UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 2, 2005
POLO RALPH LAUREN CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
001-13057 13-2622036
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(Commission File Number) (IRS Employer Identification No.)
650 MADISON AVENUE, NEW YORK, NEW YORK 10022
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(Address of Principal Executive Offices) (Zip Code)
(212) 318-7000
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On February 2, 2005, Polo Ralph Lauren Corporation (the "Company")
reported its results of operations for its fiscal quarter ended January 1, 2005.
A copy of the press release issued by the Company concerning the foregoing
results is furnished herewith as Exhibit 99.1 and is incorporated herein by
reference.
The information in this Form 8-K, including the accompanying
exhibit, is being furnished under Item 2.02 and shall not be deemed to be
"filed" for the purposes of Section 18 of the Securities Exchange Act of 1934
(the "Exchange Act"), or otherwise subject to the liability of such section, nor
shall such information be deemed incorporated by reference in any filing under
the Securities Act of 1933 or the Exchange Act, regardless of the general
incorporation language of such filing, except as shall be expressly set forth by
specific reference in such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
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99.1 Press release, dated February 2, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
POLO RALPH LAUREN CORPORATION
Date: February 2, 2005 By: /s/ Tracey T. Travis
-----------------------------------
Name: Tracey T. Travis
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
99.1 Press release, dated February 2, 2005
EXHIBIT 99.1
------------
================================================================================
P R E S S R E L E A S E
Investor Contact: Denise Gillen 212.318.7516
Media Contact: Nancy Murray 212.813.7862
POLO RALPH LAUREN REPORTS THIRD QUARTER FISCAL 2005 RESULTS
Third Quarter Net Revenues Increased 38%; Retail Comps Up 6.1%:
Operating Profit Up 90% With 350 Basis Point Improvement in Operating Margins
Company Maintains EPS Outlook for Fiscal Year 2005
Initial Outlook for Fiscal Year 2006 Expects Mid-teens Percent Earnings Increase
Company Announces New $100 Million Share Repurchase Program
================================================================================
New York (February 2, 2005) - Polo Ralph Lauren Corporation (NYSE: RL) today
reported net income of $74.8 million, or $0.72 per diluted share, for the third
quarter of Fiscal 2005 ended January 1, 2005, compared to $35.4 million, or
$0.35 per diluted share, for the third quarter of Fiscal 2004.
Adjusted net income was $74.7 million, or $0.72 per diluted share, for the third
quarter of Fiscal 2005 compared to $47.7 million, or $0.47 per diluted share,
for the third quarter of Fiscal 2004. Adjusted results exclude restructuring
charges and the foreign currency effect of certain transactions involving our
European operations. For a full analysis of the adjustments, please refer to the
table reconciliation of GAAP results to adjusted results.
For the first nine months of Fiscal 2005, reported net income increased 79% to
$168.7 million, or $1.63 per diluted share, compared to $94.4 million, or $0.94
per diluted share in the first nine months of Fiscal 2004. Adjusted net income
was $167.7 million, or $1.62 per diluted share, in the first nine months of
Fiscal 2005, compared to $104.2 million, or $1.04 per diluted share, in the
first nine months of Fiscal 2004.
"I am proud of our company and how it continues to perform. We have a unique
business model that stretches from wholesale to retail across many families of
businesses and many geographies," said Ralph Lauren, Chairman and Chief
Executive Officer. "I am excited about how we look today whether it is in Milan
or Aspen. I have always had the same vision for our company - be tuned in to
your customers and be there first."
"Our results show we continually re-ignite our brands with new products and new
markets. We expect to produce another record year next year and we are
positioned for continuous growth beyond that," Mr. Lauren continued.
"We are extremely pleased with our growth and the strength it represents. The
clarity in our strategies and the consistency in our execution have guided our
investments in people and capital. From the acquisition of our children's
licensee to the re-launch of our Lauren business to the completed consolidation
of our European businesses, all support our long-term strategy of building and
growing our brands on a worldwide basis," said Roger Farah, President and Chief
Operating Officer. "The powerful platform we have established is generating
strong profitability and cash flow. Our focused expense and capital spending,
improvements in inventory management and the increased efficiencies generated by
our ongoing infrastructure initiatives have greatly strengthened our balance
sheet for future growth opportunities."
