term debt |
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$ |
— |
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$ |
475.0 |
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$ |
— |
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Current portion of long-term debt |
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299.9 |
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299.6 |
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— |
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Accounts payable |
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144.2 |
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246.8 |
|
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351.5 |
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Income tax payable |
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70.9 |
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|
65.1 |
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|
45.3 |
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Current operating lease liabilities |
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314.7 |
|
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288.4 |
|
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293.8 |
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Accrued expenses and other current liabilities |
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657.2 |
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717.1 |
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900.4 |
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Total current liabilities |
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1,486.9 |
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2,092.0 |
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1,591.0 |
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Long-term debt |
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1,630.1 |
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396.4 |
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692.1 |
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Long-term operating lease liabilities |
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1,517.7 |
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1,568.3 |
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1,483.9 |
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Income tax payable |
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132.7 |
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132.7 |
|
|
146.7 |
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Non-current liability for unrecognized tax benefits |
|
91.7 |
|
|
88.9 |
|
|
77.9 |
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Other non-current liabilities |
|
325.8 |
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308.5 |
|
|
339.3 |
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Total liabilities |
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5,184.9 |
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4,586.8 |
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|
4,330.9 |
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Equity: |
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Common stock |
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1.3 |
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1.3 |
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|
1.3 |
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Additional paid-in-capital |
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2,609.5 |
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2,594.4 |
|
|
2,516.8 |
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Retained earnings |
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5,866.3 |
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5,994.0 |
|
|
5,878.6 |
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|
|
(5,812.3 |
) |
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(5,778.4 |
) |
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(5,274.7 |
) |
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Accumulated other comprehensive loss |
