Ralph Lauren Reports Second Quarter Fiscal 2024 Results Ahead of Expectations
- Second Quarter Revenue Increased 3% on a Reported Basis and 2% in Constant Currency, Ahead of Expectations, Led by Continued Momentum in
Asia - Global Direct-to-Consumer Comparable Store Sales Accelerated to 6% Growth in the Quarter, Driven by Positive Retail Comps Across All Regions and Channels and 10% AUR Growth
- Delivered Gross and Operating Margins Above Our Outlook, with Continued Brand Elevation and Expense Discipline More than Offsetting Ongoing Product Cost Headwinds and Higher Planned Marketing and Digital Investments in the Period
- Drove Healthy Inventory Positioning Entering Holiday, with Global Inventories Down 5% to Prior Year
- Returned Approximately
$275 Million to Shareholders Through Our Dividend and Repurchase of Class A Common Stock This Fiscal Year-to-Date - Reiterated Full Year Fiscal 2024 Outlook of Low-Single Digit Revenue Growth, Centering on 1% to 2%, and Adjusted Operating Margin Expansion on Higher Expected Gross Margins, All in Constant Currency
"We inspire people to embrace their sense of individual style through a timeless, elegant way of living," said
"Our teams delivered solid second quarter performance ahead of our commitments with stronger top-line growth across all regions, supported by our iconic brand, pricing power and continued strategic investments," said
Key Achievements in Second Quarter Fiscal 2024
We delivered the following highlights across our
- Elevate and Energize Our Lifestyle Brand
- Continued to recruit high-value, younger consumers to the brand and re-engage existing consumers through a diverse range of cultural moments spanning fashion, music, gaming and sports, notably: our Collection show at New York Fashion Week in September; sponsorships of the
U.S. Open,Wimbledon andRyder Cup ; the launch ofPolo Ralph Lauren x Fortnite Race to Greatness; another successfulGolden Week inAsia ; and dressingBeyoncé in her Renaissance World Tour - Added 1.3 million new consumers to our direct-to-consumer businesses and reached 55.9 million social media followers globally, up low-double-digits to last year driven by growth on multiple platforms across key markets
- Continued to recruit high-value, younger consumers to the brand and re-engage existing consumers through a diverse range of cultural moments spanning fashion, music, gaming and sports, notably: our Collection show at New York Fashion Week in September; sponsorships of the
- Drive the Core and Expand for More
- Increased average unit retail ("AUR") by 10% across our direct-to-consumer network in the second quarter, on top of an 18% increase last year, reflecting the durability of our multi-pronged elevation approach
- Drove momentum in our Core business, up high-single digits to last year, as well as our high-potential categories — including Women's, Outerwear and Home — up low-double digits to last year, both in constant currency
- Product highlights this quarter included: the launch of our latest iconic
Ralph Lauren Collection handbag, the RL 888;U.S. Open,Wimbledon , andRyder Cup collections and LA28 Olympic jacket; and limited edition P-Wing Fortnite Sneaker-Boot
- Win in Key Cities with Our Consumer Ecosystem
- By region, constant currency sales performance was led by
Asia , up 10% on a reported basis and 13% in constant currency withChina up more than 20% to last year.Europe grew 7% on a reported basis but was flat in constant currency, with a previously reported timing shift into the first quarter.North America declined 1%, improving sequentially and above our expectations, driven by better performance across all direct-to-consumer channels - Continued to expand and scale our key city ecosystems in the second quarter, including our first connected ecosystem in
Canada with a new luxury store experience inToronto and the October launch of our Canadian digital flagship RalphLauren.ca site
- By region, constant currency sales performance was led by
Our business is supported by our fortress foundation, which we define through our five key enablers, including: our people and culture, best-in-class digital technology and analytics, superior operational capabilities, a powerful balance sheet, and leadership in citizenship and sustainability.
Second Quarter Fiscal 2024 Income Statement Review
Net Revenue. In the second quarter of Fiscal 2024, revenue increased 3% to
Revenue performance for the Company's reportable segments in the second quarter compared to the prior year period was as follows:
- North America Revenue.
North America revenue in the second quarter decreased 1% to$718 million . In retail, comparable store sales inNorth America improved to 4% growth, including a 4% increase in digital commerce and a 4% increase in brick and mortar stores.North America wholesale revenue decreased 7% as the Company carefully manages sell-in to align with softer consumer demand in the channel.
- Europe Revenue.
Europe revenue in the second quarter increased 7% to$527 million on a reported basis and was flat in constant currency. Results included approximately 5 points of negative impact from lapping last year's favorable post-pandemic wholesale allowances and a timing shift of wholesale shipments into the first quarter of Fiscal 2024 to maximize full-price selling. In retail, comparable store sales inEurope improved to 6% growth, with a 5% increase in brick and mortar stores and a 14% increase in digital commerce.Europe wholesale revenue was flat to prior year on a reported basis and declined 7% in constant currency due to the previously disclosed impacts noted above.
- Asia Revenue.
Asia revenue in the second quarter increased 10% to$348 million on a reported basis and 13% in constant currency. Comparable store sales inAsia increased 8%, with a 7% increase in our brick and mortar stores and a 19% increase in digital commerce.
Gross Profit. Gross profit for the second quarter of Fiscal 2024 was
Operating Expenses. Operating expenses in the second quarter of Fiscal 2024 were
Operating Income. Operating income for the second quarter of Fiscal 2024 was
- North America Operating Income.