RECENT ACHIEVEMENTS
o In the third quarter comparable retail store sales increased 6.1%
overall. Comparable retail store sales increased 3.4% at Ralph Lauren
stores, 6.7% at Club Monaco stores, and 7.2% in our outlet stores. Our
strategic store expansion plan is on track with the opening of seven
Ralph Lauren stores and three Club Monaco stores in the third quarter
of Fiscal 2005. Additionally, in October we opened our Rugby store in
Boston, a new concept store with a full lifestyle collection targeting
18 to 25 year old men and women customers.
o We have a strong balance sheet and ended the third quarter with $363
million in cash, or $55 million cash net of debt. We continue to make
excellent progress in managing our inventory levels and generated a 44%
increase in wholesale and retail sales in the third quarter with less
than a 1% increase in inventory levels. At the end of the third
quarter, inventory was $425 million, including the women's Lauren by
Ralph Lauren line and childrenswear, compared to $422 million at the
end of the third quarter last year. Our trailing 12-month inventory
turnover improved to 3.8x compared to 3.0x at the end of the third
quarter last year.
o In October we expanded and extended our existing bank credit facility
by entering into a new five-year credit agreement with a syndicate of
banks. The new credit agreement, which is substantially on the same
terms as the prior credit agreement, increased our revolving line of
credit to $450 million, subject to increase to $525 million.
o We paid a regular quarterly dividend of $0.05 per share on Polo Ralph
Lauren Common Stock in January 2005. The dividend was initiated in July
2003, making this the seventh consecutive dividend payment.
o We continued to expand our executive talent with the addition of Tracey
Travis, who joined the Company in January 2005, as Senior Vice
President and Chief Financial Officer. Tracey has responsibility for
corporate finance, financial planning and analysis, treasury, tax and
corporate compliance.
2
THIRD QUARTER INCOME STATEMENT REVIEW
NET REVENUES Net revenues for the third quarter increased 38% to $888.0 million
compared to $645.4 million in the third quarter last year. Our wholesale
revenues were $427.4 million, up 95% over last year, driven by the inclusion of
the women's Lauren by Ralph Lauren line and childrenswear in our wholesale
segment and increased sales in our domestic menswear and European businesses.
Retail sales grew 12% to $402.6 million compared to $359.0 million last year
with comparable store sales up 6.1%. Licensing revenues decreased $9.3 million
due to the absence of royalty income from the previously licensed women's Lauren
by Ralph Lauren and childrenswear businesses. The increase in Fiscal 2005 net
revenues also reflects the favorable impact of the strengthening Euro to dollar
exchange rate.
GROSS PROFIT For the third quarter, gross profit was $438.0 million, an increase
of $105.0 million, or 32%, compared to $333.0 million in the third quarter of
Fiscal 2004. The increased gross profit was generated primarily by the addition
of the women's Lauren by Ralph Lauren line and childrenswear, as well as our
domestic menswear and retail businesses and our European wholesale business. Our
overall gross margin was 49.3% compared to 51.6% last year, reflecting the
above-mentioned reduction in licensing revenue and increase of wholesale versus
retail business mix. The gross margin rate improved in our domestic and European
wholesale businesses and in our retail business.
SG&A EXPENSES Operating expenses as a percent of revenues were 36.4% this year
compared to 42.2% last year, a 580 basis point improvement. In the third
quarter, SG&A expenses were $323.2 million, an increase of $50.7 million, or
19%, compared to $272.5 million in the third quarter of Fiscal 2004. The rate
improvement was achieved by improved infrastructure leverage as well as benefits
from our European consolidation and the change in business mix. The dollar
increase was driven primarily by the inclusion of expenses for Lauren and
childrenswear. SG&A also reflects the unfavorable impact of the strengthening
Euro to dollar exchange rate.
THIRD QUARTER FOREIGN CURRENCY GAINS AND RESTRUCTURING CHARGES
The Company reports all financial results in accordance with U.S. Generally
Accepted Accounting Principles (GAAP), but management believes that the
supplemental presentation of results adjusted to exclude certain items provides
investors with useful information regarding the Company's core business results.
