- Delivered First Quarter Revenue Growth of 8% on a Reported
Basis and 13% on a Constant Currency Basis, Ahead of Expectations
Driven by Strong Growth Across All Regions and a Mid-Teens
Comparable Store Sales Increase
- First Quarter Adjusted Operating Margin of 12.7% Exceeded
Outlook with Operating Expense Discipline More Than Offsetting
Higher Freight Costs to Fulfill Stronger Consumer Demand
- Continued to Drive Investments in Key Strategic Priorities
While Returning Cash to Shareholders Through Dividends as well as
Repurchase of $213 Million of Class A Common Stock in the
Quarter
- Reiterated Full Year Fiscal 2023 Outlook of High-Single Digit
Net Revenue Growth and Adjusted Operating Margin of Approximately
14.0% to 14.5%, Both in Constant Currency
- Continued Board Refreshment with Election of Deb Cupp,
President of Microsoft North America, to Board of Directors
Ralph Lauren Corporation (NYSE:RL), a global leader in the
design, marketing, and distribution of premium lifestyle products,
today reported earnings per diluted share of $1.73 on a reported
basis and $1.88 on an adjusted basis, excluding
restructuring-related and other net charges for the first quarter
of Fiscal 2023. This compared to earnings per diluted share of
$2.18 on a reported basis and $2.29 on an adjusted basis, excluding
restructuring-related and other net charges for the first quarter
of Fiscal 2022.
"Our vision of timelessness and an authentic life well-lived
continues to resonate around the world," said Ralph Lauren,
Executive Chairman and Chief Creative Officer. "From the elegant
spirit of Wimbledon to the anniversary celebration of our iconic
Polo Shirt, our brand is inspiring people to step into their
dreams."
"Our strong first quarter performance underscores the power of
our brand and momentum of our strategy around the world, following
our significant multi-year reset," said Patrice Louvet, President
and Chief Executive Officer. "While the global operating
environment remains as volatile as ever, our talented, passionate
teams are delivering on the multiple growth opportunities to scale
our business with creativity and discipline — from driving
high-quality new consumer recruitment to expanding digital and
elevating our touch points in every region and channel."
Key Achievements in First Quarter Fiscal 2023
We delivered the following highlights across our strategic
priorities in the first quarter of Fiscal 2023:
- Win Over a New Generation of Consumers
- Delivered strong consumer metrics including increased global
brand consideration, purchase intent and net promoter scores led by
North America through an engaging mix of purpose-led and
performance marketing investments
- Continued to drive high value new consumer acquisition through
key brand and celebrity moments including our 360° spring campaign
and book launch celebrating the 50th anniversary of our iconic Polo
Shirt; our sponsorship of the Wimbledon Championships; and Gilded
Glamour celebrity dressing at the Met Gala
- Energize Core Products and Accelerate Under-Developed
Categories
- Delivered a compelling Spring assortment through an elevated
hybrid of casual and sophisticated dressing — both core to the
Ralph Lauren brand. Continued momentum in both core and
high-potential categories, led by our polo shirts, bottoms,
sneakers and sweaters
- Product launches and special releases included our global polo
shirt campaign activations including our limited-edition vintage
Upcycled Polo Shirts; Cobble Hill, celebrating our tradition of
refined sportswear; Athletic Club, an updated take on tennis and
golf inspired styling for the Next Generation; and our first-ever
unisex Stirrup eyewear collection
- Brand elevation continues with average unit retail ("AUR") up
8% across our direct-to-consumer network in the first quarter, on
top of an 18% increase last year, driven by a strong product
offering and promotional discipline
- Drive Targeted Expansion in Our Regions and Channels
- Delivered strong revenue growth across every region in the
quarter led by better than expected performance in North America up
6% and Europe up 28% in constant currency
- Asia revenues also grew 26% to last year in constant currency
despite COVID lockdowns negatively impacting approximately 50% of
our China stores in the quarter
- Lead With Digital
- Total Ralph Lauren digital ecosystem revenues grew
low-double-digits to last year in the first quarter, on top of an
exceptionally strong comparison of more than 80% last year.
Operating margin in both our owned and wholesale digital channels
continued to significantly benefit the total Company margin
rate
- Launched additional digital sites in key markets globally
including India and Israel in the first quarter
- Operate With Discipline to Fuel Growth
- First quarter adjusted operating margin was 12.7%, exceeding
our outlook of approximately 12.2% as operating expense discipline
helped to mitigate higher planned marketing investments and higher
freight costs to support strong consumer demand in the period
- Inventories remain well positioned to support Fiscal 2023
product elevation and growth plans by region and as we deliberately
shift inventory receipts earlier to mitigate global supply chain
disruptions
- Continued progress on our citizenship and sustainability
journey including: the announcement of our first Cradle-to-Cradle
certified product with our iconic luxury cashmere crewneck sweater;
and new Live On Promise to enable our past and future products to
live on responsibly by 2030
First Quarter Fiscal 2023 Income Statement Review
Net Revenue. In the first quarter of Fiscal 2023, revenue
increased by 8% to $1.5 billion on a reported basis and was up 13%
in constant currency. Foreign currency negatively impacted revenue
growth by approximately 510 basis points in the first quarter.