North America operating income in the second quarter was$110 million on a reported basis and$108 million on an adjusted basis.Adjusted North America operating margin was 15.1%, down 210 basis points to last year, with strong gross margin expansion more than offset by higher operating expenses due to the timing of planned strategic investments.
- Europe Operating Income.
Europe operating income in the second quarter was$132 million on both a reported and adjusted basis. AdjustedEurope operating margin was 25.1%, down 220 basis points to last year. Foreign currency favorably impacted adjusted operating margin rate by 130 basis points in the second quarter.
- Asia Operating Income.
Asia operating income in the second quarter was$68 million on both a reported and adjusted basis. AdjustedAsia operating margin was 19.6%, down 120 basis points to last year.
Net Income and EPS. Net income in the second quarter of Fiscal 2024 was
In the second quarter of Fiscal 2024, the Company had an effective tax rate of approximately 11% on a reported basis and 18% on an adjusted basis. This compared to an effective tax rate of approximately 25% on both a reported basis and adjusted basis in the prior year period.
Balance Sheet and Cash Flow Review
The Company ended the second quarter of Fiscal 2024 with
Inventory at the end of the second quarter of Fiscal 2024 was
The Company repurchased approximately
Full Year Fiscal 2024 and Third Quarter Outlook
The Company's outlook is based on its best assessment of the current geopolitical and macroeconomic environment, including inflationary pressures and other consumer spending-related headwinds, and foreign currency volatility, among others. The full year Fiscal 2024 and third quarter guidance excludes any potential restructuring-related and other net charges that may be incurred in future periods, as described in the "Non-
For Fiscal 2024, the Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, centering around 1% to 2%. This outlook reflects slightly increased caution around the wholesale channel. Based on current exchange rates, foreign currency is now expected to negatively impact revenue growth by approximately 50 basis points in Fiscal 2024.
The Company continues to expect operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency to 12.3% to 12.5%, driven by gross margin expansion. Foreign currency is expected to negatively impact operating margin by about 10 basis points in Fiscal 2024. Gross margin is now expected to increase approximately 120 to 170 basis points in constant currency, up from the prior outlook of 100 basis points, with reduced freight costs, favorable channel and geographic mix and continued growth in AUR more than offsetting product cost inflation. Foreign currency is still expected to negatively impact gross margins by approximately 30 basis points in Fiscal 2024. Gross margin expansion is expected to more than offset higher operating expenses as a percent of revenue due to channel mix shifts and as the Company invests in long-term strategic growth initiatives, notably digital and key city ecosystem expansion.
For the third quarter, the Company expects revenue to be up approximately 1% to 2% to last year in constant currency. Foreign currency is expected to negatively impact revenue growth by approximately 30 basis points.
Operating margin for the third quarter is expected to be roughly flat in constant currency, with about 10 basis points of foreign currency benefit. The Company expects constant currency gross margin expansion of approximately 100 to 150 basis points to be largely offset by higher operating expenses due to the timing of strategic investments in the period, with a higher proportion of marketing and ecosystem investments planned in the second and third quarters of the fiscal year. Foreign currency is expected to negatively impact gross margin by approximately 20 basis points in the third quarter.