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(109.3 |
) |
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(118.2 |
) |
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(109.2 |
) |
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Total equity |
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2,555.5 |
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|
2,693.1 |
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|
3,012.8 |
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Total liabilities and equity |
|
$ |
7,740.4 |
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$ |
7,279.9 |
|
|
$ |
7,343.7 |
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|
|
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|
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$ |
780.6 |
|
|
$ |
945.3 |
|
|
$ |
1,271.1 |
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Cash & Investments (ST & LT) |
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2,710.6 |
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|
2,116.3 |
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1,963.2 |
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|||
|
|
780.6 |
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945.3 |
|
|
1,237.0 |
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Cash & ST Investments |
|
2,710.6 |
|
|
2,116.3 |
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|
1,929.1 |
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(a) Includes non-current investments of: |
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$ |
— |
|
|
$ |
— |
|
|
$ |
34.1 |
|
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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Prepared in accordance with |
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(Unaudited) |
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Three Months Ended |
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(millions, except per share data) |
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$ |
165.1 |
|
|
$ |
719.4 |
|
|
|
120.7 |
|
|
360.8 |
|
||
|
|
171.9 |
|
|
258.6 |
|
||
Other non-reportable segments |
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29.8 |
|
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90.0 |
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Net revenues |
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487.5 |
|
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1,428.8 |
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Cost of goods sold |
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(138.8 |
) |
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(508.0 |
) |
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Gross profit |
|
348.7 |
|
|
920.8 |
|
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Selling, general, and administrative expenses |
|
(507.6 |
) |
|
(746.7 |
) |
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Impairment of assets |
|
(2.1 |
) |
|
(1.2 |
) |
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Restructuring and other charges |
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(7.0 |
) |
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(29.6 |
) |
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Total other operating expenses, net |
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(516.7 |
) |
|
(777.5 |
) |
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Operating income (loss) |
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(168.0 |
) |
|
143.3 |
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Interest expense |
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(9.6 |
) |
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(4.2 |
) |
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Interest income |
|
2.9 |
|
|
11.6 |
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Other income (expense), net |
|
2.1 |
|
|
(4.1 |
) |
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Income (loss) before income taxes |
|
(172.6 |
) |
|
146.6 |
|
||
Income tax benefit (provision) |
|
44.9 |
|
|
(29.5 |