The Company does not suggest that investors should consider adjusted results in
isolation from or as a substitute for financial information prepared in
accordance with GAAP. The company presents such information to provide investors
with an additional tool to evaluate the Company's results. Please see the
attached table, which reconciles net income to net income before restructuring
charge and foreign currency gains and losses.
Adjusted results exclude $0.4 million in foreign currency gains and $3.6 million
in foreign currency losses related to certain balance sheet transactions and
unhedged inventory purchases in our European operations in the third quarter of
Fiscal 2005 and Fiscal 2004, respectively. Adjusted Fiscal 2005 third quarter
results also exclude a pre-tax restructuring charge of $0.2 million related to
operational consolidation efforts in Europe primarily associated with severance
costs. Adjusted Fiscal 2004 third quarter results exclude a pre-tax $15.9
million restructuring charge, including approximately $12.2 million of which
consists of an increase in the reserve for lease termination costs primarily
associated with two Club Monaco properties, which were included in the Company's
2001 Operational Plan and approximately $3.7 million is related to operational
consolidation efforts in Europe associated with severance and contract
termination costs.
STORE COUNT
At the end of the third quarter, we operated 280 stores, with 1.99 million
square feet, compared to 265 stores, with 1.88 million square feet, at the end
of the third quarter last year. Our retail group consisted of 60 Ralph Lauren
stores, one Rugby store, 69 Club Monaco stores, 125 Polo outlet stores, 20 Polo
Jeans Co. outlet stores, and five Club Monaco outlet stores. During the third
quarter we opened eleven stores and closed one.
3
SHARE REPURCHASE PROGRAM
The Company announced today that its Board of Directors has authorized the
repurchase of up to $100 million of our shares, in addition to the remaining $20
million balance of the current program. The Company's current share repurchase
program expires on April 1, 2006. Shares acquired under the repurchase programs
will be used for stock option programs and for other corporate purposes.
EARNINGS OUTLOOK
FOURTH QUARTER FISCAL 2005
The Company expects consolidated revenues in the fourth quarter to increase in
the mid-single digit percent range. We expect that our wholesale revenues will
increase in the high-single-digit percent range as we anniversary the inclusion
of women's Lauren by Ralph Lauren and add childrenswear revenues. We also expect
improved performance in our European wholesale businesses. Retail revenues are
expected to be comparable to last year due to the impact of a 13-week fourth
quarter this year compared to a 14-week fourth quarter last year. In addition,
licensing revenues are expected to decrease in the low-single digit percent
range reflecting the absence of royalties associated with childrenswear.
Although the Company expects a slight improvement in wholesale operating margins
in the fourth quarter, it is expected to be offset by a decrease in licensing
operating margin as well as a decrease in retail operating margins due to
reduced expense leverage resulting from one less week of sales this year
compared to last year.
The Company expects the fourth quarter of Fiscal 2005 to reflect the smallest
quarterly net income increase for the year primarily due to the impact of a
13-week fourth quarter in this fiscal year compared to a 14-week fourth quarter
last year. Earnings per share are expected to be approximately flat to last
year, reflecting approximately 105 million shares outstanding in the fourth
quarter of Fiscal 2005 compared to 102.3 million shares in the prior year's
fourth quarter.
FULL YEAR FISCAL 2006
The Company's initial outlook for Fiscal 2006 is for mid-single-digit percent
consolidated revenue growth. Gross Profit is expected to expand significantly
due to a growing retail business, and SG&A as a percent of revenues is expected
to increase slightly, driving improved operating margins of approximately 100
basis points. The consolidated tax rate is expected to be 35.5% and the Company
expects to have approximately 105 million shares outstanding. Earnings per share
are expected to be in the range of $2.75 to $2.85.
The preliminary annual guidance does not include any impact related to the
expensing of stock options to be made in Fiscal 2006 as required under the new
accounting rules, which the company will implement in Fiscal 2006.
CONFERENCE CALL
As previously announced, we will host a conference call and live online
broadcast today, February 2, 2005 at 9:00 A.M. Eastern. The dial-in number is
1-913-981-5522. The online broadcast is accessible at http://investor.polo.com.