Full year Fiscal 2024 tax rate is now expected in the range of approximately 22% to 23%, assuming a continuation of current tax laws, while third quarter tax rate is expected in the range of 23% to 24%.
The Company expects capital expenditures for Fiscal 2024 of approximately
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, without limitation, statements regarding our current expectations about the Company's future operating results and financial condition, the implementation and results of our strategic plans and initiatives, store openings and closings, capital expenses, our plans regarding our quarterly cash dividend and Class A common stock repurchase programs, and our ability to meet environmental, social, and governance goals. Forward looking statements are based on current expectations and are indicated by words or phrases such as "aim," "anticipate," "outlook," "estimate," "ensure," "commit," "expect," "project," "believe," "envision," "goal," "target," "can," "will," 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. 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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|
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Current assets: |
|
|
|
|
|
|
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Cash and cash equivalents |
|
$ |
1,381.8 |
|
|
$ |
1,529.3 |
|
|
$ |
1,107.1 |
|
Short-term investments |
|
|
85.1 |
|
|
|
36.4 |
|
|
|
309.6 |
|
Accounts receivable, net of allowances |
|
|
461.1 |
|
|
|
447.7 |
|
|
|
489.6 |
|
Inventories |
|
|
1,195.3 |
|
|
|
1,071.3 |
|
|
|
1,261.4 |
|
Income tax receivable |
|
|
50.0 |
|
|
|
50.7 |
|
|
|
54.1 |
|
Prepaid expenses and other current assets |
|
|
221.2 |
|
|
|
188.7 |
|
|
|
218.8 |
|
Total current assets |
|
|
3,394.5 |
|
|
|
3,324.1 |
|
|
|
3,440.6 |
|
Property and equipment, net |
|
|
875.6 |
|
|
|
955.5 |
|
|
|
899.1 |
|
Operating lease right-of-use assets |
|
|
1,088.2 |
|
|
|
1,134.0 |
|
|
|
1,016.7 |
|
Deferred tax assets |
|
|
262.7 |
|
|
|
255.1 |
|
|
|
243.0 |
|
|
|
|
883.0 |
|
|
|
898.9 |
|
|
|
865.5 |
|
Intangible assets, net |
|
|
82.2 |
|
|
|
88.9 |
|
|
|
95.6 |
|
Other non-current assets |
|
|
136.9 |
|
|
|
133.0 |
|
|
|
173.1 |
|
Total assets |
|
$ |
6,723.1 |
|
|
$ |
6,789.5 |
|
|
$ |
6,733.6 |
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|
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
460.1 |
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|
$ |
371.6 |
|
|
$ |
498.0 |
|
Current income tax payable |
|
|
56.3 |
|
|
|
59.7 |
|
|
|
89.9 |
|
Current operating lease liabilities |
|
|
270.9 |
|
|
|
266.7 |
|
|
|
244.6 |
|
Accrued expenses and other current liabilities |
|
|
823.1 |
|
|
|
795.5 |
|
|
|
877.1 |
|
Total current liabilities |
|
|
1,610.4 |
|
|
|
1,493.5 |
|
|
|
1,709.6 |
|
Long-term debt |
|
|
1,139.5 |
|
|
|
1,138.5 |
|
|
|
1,137.5 |
|
Long-term finance lease liabilities |
|
|
266.9 |
|
|
|
315.3 |
|
|
|
323.8 |
|
Long-term operating lease liabilities |
|
|
1,079.0 |
|
|
|
1,141.1 |
|
|
|
1,036.7 |
|
Non-current income tax payable |
|
|
42.2 |
|
|
|
75.9 |
|
|
|
73.6 |
|
Non-current liability for unrecognized tax benefits |
|
|
100.7 |
|
|
|
93.8 |
|
|
|
86.6 |
|
Other non-current liabilities |
|
|
115.2 |
|
|
|
100.9 |
|
|
|
110.2 |
|
Total liabilities |
|
|
4,353.9 |
|
|
|
4,359.0 |
|
|
|
4,478.0 |
|
Equity: |
|
|
|
|
|
|
||||||
Common stock |
|
|
1.3 |
|
|
|
1.3 |
|
|
|
1.3 |
|
Additional paid-in-capital |
|
|
2,875.0 |
|
|
|
2,824.3 |
|
|
|
2,789.5 |
|
Retained earnings |
|
|
6,779.7 |
|
|
|
6,598.2 |
|
|
|
6,448.1 |
|
|
|
|
(7,024.0 |
) |
|
|
(6,797.3 |
) |
|
|
(6,726.0 |
) |
Accumulated other comprehensive loss |
|
|
(262.8 |
) |
|
|
(196.0 |
) |
|
|
(257.3 |
) |
Total equity |
|
|
2,369.2 |
|
|
|
2,430.5 |
|
|
|
2,255.6 |
|
Total liabilities and equity |
|
$ |
6,723.1 |
|
|
$ |
6,789.5 |
|
|
$ |
6,733.6 |
|
|
|
|
|
|
|
|
||||||
|
|
$ |
327.4 |
|
|
$ |
427.2 |
|
|
$ |
279.2 |
|
Cash & Short-term Investments |
|
|
1,466.9 |
|
|
|
1,565.7 |
|
|
|
1,416.7 |
|
_____________________
(a) |