) |
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Net income (loss) |
|
$ |
(127.7 |
) |
|
$ |
117.1 |
|
Net income (loss) per common share: |
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|
|
|
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Basic |
|
$ |
(1.75 |
) |
|
$ |
1.50 |
|
Diluted |
|
$ |
(1.75 |
) |
|
$ |
1.47 |
|
Weighted average common shares outstanding: |
|
|
|
|
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Basic |
|
73.1 |
|
|
78.2 |
|
||
Diluted |
|
73.1 |
|
|
79.9 |
|
||
Dividends declared per share |
|
$ |
— |
|
|
$ |
0.6875 |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Prepared in accordance with |
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(Unaudited) |
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Three Months Ended |
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(millions) |
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Cash flows from operating activities: |
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|
|
|
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Net income (loss) |
|
$ |
(127.7 |
) |
|
$ |
117.1 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
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|
||||
Depreciation and amortization expense |
|
63.7 |
|
|
66.2 |
|
||
Deferred income tax benefit |
|
(66.9 |
) |
|
(8.1 |
) |
||
Non-cash stock-based compensation expense |
|
15.1 |
|
|
23.0 |
|
||
Non-cash impairment of assets |
|
2.1 |
|
|
1.2 |
|
||
Bad debt expense (benefit) |
|
(16.5 |
) |
|
0.1 |
|
||
Other non-cash benefits |
|
— |
|
|
(2.0 |
) |
||
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
186.3 |
|
|
108.6 |
|
||
Inventories |
|
(29.0 |
) |
|
(165.7 |
) |
||
Prepaid expenses and other current assets |
|
(37.4 |
) |
|
(48.8 |
) |
||
Accounts payable and accrued liabilities |
|
(119.2 |
) |
|
82.9 |
|
||
Income tax receivables and payables |
|
35.2 |
|
|
13.3 |
|
||
Deferred income |
|
0.3 |
|
|
1.8 |
|
||
Other balance sheet changes |
|
23.7 |
|
|
7.8 |
|
||
Net cash provided by (used in) operating activities |
|
(70.3 |
) |
|
197.4 |
|
||
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
(21.3 |
) |
|
(49.4 |
) |
||
Purchases of investments |
|
(63.6 |
) |
|
(173.5 |
) |
||
Proceeds from sales and maturities of investments |
|
301.9 |
|
|
308.4 |
|
||
Acquisitions and ventures |
|
— |
|
|
0.9 |
|
||
Proceeds from sale of property |
|
— |
|
|
20.8 |
|
||
Settlement of net investment hedges |
|
3.7 |
|
|
— |
|
||
Net cash provided by investing activities |
|
220.7 |
|
|
107.2 |
|
||
Cash flows from financing activities: |
|
|
|
|
||||
Repayments of borrowings on credit facilities |
|
(475.0 |
) |
|
— |
|
||
Proceeds from the issuance of long-term debt |
|
1,241.9 |
|
|
— |
|
||
Payments of finance lease obligations |
|
(1.6 |
) |
|
(4.9 |
) |
||
Payments of dividends |
|
(49.8 |
) |
|
(48.8 |
) |
||
Repurchases of common stock, including shares surrendered for tax withholdings |
|
(33.9 |
) |
|
(191.1 |
) |
||
Other financing activities |
|
(8.5 |
) |
|
— |
|
||
Net cash provided by (used in) financing activities |
|
673.1 |
|
|
(244.8 |
) |
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
7.6 |
|
|
5.1 |
|
||
Net increase in cash, cash equivalents, and restricted cash |
|
831.1 |
|
|
64.9 |
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
|
1,629.8 |
|
|
626.5 |
|
||
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
2,460.9 |
|
|
$ |
691.4 |
|
|
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SEGMENT INFORMATION |
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(Unaudited) |
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|
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|
||||
|
|
Three Months Ended |
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|
|
|
||||
|
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(millions) |
||||||
Net revenues: |
|
|
|
|
||||
|
|
$ |
165.1 |
|
|
$ |
719.4 |
|
|
|
120.7 |
|
|
360.8 |
|
||
|
|
171.9 |
|
|
258.6 |
|
||
Other non-reportable segments |
|
29.8 |
|
|
90.0 |
|
||
Total net revenues |
|
$ |
487.5 |
|
|
$ |
1,428.8 |
|
|
|
|
|
|
||||
Operating income (loss): |
