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)  November 5, 2008

 

 

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):

 

 

 

On November 5, 2008, Polo Ralph Lauren Corporation (the “Company”) reported its results of operations for the fiscal quarter ended September 27, 2008. A copy of the press release issued by the Company concerning the foregoing 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, as amended, 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.

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

EXHIBIT INDEX

 

 

 

 

 

 

EXHIBIT 99.1

 

 

Polo Ralph Lauren Reports Second Quarter Fiscal 2009 Results

 

 

New York -- (BUSINESS WIRE) – November 5, 2008—Polo Ralph Lauren Corporation today reported net income of $161 million, or $1.58 per diluted share, for the second quarter of Fiscal 2009, compared to net income of $115 million, or $1.09 per diluted share, for the second quarter of Fiscal 2008. The second quarter results reflect a 10% increase in net revenues, operating income growth of 26% and a 40% increase in net income, which includes the benefit of a lower effective tax rate compared to the prior year period.

 

Net income for the first six months of Fiscal 2009 increased 26% to $256 million, compared to $204 million in the comparable period last fiscal year. The growth in net income for the year-to-date period reflects a 7% increase in net revenues, operating income that is 15% greater than the prior year period and a lower effective tax rate. Net income per diluted share increased 31% to $2.51 from $1.92 in the first six months last year.

 

“Our strong performance for the first six months of the year confirms that we are on the right strategic course,” said Ralph Lauren, Chairman and Chief Executive Officer. “While global uncertainty is a reality that we will likely be living with for some time, the desirability of our brand and products continues to expand worldwide. Our business has endured through good times and bad over the last forty years and we’ve always emerged stronger from any challenge,” Mr. Lauren added.

 

“I am proud of our year-to-date operating results, which have exceeded our expectations,” said Roger Farah, President and Chief Operating Officer. “The domestic retail environment has been challenging for the last year. Those challenges have begun to materialize around the world and they have intensified recently, creating an environment of unprecedented volatility. Nevertheless, we remain committed to our long-term strategic growth initiatives, which are supported by the strength of our balance sheet and world-class global management capabilities.”

 

Second Quarter and First Half Fiscal 2009 Income Statement Review

 

Net Revenues. Net revenues for the second quarter increased 10% to $1.43 billion, compared to $1.30 billion for the comparable period last year. The higher net revenues primarily reflect shipments of new products, growth in global retail sales and higher European wholesale revenues.

 

 

 

First half net revenues grew 7% to $2.54 billion from $2.37 billion in the comparable period of Fiscal 2008. The growth in net revenues is primarily attributable to shipments of new products, global retail sales growth and higher European wholesale sales.

 

 

For the first six months of the fiscal year, wholesale sales increased 6% to $1.42 billion from $1.35 billion in the first half of Fiscal 2008. The year-over-year increase in wholesale revenue is attributable to new product shipments and higher European sales that more than offset a decline in domestic shipments of our core men’s, women’s and childrenswear products.

 

 

Retail sales in the first half were up 11% to $1.02 billion compared to $924 million in the first half last fiscal year, reflecting comparable store sales growth and revenues from new stores. Total comparable store sales for the first half of Fiscal 2009 were up 4.6%, comprised of a 3.1% increase at Ralph Lauren stores, 5.9% at factory stores and a 0.3% decline at Club Monaco. RalphLauren.com sales grew 25% over the comparable six month period last year.

 

 

Licensing royalties in the first half were down 1% to $99 million compared to $100 million in the prior year period as new product licenses and growth in domestic Polo men’s underwear were offset by a decline in Japanese product licensing royalties associated with the Company assuming direct control of certain product categories in Japan.

 

Gross Profit. Gross profit for the second quarter increased 13% to $788 million, compared to $695 million in the second quarter of Fiscal 2008. The gross profit rate increased 170 basis points to 55.2%, compared to 53.5% during the same period last year. The growth in gross profit and the expansion in gross profit rate reflect the higher sales mentioned previously, the decline in purchase accounting amortization from last year’s acquisitions and stronger margins for many of our core apparel products.

 

 

 

 

Gross profit for the first half of Fiscal 2009 increased 11% to $1.43 billion compared to $1.29 billion in the comparable period last year. First half gross profit margin of 56.1% was 180 basis points greater than the prior year, primarily due to higher international sales, a decline in purchase price amortization associated with last year’s acquisitions and stronger margins for many of our core apparel products.

 

Operating Expenses. Operating expenses increased 8% in the second quarter to $545 million, compared to $503 million in the second quarter of Fiscal 2008. Operating expenses as a percent of revenues were 38.2%, 50 basis points below last year, primarily due to revenue growth and lower purchase accounting amortization that was partially offset by operating expenses at newly acquired and emerging businesses and occupancy costs for unopened stores.

 

Operating expenses in the first half of Fiscal 2009 increased 9% to $1.04 billion from $949 million in the year-earlier period. Operating expense margin was 40.8%, 80 basis points greater than that of the first half of Fiscal 2008, primarily due to operating expenses at newly acquired and emerging businesses as well as occupancy costs for unopened stores that more than offset the benefit of higher sales and lower purchase accounting amortization.

 

Operating Income. Operating income for the second quarter rose 26% to $243 million, compared to $193 million for the second quarter last year. The operating margin was 17.0%, compared to 14.8% in the second quarter last year, representing a 220 basis point improvement, primarily due to lower purchase accounting amortization, the profit contribution from new products and leverage on unallocated corporate expenses.

 

For the first half of Fiscal 2009, operating income increased 15% to $390 million compared to $338 million in the first half of Fiscal 2008. Operating margin expanded 100 basis points to 15.3% for the first half of Fiscal 2009 from 14.3% last year, primarily due to lower purchase accounting amortization compared to the prior year period, the profit contribution from new products and leverage on unallocated corporate expenses.

 

 

Wholesale operating income increased 13% in the first half to $319 million compared to $283 million in the first half last year. Wholesale operating margin for the first half of Fiscal 2009 was 22.5%, 140 basis points greater than the 21.1% reported for the first half last year, primarily driven by higher revenues and lower purchase accounting amortization that was partially offset by expenses at newly acquired and emerging businesses.

 

 

SOURCE: Polo Ralph Lauren Corporation

 

 

 

POLO RALPH LAUREN CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

 

 

POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Prepared in accordance with Generally Accepted Accounting Principles (GAAP)

(In millions, except per share data)

(Unaudited)

 

 

 

POLO RALPH LAUREN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Prepared in accordance with Generally Accepted Accounting Principles (GAAP)

(In millions, except per share data)

(Unaudited)

 

 

 

POLO RALPH LAUREN CORPORATION

OTHER INFORMATION

(In millions)

(Unaudited)