Calculated as cash and cash equivalents, plus short-term investments, less total debt. |
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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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Six Months Ended |
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(millions, except per share data) |
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Net revenues |
|
$ |
1,633.0 |
|
|
$ |
1,579.9 |
|
|
$ |
3,129.5 |
|
|
$ |
3,070.5 |
|
Cost of goods sold |
|
|
(562.9 |
) |
|
|
(556.8 |
) |
|
|
(1,027.4 |
) |
|
|
(1,046.0 |
) |
Gross profit |
|
|
1,070.1 |
|
|
|
1,023.1 |
|
|
|
2,102.1 |
|
|
|
2,024.5 |
|
Selling, general, and administrative expenses |
|
|
(896.3 |
) |
|
|
(809.5 |
) |
|
|
(1,726.3 |
) |
|
|
(1,630.1 |
) |
Restructuring and other charges, net |
|
|
(9.3 |
) |
|
|
(6.9 |
) |
|
|
(44.9 |
) |
|
|
(12.5 |
) |
Total other operating expenses, net |
|
|
(905.6 |
) |
|
|
(816.4 |
) |
|
|
(1,771.2 |
) |
|
|
(1,642.6 |
) |
Operating income |
|
|
164.5 |
|
|
|
206.7 |
|
|
|
330.9 |
|
|
|
381.9 |
|
Interest expense |
|
|
(10.0 |
) |
|
|
(9.5 |
) |
|
|
(20.0 |
) |
|
|
(21.3 |
) |
Interest income |
|
|
15.8 |
|
|
|
6.6 |
|
|
|
31.5 |
|
|
|
10.2 |
|
Other expense, net |
|
|
(4.8 |
) |
|
|
(3.7 |
) |
|
|
(6.3 |
) |
|
|
(8.5 |
) |
Income before income taxes |
|
|
165.5 |
|
|
|
200.1 |
|
|
|
336.1 |
|
|
|
362.3 |
|
Income tax provision |
|
|
(18.6 |
) |
|
|
(49.6 |
) |
|
|
(57.1 |
) |
|
|
(88.4 |
) |
Net income |
|
$ |
146.9 |
|
|
$ |
150.5 |
|
|
$ |
279.0 |
|
|
$ |
273.9 |
|
Net income per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
2.24 |
|
|
$ |
2.21 |
|
|
$ |
4.24 |
|
|
$ |
3.97 |
|
Diluted |
|
$ |
2.19 |
|
|
$ |
2.18 |
|
|
$ |
4.15 |
|
|
$ |
3.90 |
|
Weighted-average common shares outstanding: |
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|
|
|
|
|
|
|
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Basic |
|
|
65.6 |
|
|
|
68.0 |
|
|
|
65.7 |
|
|
|
69.0 |
|
Diluted |
|
|
67.2 |
|
|
|
69.0 |
|
|
|
67.3 |
|
|
|
70.3 |
|
Dividends declared per share |
|
$ |
0.75 |
|
|
$ |
0.75 |
|
|
$ |
1.50 |
|
|
$ |
1.50 |
|
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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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Six 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 |
|
$ |
279.0 |
|
|
$ |
273.9 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization expense |
|
|
116.8 |
|
|
|
108.1 |
|
Deferred income tax expense |
|
|
6.1 |
|
|
|
36.1 |
|
Stock-based compensation expense |
|
|
50.7 |
|
|
|
40.7 |
|
Bad debt expense |
|
|
0.3 |
|
|
|
0.6 |
|
Other non-cash charges |
|
|
16.3 |
|
|
|
13.3 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
(26.5 |
) |
|
|
(113.8 |
) |
Inventories |
|
|
(151.0 |
) |
|
|
(345.8 |
) |
Prepaid expenses and other current assets |
|
|
(37.8 |
) |
|
|
(59.6 |
) |
Accounts payable and accrued liabilities |
|
|
154.7 |
|
|
|
31.8 |
|
Income tax receivables and payables |
|
|
(41.8 |
) |
|
|
28.9 |
|
Operating lease right-of-use assets and liabilities, net |
|
|
(18.2 |
) |
|
|
(12.3 |
) |
Other balance sheet changes |
|
|
(5.0 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
|
343.6 |
|
|
|
1.9 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(82.4 |
) |
|
|
(83.9 |
) |
Purchases of investments |
|
|
(158.6 |
) |
|
|
(431.2 |
) |
Proceeds from sales and maturities of investments |
|
|
108.1 |
|
|
|
849.2 |
|
Other investing activities |
|
|
— |
|
|
|
(6.0 |
) |
Net cash provided by (used in) investing activities |
|
|
(132.9 |
) |
|
|
328.1 |
|
Cash flows from financing activities: |
|
|
|
|
||||
Repayments of long-term debt |
|
|
— |
|
|
|
(500.0 |
) |
Payments of finance lease obligations |
|
|
(11.2 |
) |
|
|
(10.8 |
) |
Payments of dividends |
|
|
(98.2 |
) |
|
|
(99.1 |
) |
Repurchases of common stock, including shares surrendered for tax withholdings |
|
|
(225.7 |
) |
|
|
(417.3 |
) |
Net cash used in financing activities |
|
|
(335.1 |
) |
|
|
(1,027.2 |
) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(23.9 |