Polo Ralph Lauren Corporation is a leader in the design, marketing and
distribution of premium lifestyle products in four categories: apparel, home,
accessories and fragrances. For more than 35 years, Polo'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 "Polo by Ralph Lauren", "Ralph Lauren Purple Label", "Ralph Lauren",
"Black Label", "Blue Label", "Lauren by Ralph Lauren", "Polo Jeans Co.", "RRL",
"RLX", "Rugby", "RL Childrenswear", "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.polo.com.
4
THIS PRESS RELEASE AND ORAL STATEMENTS MADE FROM TIME TO TIME BY REPRESENTATIVES
OF THE COMPANY CONTAIN CERTAIN "FORWARD-LOOKING STATEMENTS" CONCERNING CURRENT
EXPECTATIONS ABOUT THE COMPANY'S FUTURE RESULTS AND CONDITION, INCLUDING SALES,
STORE OPENINGS, GROSS MARGINS, EXPENSES AND EARNINGS. ACTUAL RESULTS MIGHT
DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. AMONG
THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO MATERIALLY DIFFER INCLUDE, AMONG
OTHERS, CHANGES IN THE COMPETITIVE MARKETPLACE, INCLUDING THE INTRODUCTION OF
NEW PRODUCTS OR PRICING CHANGES BY OUR COMPETITORS, CHANGES IN THE ECONOMY AND
OTHER EVENTS LEADING TO A REDUCTION IN DISCRETIONARY CONSUMER SPENDING; RISKS
ASSOCIATED WITH THE COMPANY'S DEPENDENCE ON SALES TO A LIMITED NUMBER OF LARGE
DEPARTMENT STORE CUSTOMERS, INCLUDING RISKS RELATED TO EXTENDING CREDIT TO
CUSTOMERS; RISKS ASSOCIATED WITH THE COMPANY'S DEPENDENCE ON ITS LICENSING
PARTNERS FOR A SUBSTANTIAL PORTION OF ITS NET INCOME AND RISKS ASSOCIATED WITH A
LACK OF OPERATIONAL AND FINANCIAL CONTROL OVER LICENSED BUSINESSES; RISKS
ASSOCIATED WITH CHANGES IN SOCIAL, POLITICAL, ECONOMIC AND OTHER CONDITIONS
AFFECTING FOREIGN OPERATIONS OR SOURCING (INCLUDING FOREIGN EXCHANGE
FLUCTUATIONS) AND THE POSSIBLE ADVERSE IMPACT OF CHANGES IN IMPORT RESTRICTIONS;
RISKS ASSOCIATED WITH UNCERTAINTY RELATING TO THE COMPANY'S ABILITY TO IMPLEMENT
ITS GROWTH STRATEGIES OR ITS ABILITY TO SUCCESSFULLY INTEGRATE ACQUIRED
BUSINESSES; RISKS ARISING OUT OF LITIGATION OR TRADEMARK CONFLICTS, AND OTHER
RISK FACTORS IDENTIFIED IN THE COMPANY'S FORM 10-K, 10-Q AND 8-K REPORTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO
OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS TO REFLECT
SUBSEQUENT EVENTS OR CIRCUMSTANCES.
Attached are the Consolidated Statements of Income and Net Revenues and Income
from Operations for the nine-month and three-month periods ended January 1, 2005
and December 27, 2003 and the Consolidated Balance Sheets as of January 1, 2005
and December 27, 2003.