|
|
|
|
||||
|
|
$ |
(24.8 |
) |
|
$ |
150.1 |
|
|
|
(16.9 |
) |
|
79.4 |
|
||
|
|
10.1 |
|
|
48.1 |
|
||
Other non-reportable segments |
|
0.9 |
|
|
32.9 |
|
||
|
|
(30.7 |
) |
|
310.5 |
|
||
Unallocated corporate expenses |
|
(130.3 |
) |
|
(137.6 |
) |
||
Unallocated restructuring and other charges |
|
(7.0 |
) |
|
(29.6 |
) |
||
Total operating income (loss) |
|
$ |
(168.0 |
) |
|
$ |
143.3 |
|
|
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CONSTANT CURRENCY FINANCIAL MEASURES |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
Comparable Store Sales Data |
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
% Change |
|
|
|
|
|
|
|||||
|
|
Constant Currency |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Digital commerce |
|
|
3 |
% |
|
|
|
|
|
|
|||
Excluding digital commerce |
|
|
(77 |
%) |
|
|
|
|
|
|
|||
|
|
|
(64 |
%) |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Digital commerce |
|
|
44 |
% |
|
|
|
|
|
|
|||
Excluding digital commerce |
|
|
(75 |
%) |
|
|
|
|
|
|
|||
Total |
|
|
(62 |
%) |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Digital commerce |
|
|
68 |
% |
|
|
|
|
|
|
|||
Excluding digital commerce |
|
|
(35 |
%) |
|
|
|
|
|
|
|||
Total |
|
|
(33 |
%) |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
(57 |
%) |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Operating Segment Net Revenues Data |
|||||||||||||
|
|
|
|
|
|||||||||
|
|
Three Months Ended |
|
% Change |
|||||||||
|
|
|
|
|
|
As Reported |
|
Constant Currency |
|||||
|
|
(millions) |
|
|
|
|
|||||||
|
|
$ |
165.1 |
|
|
$ |
719.4 |
|
(77.0 |
%) |
|
(77.0 |
%) |
|
|
|
120.7 |
|
|
|
360.8 |
|
(66.6 |
%) |
|
(64.0 |
%) |
|
|
|
171.9 |
|
|
|
258.6 |
|
(33.5 |
%) |
|
(31.9 |
%) |
Other non-reportable segments |
|
|
29.8 |
|
|
|
90.0 |
|
(66.9 |
%) |
|
(66.8 |
%) |
Net revenues |
|
$ |
487.5 |
|
|
$ |
1,428.8 |
|
(65.9 |
%) |
|
(64.9 |
%) |
|
||||||||||||||||||||||||||||||||||||||||
NET REVENUES BY SALES CHANNEL |
||||||||||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
|
North America |
|
|
|
|
|
Other |
|
Total |
|
North America |
|
|
|
|
|
Other |
|
Total |
||||||||||||||||||||
|
|
(millions) |
||||||||||||||||||||||||||||||||||||||
Sales Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Retail |
|
$ |
142.6 |
|
|
$ |
79.2 |
|
|
$ |
166.5 |
|
|
$ |
6.5 |
|
|
$ |
394.8 |
|
|
$ |
403.1 |
|
|
$ |
218.5 |
|
|
$ |
246.5 |
|
|
$ |
49.5 |
|
|
$ |
917.6 |
|
Wholesale |
|
22.5 |
|
|
41.5 |
|
|
5.4 |
|
|
0.5 |
|
|
69.9 |
|
|
316.3 |
|
|
142.3 |
|
|
12.1 |
|
|
1.8 |
|
|
472.5 |
|
||||||||||
Licensing |
|
— |
|
|
— |
|
|
— |
|
|
22.8 |
|
|
22.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
38.7 |
|
|
38.7 |
|
||||||||||
Net revenues |
|
$ |
165.1 |
|
|
$ |
120.7 |
|
|
$ |
171.9 |
|
|
$ |
29.8 |
|
|
$ |
487.5 |
|
|
$ |
719.4 |
|
|
$ |
360.8 |
|
|
$ |
258.6 |
|
|
$ |
90.0 |
|
|
$ |
1,428.8 |
|
|
||||
GLOBAL RETAIL STORE NETWORK |
||||
(Unaudited) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41 |
|
41 |
Polo Factory Stores |
|
189 |
|
183 |
Total Directly Operated Stores |
|
230 |
|
224 |
Concessions |
|
2 |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
31 |
|
26 |
Polo Factory Stores |
|
64 |
|
66 |
Total Directly Operated Stores |
|
95 |
|
92 |
Concessions |
|
29 |
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
68 |
|
59 |
Polo Factory Stores |
|
68 |
|
60 |
Total Directly Operated Stores |
|
136 |
|
119 |
Concessions |
|
619 |
|
624 |
|
|
|
|
|
Other |
|
|
|
|
Club Monaco Stores |
|
72 |
|
75 |
Club Monaco Concessions |
|
4 |
|
5 |
|
|
|
|
|
Global Directly Operated Stores and Concessions |
|
|
|
|
|
|
140 |
|
126 |
Polo Factory Stores |
|
321 |
|
309 |
Club Monaco Stores |
|
72 |
|
75 |
Total Directly Operated Stores |
|
533 |
|
510 |
Concessions |
|
654 |
|
661 |
|
|
|
|
|
Global Licensed Stores |
|
|
|
|
Total Licensed Stores |
|
273 |
|
262 |
|
||||||||||||
RECONCILIATION OF NON- |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
||||||||||
|
|
Three Months Ended |
||||||||||
|
|
|
||||||||||
|
|
As Reported |
|
Total Adjustments(a)(b) |
|
As Adjusted |
||||||
|
|
(millions, except per share data) |
||||||||||