) |
|
|
(60.6 |
) |
Net decrease in cash, cash equivalents, and restricted cash |
|
|
(148.3 |
) |
|
|
(757.8 |
) |
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
1,536.9 |
|
|
|
1,872.0 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
1,388.6 |
|
|
$ |
1,114.2 |
|
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SEGMENT INFORMATION |
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(Unaudited) |
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Three Months Ended |
|
Six Months Ended |
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|
|
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|
|
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(millions) |
||||||
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
526.8 |
|
493.5 |
|
977.3 |
|
909.1 |
|
|
348.4 |
|
316.4 |
|
725.9 |
|
650.5 |
Other non-reportable segments |
|
40.0 |
|
43.4 |
|
76.8 |
|
83.6 |
Total net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132.4 |
|
134.6 |
|
229.6 |
|
207.8 |
|
|
68.4 |
|
65.7 |
|
161.7 |
|
144.4 |
Other non-reportable segments |
|
34.1 |
|
40.0 |
|
67.9 |
|
77.2 |
|
|
345.1 |
|
367.4 |
|
694.7 |
|
689.3 |
Unallocated corporate expenses |
|
(171.3) |
|
(153.8) |
|
(318.9) |
|
(294.9) |
Unallocated restructuring and other charges, net |
|
(9.3) |
|
(6.9) |
|
(44.9) |
|
(12.5) |
Total operating income |
|
|
|
|
|
|
|
|
|
||||||||||||||
CONSTANT CURRENCY FINANCIAL MEASURES |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||
Comparable Store Sales Data |
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
|
||||||
|
|
% Change |
|
% Change |
|
|
|
|
||||||
|
|
Constant Currency |
|
Constant Currency |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Digital commerce |
|
|
4 |
% |
|
|
(2 |
%) |
|
|
|
|
||
Brick and mortar |
|
|
4 |
% |
|
|
(1 |
%) |
|
|
|
|
||
|
|
|
4 |
% |
|
|
(1 |
%) |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Digital commerce |
|
|
14 |
% |
|
|
11 |
% |
|
|
|
|
||
Brick and mortar |
|
|
5 |
% |
|
|
3 |
% |
|
|
|
|
||
Total |
|
|
6 |
% |
|
|
4 |
% |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Digital commerce |
|
|
19 |
% |
|
|
15 |
% |
|
|
|
|
||
Brick and mortar |
|
|
7 |
% |
|
|
10 |
% |
|
|
|
|
||
Total |
|
|
8 |
% |
|
|
11 |
% |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
6 |
% |
|
|
4 |
% |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Operating Segment Net Revenues Data |
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
% Change |
||||||||||
|
|
|
|
|
|
As |
|
Constant |
||||||
|
|
(millions) |
|
|
|
|
||||||||
|
|
$ |
717.8 |
|
|
$ |
726.6 |
|
|
(1.2 |
%) |
|
(1.1 |
%) |
|
|
|
526.8 |
|
|
|
493.5 |
|
|
6.8 |
% |
|
(0.5 |
%) |
|
|
|
348.4 |
|
|
|
316.4 |
|
|
10.1 |
% |
|
12.6 |
% |
Other non-reportable segments |
|
|
40.0 |
|
|
|
43.4 |
|
|
(7.9 |
%) |
|
(7.9 |
%) |
Net revenues |
|
$ |
1,633.0 |
|
|
$ |
1,579.9 |
|
|
3.4 |
% |
|
1.7 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
Six Months Ended |
|
% Change |
||||||||||
|
|
|
|
|
|
As |
|
Constant |
||||||
|
|
(millions) |
|
|
|
|
||||||||
|
|
$ |
1,349.5 |
|
|
$ |
1,427.3 |
|
|
(5.4 |
%) |
|
(5.3 |
%) |
|
|
|
977.3 |
|
|
|
909.1 |
|
|
7.5 |
% |
|
3.0 |
% |
|
|
|
725.9 |
|
|
|
650.5 |
|
|
11.6 |
% |
|
15.2 |
% |
Other non-reportable segments |
|
|
76.8 |
|
|
|
83.6 |
|
|
(8.2 |
%) |
|
(8.2 |
%) |
Net revenues |
|
$ |
3,129.5 |
|
|
$ |
3,070.5 |
|
|
1.9 |
% |
|
1.4 |
% |
|
||||||||||||||||||||||||||||||
NET REVENUES BY SALES CHANNEL |
||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
|
North |
|
|
|
|
|
Other |
|
Total |
|
North |
|
|
|
|
|
Other |
|
Total |
||||||||||
|
|
(millions) |
||||||||||||||||||||||||||||
Sales Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail |
|
$ |
437.8 |
|
$ |
238.4 |
|
$ |
318.1 |
|
$ |
— |
|
$ |
994.3 |
|
$ |
424.0 |
|
$ |
204.8 |
|
$ |
288.2 |
|
$ |
— |
|
$ |
917.0 |
Wholesale |
|
|
280.0 |
|
|
288.4 |
|
|
30.3 |
|
|
— |
|
|
598.7 |
|
|
302.6 |
|
|
288.7 |
|
|
28.2 |
|
|
— |
|
|
619.5 |
Licensing |
|
|
— |
|