# # # #
Tables Follow
5
POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
NINE MONTHS ENDED
------------------------------
JANUARY 1, DECEMBER 27,
2005 2003
------------- -------------
Wholesale Net Sales $ 1,169,032 $ 716,877
Retail Net Sales 1,018,375 910,584
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NET SALES 2,187,407 1,627,461
Licensing Revenue 177,016 203,412
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NET REVENUES 2,364,423 1,830,873
Cost of Goods Sold 1,181,535 898,553
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GROSS PROFIT 1,182,888 932,320
Depreciation and Amortization 71,958 59,103
Other SG&A Expenses 849,973 708,350
Restructuring Charge 1,846 15,930
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TOTAL SG&A EXPENSES 923,777 783,383
Income From Operations 259,111 148,937
Foreign Currency Gains (3,334) (531)
Interest Expense, net 5,671 7,624
------------- -------------
Income Before Income Taxes and Other (Income) Expense 256,774 141,844
Provision for Income Taxes 91,342 51,773
------------- -------------
Income after Tax 165,432 90,071
Other (Income) Expense, net (A) (3,220) (4,352)
------------- -------------
NET INCOME $ 168,652 $ 94,423
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NET INCOME PER SHARE - BASIC $ 1.67 $ 0.96
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NET INCOME PER SHARE - DILUTED $ 1.63 $ 0.94
============= =============
Weighted Average Shares Outstanding - Basic 101,190,000 98,718,000
============= =============
Weighted Average Shares & Share Equivalents Outstanding - Diluted 103,566,000 100,403,000
============= =============
DIVIDENDS DECLARED PER SHARE $ 0.15 $ 0.15
============= =============
(A) Includes Equity Investment Income of $5,782 and $5,477 net of
Minority Interest Expense of $3,207 and $1,125 for FY05 and FY04,
respectively. Also included in FY05 is $645 of Dividend Income.
POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
The following is a reconciliation of Net Income to Net Income Before
Restructuring Charge and Foreign Currency Gains:
NINE MONTHS ENDED
------------------------
JANUARY 1, DECEMBER 27,
2005 2003
------------------------
Net Income $ 168,652 $ 94,423
Other Income, net (3,220) (4,352)
Provision for Income Taxes 91,342 51,773
--------- ---------
Income before Income Taxes and Other (Income) Expense 256,774 141,844
Restructuring Charge 1,846 15,930
Foreign Currency Gains (3,334) (531)
--------- ---------
Income Before Income Taxes, Other (Income) Expense, Restructuring Charge
and Foreign Currency Gains 255,286 157,243
Provision for Income Taxes 90,824 57,394
Other Income, net (3,220) (4,352)
--------- ---------
Net Income Before Restructuring Charge and Foreign Currency Gains $ 167,682 $ 104,201
========= =========
NET INCOME PER SHARE BEFORE RESTRUCTURING CHARGE
AND FOREIGN CURRENCY GAINS - BASIC $ 1.66 $ 1.06
========= =========
NET INCOME PER SHARE BEFORE RESTRUCTURING CHARGE
AND FOREIGN CURRENCY GAINS - DILUTED $ 1.62 $ 1.04
========= =========
POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
------------------------------
JANUARY 1, DECEMBER 27,
2005 2003
------------------------------
Wholesale Net Sales $ 427,445 $ 219,147
Retail Net Sales 402,613 358,984
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NET SALES 830,058 578,131
Licensing Revenue 57,935 67,234
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NET REVENUES 887,993 645,365
Cost of Goods Sold 449,960 312,363
------------- -------------
GROSS PROFIT 438,033 333,002
Depreciation and Amortization 26,096 18,602
Other SG&A Expenses 296,885 238,012
Restructuring Charge 218 15,930
------------- -------------
TOTAL SG&A EXPENSES 323,199 272,544
Income From Operations 114,834 60,458
Foreign Currency (Gains) Losses (400) 3,552
Interest Expense, net 1,996 2,510
------------- -------------
Income Before Income Taxes and Other (Income) Expense 113,238 54,396
Provision for Income Taxes 40,199 19,854
------------- -------------
Income after Tax 73,039 34,542
Other (Income) Expense, net (A) (1,803) (816)
------------- -------------
NET INCOME $ 74,842 $ 35,358
============= =============
NET INCOME PER SHARE - BASIC $ 0.73 $ 0.36
============= =============
NET INCOME PER SHARE - DILUTED $ 0.72 $ 0.35
============= =============
Weighted Average Shares Outstanding - Basic 101,896,000 99,072,000
============= =============
Weighted Average Shares & Share Equivalents Outstanding - Diluted 104,325,000 101,291,000
============= =============
DIVIDENDS DECLARED PER SHARE $ 0.05 $ 0.05
============= =============
(A) Includes Equity Investment Income of $2,607 and $1,027 net of
Minority Interest Expense of $804 and $211 for Q3 FY05 and Q3 FY04,
respectively.
POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
The following is a reconciliation of Net Income to Net Income Before
Restructuring Charge and Foreign Currency (Gains) Losses:
THREE MONTHS ENDED
------------------------
JANUARY 1, DECEMBER 27,
2005 2003
------------------------
Net Income $ 74,842 $ 35,358
Other (Income) Expense, net (1,803) (816)
Provision for Income Taxes 40,199 19,854
--------- ---------
Income before Income Taxes and Other (Income) Expense 113,238 54,396
Restructuring Charge 218 15,930
Foreign Currency (Gains) Losses (400) 3,552
--------- ---------
Income Before Income Taxes, Other (Income) Expense, Restructuring Charge
and Foreign Currency (Gains) Losses 113,056 73,878
Provision for Income Taxes 40,135 26,965
Other (Income) Expense, net (1,803) (816)
--------- ---------
Net Income Before Restructuring Charge and Foreign Currency (Gains) Losses $ 74,724 $ 47,729
========= =========
NET INCOME PER SHARE BEFORE RESTRUCTURING CHARGE
AND FOREIGN CURRENCY (GAINS) LOSSES - BASIC $ 0.73 $ 0.48
========= =========
NET INCOME PER SHARE BEFORE RESTRUCTURING CHARGE
AND FOREIGN CURRENCY (GAINS) LOSSES - DILUTED $ 0.72 $ 0.47
========= =========
POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
JANUARY 1, DECEMBER 27,
2005 2003
---------------------------
ASSETS
Current assets
Cash and cash equivalents $ 362,931 $ 337,703
Accounts receivable, net of allowances 334,347 292,248
Inventories 425,071 422,248
Deferred tax assets 36,008 31,078
Prepaid expenses and other 105,767 88,017
----------- -----------
1,264,124 1,171,294
Property and equipment, net 467,340 372,721
Deferred tax assets 52,851 58,583
Goodwill, net 597,987 335,646
Intangibles, net 18,377 17,950
Other assets 189,369 174,964
----------- -----------
$ 2,590,048 $ 2,131,158
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 154,447 $ 167,322
Income taxes payable 71,663 54,846
Accrued expenses and other 303,149 256,836
----------- -----------
529,259 479,004
Long-term debt 307,981 284,746
Other noncurrent liabilities 99,601 76,383
Stockholders' equity
Common Stock 1,080 1,044
Additional paid-in-capital 647,721 538,089
Retained earnings 1,079,467 855,890
Treasury Stock, Class A, at cost (4,177,600 and 4,145,800 shares) (80,027) (78,975)
Accumulated other comprehensive income (loss) 39,559 (8,981)
Unearned compensation (34,593) (16,042)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,653,207 1,291,025
----------- -----------
$ 2,590,048 $ 2,131,158
=========== ===========
POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES
NET REVENUES AND INCOME FROM OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
The net revenues and income from operations for the periods ended January 1,
2005 and December 27, 2003 for each segment were as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
January 1, December 27, January 1, December 27,
2005 2003 2005 2003
----------- ------------ ----------- ------------
Net revenues:
Wholesale $ 427,445 $ 219,147 $ 1,169,032 $ 716,877
Retail 402,613 358,984 1,018,375 910,584
Licensing 57,935 67,234 177,016 203,412
----------- ----------- ----------- -----------
$ 887,993 $ 645,365 $ 2,364,423 $ 1,830,873
=========== =========== =========== ===========
Income (Loss) from operations:
Wholesale $ 47,653 $ (3,330) $ 110,566 $ (8,921)
Retail 49,459 45,411 101,005 77,731
Licensing 17,940 34,307 49,386 96,057
----------- ----------- ----------- -----------
$ 115,052 $ 76,388 $ 260,957 $ 164,867
Less: Unallocated Restructuring Charge 218 15,930 1,846 15,930
----------- ----------- ----------- -----------
114,834 60,458 $ 259,111 $ 148,937
=========== =========== =========== ===========