Net revenues |
|
$ |
487.5 |
|
|
$ |
— |
|
|
$ |
487.5 |
|
Gross profit |
|
348.7 |
|
|
1.3 |
|
|
350.0 |
|
|||
Gross profit margin |
|
71.5 |
% |
|
|
|
71.8 |
% |
||||
Total other operating expenses, net |
|
(516.7 |
) |
|
(7.4 |
) |
|
(524.1 |
) |
|||
Operating expense margin |
|
106.0 |
% |
|
|
|
107.5 |
% |
||||
Operating loss |
|
(168.0 |
) |
|
(6.1 |
) |
|
(174.1 |
) |
|||
Operating margin |
|
(34.5 |
%) |
|
|
|
(35.7 |
%) |
||||
Loss before income taxes |
|
(172.6 |
) |
|
(6.1 |
) |
|
(178.7 |
) |
|||
Income tax benefit |
|
44.9 |
|
|
0.6 |
|
|
45.5 |
|
|||
Effective tax rate |
|
26.0 |
% |
|
|
|
25.5 |
% |
||||
Net loss |
|
$ |
(127.7 |
) |
|
$ |
(5.5 |
) |
|
$ |
(133.2 |
) |
Net loss per diluted common share |
|
$ |
(1.75 |
) |
|
|
|
$ |
(1.82 |
) |
||
Weighted average common shares outstanding - Diluted |
|
73.1 |
|
|
|
|
73.1 |
|
||||
SEGMENT INFORMATION - OPERATING INCOME (LOSS): |
|
|
|
|
|
|
||||||
|
|
$ |
(24.8 |
) |
|
$ |
(15.3 |
) |
|
$ |
(40.1 |
) |
Operating margin |
|
(15.0 |
%) |
|
|
|
(24.3 |
%) |
||||
|
|
(16.9 |
) |
|
(1.0 |
) |
|
(17.9 |
) |
|||
Operating margin |
|
(14.0 |
%) |
|
|
|
(14.8 |
%) |
||||
|
|
10.1 |
|
|
2.6 |
|
|
12.7 |
|
|||
Operating margin |
|
5.9 |
% |
|
|
|
7.4 |
% |
||||
Other non-reportable segments |
|
0.9 |
|
|
0.6 |
|
|
1.5 |
|
|||
Operating margin |
|
3.0 |
% |
|
|
|
5.0 |
% |
||||
Unallocated corporate expenses and restructuring & other charges |
|
(137.3 |
) |
|
7.0 |
|
|
(130.3 |
) |
|||
Total operating loss |
|
$ |
(168.0 |
) |
|
$ |
(6.1 |
) |
|
$ |
(174.1 |
) |
|
||||||||||||
RECONCILIATION OF NON- |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended |
||||||||||
|
|
|
||||||||||
|
|
As Reported |
|
Total Adjustments(a)(c) |
|
As Adjusted |
||||||
|
|
(millions, except per share data) |
||||||||||
Net revenues |
|
$ |
1,428.8 |
|
|
$ |
— |
|
|
$ |
1,428.8 |
|
Gross profit |
|
920.8 |
|
|
0.6 |
|
|
921.4 |
|
|||
Gross profit margin |
|
64.4 |
% |
|
|
|
64.5 |
% |
||||
Total other operating expenses, net |
|
(777.5 |
) |
|
30.8 |
|
|
(746.7 |
) |
|||
Operating expense margin |
|
54.4 |
% |
|
|
|
52.3 |
% |
||||
Operating income |
|
143.3 |
|
|
31.4 |
|
|
174.7 |
|
|||
Operating margin |
|
10.0 |
% |
|
|
|
12.2 |
% |
||||
Income before income taxes |
|
146.6 |
|
|
31.4 |
|
|
178.0 |
|
|||
Income tax provision |
|
(29.5 |
) |
|
(7.0 |
) |
|
(36.5 |
) |
|||
Effective tax rate |
|
20.1 |
% |
|
|
|
20.5 |
% |
||||
Net income |
|
$ |
117.1 |
|
|
$ |
24.4 |
|
|
$ |
141.5 |
|
Net income per diluted common share |
|
$ |
1.47 |
|
|
|
|
$ |
1.77 |
|
||
Weighted average common shares outstanding - Diluted |
|
79.9 |
|
|
|
|
79.9 |
|
||||
SEGMENT INFORMATION - OPERATING INCOME: |
|
|
|
|
|
|
||||||
|
|
$ |
150.1 |
|
|
$ |
— |
|
|
$ |
150.1 |
|
Operating margin |
|
20.9 |
% |
|
|
|
20.9 |
% |
||||
|
|
79.4 |
|
|
0.1 |
|
|
79.5 |
|
|||
Operating margin |
|
22.0 |
% |
|
|
|
22.0 |
% |
||||
|
|
48.1 |
|
|
0.5 |
|
|
48.6 |
|
|||
Operating margin |
|
18.6 |
% |
|
|
|
18.8 |
% |
||||
Other non-reportable segments |
|
32.9 |
|
|
— |
|
|
32.9 |
|
|||
Operating margin |
|
36.5 |
% |
|
|
|
36.5 |
% |
||||
Unallocated corporate expenses and restructuring & other charges |
|
(167.2 |
) |
|
30.8 |
|
|
(136.4 |
) |
|||
Total operating income |
|
$ |
143.3 |
|
|
$ |
31.4 |
|
|
$ |
174.7 |
|
FOOTNOTES TO RECONCILIATION OF NON-
(a) |
Adjustments for inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations. Adjustments for COVID-19-related bad debt expense (benefit) is recorded within selling, general, and administrative ("SG&A") expenses 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 within restructuring and other charges in the consolidated statements of operations. |
|
|
||
(b) |
Adjustments for the three months ended |
|
|
||
(c) |
Adjustments for the three months ended |
NON-
Since
This earnings release also includes certain other non-
Adjustments made during the fiscal periods presented include charges recorded in connection with the Company's restructuring plans, as well as certain other charges associated with other non-recurring events, as described in the footnotes to the non-
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