|
— |
|
|
— |
|
|
40.0 |
|
|
40.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
43.4 |
|
|
43.4 |
Net revenues |
|
$ |
717.8 |
|
$ |
526.8 |
|
$ |
348.4 |
|
$ |
40.0 |
|
$ |
1,633.0 |
|
$ |
726.6 |
|
$ |
493.5 |
|
$ |
316.4 |
|
$ |
43.4 |
|
$ |
1,579.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended |
||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
|
North |
|
|
|
|
|
Other |
|
Total |
|
North |
|
|
|
|
|
Other |
|
Total |
||||||||||
|
|
(millions) |
||||||||||||||||||||||||||||
Sales Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Retail |
|
$ |
848.8 |
|
$ |
465.1 |
|
$ |
670.2 |
|
$ |
— |
|
$ |
1,984.1 |
|
$ |
861.8 |
|
$ |
420.7 |
|
$ |
602.1 |
|
$ |
— |
|
$ |
1,884.6 |
Wholesale |
|
|
500.7 |
|
|
512.2 |
|
|
55.7 |
|
|
— |
|
|
1,068.6 |
|
|
565.5 |
|
|
488.4 |
|
|
48.4 |
|
|
— |
|
|
1,102.3 |
Licensing |
|
|
— |
|
|
— |
|
|
— |
|
|
76.8 |
|
|
76.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
83.6 |
|
|
83.6 |
Net revenues |
|
$ |
1,349.5 |
|
$ |
977.3 |
|
$ |
725.9 |
|
$ |
76.8 |
|
$ |
3,129.5 |
|
$ |
1,427.3 |
|
$ |
909.1 |
|
$ |
650.5 |
|
$ |
83.6 |
|
$ |
3,070.5 |
|
||||
GLOBAL RETAIL STORE NETWORK |
||||
(Unaudited) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49 |
|
46 |
Polo Outlet Stores |
|
187 |
|
193 |
Total Directly Operated Stores |
|
236 |
|
239 |
Concessions |
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
44 |
|
39 |
Polo Outlet Stores |
|
60 |
|
59 |
Total Directly Operated Stores |
|
104 |
|
98 |
Concessions |
|
27 |
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
128 |
|
107 |
Polo Outlet Stores |
|
96 |
|
90 |
Total Directly Operated Stores |
|
224 |
|
197 |
Concessions |
|
682 |
|
682 |
|
|
|
|
|
Global Directly Operated Stores and Concessions |
|
|
|
|
|
|
221 |
|
192 |
Polo Outlet Stores |
|
343 |
|
342 |
Total Directly Operated Stores |
|
564 |
|
534 |
Concessions |
|
710 |
|
712 |
|
|
|
|
|
Global Licensed Stores |
|
|
|
|
Total Licensed Stores |
|
194 |
|
118 |
|
||||||||||||||||||||
RECONCILIATION OF NON- |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
|
As |
|
Total |
|
As |
|
Foreign |
|
As |
||||||||||
|
|
(millions, except per share data) |
||||||||||||||||||
Net revenues |
|
$ |
1,633.0 |
|
|
$ |
— |
|
|
$ |
1,633.0 |
|
|
$ |
(27.1 |
) |
|
$ |
1,605.9 |
|
Gross profit |
|
|
1,070.1 |
|
|
|
(1.8 |
) |
|
|
1,068.3 |
|
|
|
(18.8 |
) |
|
|
1,049.5 |
|
Gross profit margin |
|
|
65.5 |
% |
|
|
|
|
65.4 |
% |
|
|
|
|
65.4 |
% |
||||
Total other operating expenses, net |
|
|
(905.6 |
) |
|
|
9.0 |
|
|
|
(896.6 |
) |
|
|
4.9 |
|
|
|
(891.7 |
) |
Operating expense margin |
|
|
55.5 |
% |
|
|
|
|
54.9 |
% |
|
|
|
|
55.5 |
% |
||||
Operating income |
|
|
164.5 |
|
|
|
7.2 |
|
|
|
171.7 |
|
|
|
(13.9 |
) |
|
|
157.8 |
|
Operating margin |
|
|
10.1 |
% |
|
|
|
|
10.5 |
% |
|
|
|
|
9.8 |
% |
||||
Income before income taxes |
|
|
165.5 |
|
|
|
7.2 |
|
|
|
172.7 |
|
|
|
|
|
||||
Income tax provision |
|
|
(18.6 |
) |
|
|
(13.2 |
) |
|
|
(31.8 |
) |
|
|
|
|
||||
Effective tax rate |
|
|
11.2 |
% |
|
|
|
|
18.5 |
% |
|
|
|
|
||||||
Net income |
|
$ |
146.9 |
|
|
$ |
(6.0 |
) |
|
$ |
140.9 |
|
|
|
|
|
||||
Net income per diluted common share |
|
$ |
2.19 |
|
|
|
|
$ |
2.10 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SEGMENT INFORMATION |
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
717.8 |
|
|
$ |
— |
|
|
$ |
717.8 |
|
|
$ |
0.9 |
|
|
$ |
718.7 |
|
|
|
|
526.8 |
|
|
|
— |
|
|
|
526.8 |
|
|
|
(35.9 |
) |
|
|
490.9 |
|
|
|
|
348.4 |
|
|
|
— |
|
|
|
348.4 |
|
|
|
7.9 |
|
|
|
356.3 |
|
Other non-reportable segments |
|
|
40.0 |
|
|
|
— |
|
|
|
40.0 |
|
|
|
— |
|
|
|
40.0 |
|
Total revenue |
|
$ |
1,633.0 |
|
|
$ |
— |
|
|
$ |
1,633.0 |
|
|
$ |
(27.1 |
) |
|
$ |
1,605.9 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
110.2 |
|
|
$ |
(2.1 |
) |
|
$ |
108.1 |
|
|
|
|
|
||||
Operating margin |
|
|
15.4 |
% |
|
|
|
|
15.1 |
% |
|
|
|
|
||||||
|
|
|
132.4 |
|
|
|
— |
|
|
|
132.4 |
|
|
|
|
|
||||
Operating margin |
|
|
25.1 |
% |
|
|
|
|
25.1 |
% |
|
|
|
|
||||||
|
|
|
68.4 |
|
|
|
— |
|
|
|
68.4 |
|
|
|
|
|
||||
Operating margin |
|
|
19.6 |
% |
|
|
|
|
19.6 |
% |
|
|
|
|
||||||
Other non-reportable segments |
|
|
34.1 |
|
|
|
— |
|
|
|
34.1 |
|
|
|
|
|
||||
Operating margin |
|
|
85.2 |
% |
|
|
|
|
85.2 |
% |
|
|
|
|
||||||
Unallocated corporate expenses and restructuring & other charges, net |
|
|
(180.6 |
) |
|
|
9.3 |
|
|
|
(171.3 |
) |
|
|
|
|
||||
Total operating income |
|
$ |
164.5 |
|
|
$ |
7.2 |
|
|
$ |
171.7 |
|
|
|
|
|
|
||||||||||||||||||||
RECONCILIATION OF NON- |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
Six Months Ended |
||||||||||||||||||
|
|
|
||||||||||||||||||
|
|
As |
|
Total |
|
As |
|
Foreign |
|
As |
||||||||||
|
|
(millions, except per share data) |
||||||||||||||||||
Net revenues |
|
$ |
3,129.5 |
|
|
$ |
— |
|
|
$ |
3,129.5 |
|
|
$ |
(15.3 |
) |
|
$ |
3,114.2 |
|
Gross profit |
|
|
2,102.1 |
|
|
|
(3.6 |
) |
|
|
2,098.5 |
|
|
|
(3.6 |
) |
|
|
2,094.9 |
|
Gross profit margin |
|
|
67.2 |
% |
|
|
|
|
67.1 |
% |
|
|
|
|
67.3 |
% |
||||
Total other operating expenses, net |
|
|
(1,771.2 |
) |
|
|
44.5 |
|
|
|
(1,726.7 |
) |
|
|
(3.2 |
) |
|
|
(1,729.9 |
) |
Operating expense margin |
|
|
56.6 |
% |
|
|
|
|
55.2 |
% |
|
|
|
|
55.6 |
% |
||||
Operating income |
|
|
330.9 |
|
|
|
40.9 |
|
|
|
371.8 |
|
|
|
(6.8 |
) |
|
|
365.0 |
|
Operating margin |
|
|
10.6 |
% |
|
|
|
|
11.9 |
% |
|
|
|
|
11.7 |
% |
||||
Income before income taxes |
|
|
336.1 |
|
|
|
40.9 |
|
|
|
377.0 |
|
|
|
|
|
||||
Income tax provision |
|
|
(57.1 |
) |
|
|
(21.0 |
) |
|
|
(78.1 |
) |
|
|
|
|
||||
Effective tax rate |
|
|
17.0 |
% |
|
|
|
|
20.7 |
% |
|
|
|
|
||||||
Net income |
|
$ |
279.0 |
|
|
$ |
19.9 |
|
|
$ |
298.9 |
|
|
|
|
|
||||
Net income per diluted common share |
|
$ |
4.15 |
|
|
|
|
$ |
4.44 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SEGMENT INFORMATION |
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUE: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
1,349.5 |
|
|
$ |
— |
|
|
$ |
1,349.5 |
|
|
$ |
2.5 |
|
|
$ |
1,352.0 |
|
|
|
|
977.3 |
|
|
|
— |
|
|
|
977.3 |
|
|
|
(41.3 |
) |
|
|
936.0 |
|
|
|
|
725.9 |
|
|
|
— |
|
|
|
725.9 |
|
|
|
23.5 |
|
|
|
749.4 |
|
Other non-reportable segments |
|
|
76.8 |
|
|
|
— |
|
|
|
76.8 |
|
|
|
— |
|
|
|
76.8 |
|
Total revenue |
|
$ |
3,129.5 |
|
|
$ |
— |
|
|
$ |
3,129.5 |
|
|
$ |
(15.3 |
) |
|
$ |
3,114.2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
235.5 |
|
|
$ |
(3.8 |
) |
|
$ |
231.7 |
|
|
|
|
|
||||
Operating margin |
|
|
17.4 |
% |
|
|
|
|
17.2 |
% |
|
|
|
|
||||||
|
|
|
229.6 |
|
|
|
(0.2 |
) |
|
|
229.4 |
|
|
|
|
|
||||
Operating margin |
|
|
23.5 |
% |
|
|
|
|
23.5 |
% |
|
|
|
|
||||||
|
|
|
161.7 |
|
|
|
— |
|
|
|
161.7 |
|
|
|
|
|
||||
Operating margin |
|
|
22.3 |
% |
|
|
|
|
22.3 |
% |
|
|
|
|
||||||
Other non-reportable segments |
|
|
67.9 |
|
|
|
— |
|
|
|
67.9 |
|
|
|
|
|
||||
Operating margin |
|
|
88.4 |
% |
|
|
|
|
88.4 |
% |
|
|
|
|
||||||
Unallocated corporate expenses and restructuring & other charges, net |
|
|
(363.8 |
) |
|
|
44.9 |
|
|
|
(318.9 |
) |
|
|
|
|
||||
Total operating income |
|
$ |
330.9 |
|
|
$ |
40.9 |
|
|
$ |
371.8 |
|
|
|
|
|
|
||||||||||||
RECONCILIATION OF NON- |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
||||||||||
|
|
Three Months Ended |
||||||||||
|
|
|
||||||||||
|
|
As |
|
Total |
|
As |
||||||
|
|
(millions, except per share data) |
||||||||||
Net revenues |
|
$ |
1,579.9 |
|
|
$ |
— |
|
|
$ |
1,579.9 |
|
Gross profit |
|
|
1,023.1 |
|
|
|
(2.4 |
) |
|
|
1,020.7 |
|
Gross profit margin |
|
|
64.8 |
% |
|
|
|
|
64.6 |
% |
||
Total other operating expenses, net |
|
|
(816.4 |
) |
|
|
7.1 |
|
|
|
(809.3 |
) |
Operating expense margin |
|
|
51.7 |
% |
|
|
|
|
51.2 |
% |
||
Operating income |
|
|
206.7 |
|
|
|
4.7 |
|
|
|
211.4 |
|
Operating margin |
|
|
13.1 |
% |
|
|
|
|
13.4 |
% |
||
Income before income taxes |
|
|
200.1 |
|
|
|
4.7 |
|
|
|
204.8 |
|
Income tax provision |
|
|
(49.6 |
) |
|
|
(1.2 |
) |
|
|
(50.8 |
) |
Effective tax rate |
|
|
24.8 |
% |
|
|
|
|
24.8 |
% |
||
Net income |
|
$ |
150.5 |
|
|
$ |
3.5 |
|
|
$ |
154.0 |
|
Net income per diluted common share |
|
$ |
2.18 |
|
|
|
|
$ |
2.23 |
|
||
|
|
|
|
|
|
|
||||||
SEGMENT INFORMATION |
|
|
|
|
|
|
||||||
OPERATING INCOME: |
|
|
|
|
|
|
||||||
|
|
$ |
127.1 |
|
|
$ |
(2.4 |
) |
|
$ |
124.7 |
|
Operating margin |
|
|
17.5 |
% |
|
|
|
|
17.2 |
% |
||
|
|
|
134.6 |
|
|
|
— |
|
|
|
134.6 |
|
Operating margin |
|
|
27.3 |
% |
|
|
|
|
27.3 |
% |
||
|
|
|
65.7 |
|
|
|
— |
|
|
|
65.7 |
|
Operating margin |
|
|
20.8 |
% |
|
|
|
|
20.8 |
% |
||
Other non-reportable segments |
|
|
40.0 |
|
|
|
— |
|
|
|
40.0 |
|
Operating margin |
|
|
92.3 |
% |
|
|
|
|
92.3 |
% |
||
Unallocated corporate expenses and restructuring & other charges, net |
|
|
(160.7 |
) |
|
|
7.1 |
|
|
|
(153.6 |
) |
Total operating income |
|
$ |
206.7 |
|
|
$ |
4.7 |
|
|
$ |
211.4 |
|
|
||||||||||||
RECONCILIATION OF NON- |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
||||||||||
|
|
Six Months Ended |
||||||||||
|
|
|
||||||||||
|
|
As |
|
Total |
|
As |
||||||
|
|
(millions, except per share data) |
||||||||||
Net revenues |
|
$ |
3,070.5 |
|
|
$ |
— |
|
|
$ |
3,070.5 |
|
Gross profit |
|
|
2,024.5 |
|
|
|
9.2 |
|
|
|
2,033.7 |
|
Gross profit margin |
|
|
65.9 |
% |
|
|
|
|
66.2 |
% |
||
Total other operating expenses, net |
|
|
(1,642.6 |
) |
|
|
10.3 |
|
|
|
(1,632.3 |
) |
Operating expense margin |
|
|
53.5 |
% |
|
|
|
|
53.2 |
% |
||
Operating income |
|
|
381.9 |
|
|
|
19.5 |
|
|
|
401.4 |
|
Operating margin |
|
|
12.4 |
% |
|
|
|
|
13.1 |
% |
||
Income before income taxes |
|
|
362.3 |
|
|
|
19.5 |
|
|
|
381.8 |
|
Income tax provision |
|
|
(88.4 |
) |
|
|
(4.8 |
) |
|
|
(93.2 |
) |
Effective tax rate |
|
|
24.4 |
% |
|
|
|
|
24.4 |
% |
||
Net income |
|
$ |
273.9 |
|
|
$ |
14.7 |
|
|
$ |
288.6 |
|
Net income per diluted common share |
|
$ |
3.90 |
|
|
|
|
$ |
4.11 |
|
||
|
|
|
|
|
|
|
||||||
SEGMENT INFORMATION |
|
|
|
|
|
|
||||||
OPERATING INCOME: |
|
|
|
|
|
|
||||||
|
|
$ |
259.9 |
|
|
$ |
6.5 |
|
|
$ |
266.4 |
|
Operating margin |
|
|
18.2 |
% |
|
|
|
|
18.7 |
% |
||
|
|
|
207.8 |
|
|
|
0.3 |
|
|
|
208.1 |
|
Operating margin |
|
|
22.9 |
% |
|
|
|
|
22.9 |
% |
||
|
|
|
144.4 |
|
|
|
— |
|
|
|
144.4 |
|
Operating margin |
|
|
22.2 |
% |
|
|
|
|
22.2 |
% |
||
Other non-reportable segments |
|
|
77.2 |
|
|
|
— |
|
|
|
77.2 |
|
Operating margin |
|
|
92.3 |
% |
|
|
|
|
92.3 |
% |
||
Unallocated corporate expenses and restructuring & other charges, net |
|
|
(307.4 |
) |
|
|
12.7 |
|
|
|
(294.7 |
) |
Total operating income |
|
$ |
381.9 |
|
|
$ |
19.5 |
|
|
$ |
401.4 |
|
FOOTNOTES TO RECONCILIATION OF NON-
(a) |
Adjustments for non-routine inventory-related charges (benefits) are recorded within cost of goods sold in the consolidated statements of operations. Adjustments for non-routine bad debt expense (benefit) and impairment of assets are recorded within selling, general, and administrative ("SG&A") expenses in the consolidated statements of operations. Adjustments for one-time income tax events are recorded within the income tax benefit (provision) in the consolidated statements of operations. Adjustments for all other charges are recorded within restructuring and other charges, net in the consolidated statements of operations. |
|
(b) |
Adjustments for the three months ended |
|
(c) |
Adjustments for the six months ended |
|
(d) |
Adjustments for the three months ended |
|
(e) |
Adjustments for the six months ended |
NON-
Because
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 activities, as well as certain other charges (benefits) associated with other non-recurring events, as described in the footnotes to the non-
Additionally, the Company's full year Fiscal 2024 and third quarter guidance excludes any potential restructuring-related and other charges that may be incurred in future periods. The Company is not able to provide a full reconciliation of these non-
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