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 increased 6% to $701 million. In retail, comparable store
sales in North America were up 5%, with a 5% increase in brick and
mortar stores and a 2% increase in digital commerce. North America
wholesale revenue increased 5%.
- Europe Revenue. Europe revenue in the first quarter increased
17% to $416 million on a reported basis and increased 28% in
constant currency. In retail, comparable store sales in Europe were
up 34%, with a 45% increase in brick and mortar stores and a 7%
increase in digital commerce. Europe wholesale revenue increased 8%
on a reported basis and increased 20% in constant currency.
- Asia Revenue. Asia revenue in the first quarter increased 16%
to $334 million on a reported basis and 26% in constant currency.
Comparable store sales in Asia increased 19%, with a 17% increase
in our brick and mortar stores and a 37% increase in digital
commerce.
Gross Profit. Gross profit for the first quarter of
Fiscal 2023 was $1.0 billion and gross margin was 67.2%. Adjusted
gross margin was 68.0%, 180 basis points below the prior year on a
reported basis and down 80 basis points in constant currency, with
better pricing and promotions more than offset by increased freight
headwinds to mitigate global supply chain delays. Compared to first
quarter Fiscal 2020, adjusted gross margins expanded 350 basis
points on strong AUR growth.
Operating Expenses. Operating expenses in the first
quarter of Fiscal 2023 were $826 million on a reported basis. On an
adjusted basis, operating expenses were $823 million, up 13% to
last year, primarily driven by a normalized quarterly cadence of
marketing investments as well as higher compensation and selling
expenses to fuel both near- and long-term strategic growth.
Adjusted operating expense rate was 55.2%, compared to 53.0% in the
prior year period.
Operating Income. Operating income for the first quarter
of Fiscal 2023 was $175 million and operating margin was 11.8% on a
reported basis. Adjusted operating income was $190 million and
operating margin was 12.7%, 410 basis points below the prior year.
Operating income for the Company's reportable segments in the first
quarter compared to the prior year period was as follows:
- North America Operating Income. North America operating income
in the first quarter was $133 million on a reported basis and $142
million on an adjusted basis. Adjusted North America operating
margin was 20.2%, down 670 basis points to last year, driven by a
planned increase in marketing investments and freight expense in
the quarter to offset global supply chain disruptions.
- Europe Operating Income. Europe operating income in the first
quarter was $73 million on a reported basis and $74 million on an
adjusted basis. Adjusted Europe operating margin was 17.7%, down
870 basis points to last year, driven by increased foreign currency
headwinds, freight expenses and marketing investments in the
quarter. Foreign currency negatively impacted adjusted operating
margin rate by 330 basis points in the first quarter.
- Asia Operating Income. Asia operating income in the first
quarter was $79 million on both a reported basis and an adjusted
basis. Adjusted Asia operating margin was 23.5%, up 220 basis
points to last year. Foreign currency negatively impacted adjusted
operating margin rate by 40 basis points in the first quarter.
Net Income and EPS. Net income in the first quarter of
Fiscal 2023 was $123 million, or $1.73 per diluted share on a
reported basis. On an adjusted basis, net income was $135 million,
or $1.88 per diluted share. This compared to net income of $165
million, or $2.18 per diluted share on a reported basis, and a net
income of $172 million, or $2.29 per diluted share on an adjusted
basis, for the first quarter of Fiscal 2022.
In the first quarter of Fiscal 2023, the Company had an
effective tax rate of approximately 24% on both a reported basis
and an adjusted basis. This compared to an effective tax rate of
approximately 22% on both a reported basis and an adjusted basis in
the prior year period.
Balance Sheet and Cash Flow Review
The Company ended the first quarter of Fiscal 2023 with $1.8
billion in cash and short-term investments and $1.1 billion in
total debt, compared to $3.0 billion and $1.6 billion,
respectively, at the end of the first quarter of Fiscal 2022.
Inventory at the end of the first quarter of Fiscal 2023 was
$1.2 billion, up 47% compared to the prior year period. Inventory
growth primarily reflected higher increases in goods-in-transit to
mitigate global supply chain delays and meet strong consumer demand
along with continued elevation in product mix.
The Company repurchased approximately $213 million of Class A
Common Stock in the first quarter.
Full Year Fiscal 2023 and Second Quarter Outlook
The Company's outlook is based on its best assessment of the
current macroeconomic environment, including ongoing global supply
chain and inflationary pressures, foreign currency volatility, the
war in Ukraine, COVID-19 variants and other COVID-related
disruptions. The full year Fiscal 2023 and second quarter guidance
excludes restructuring-related and other net charges, as described
in the "Non-U.S. GAAP Financial Measures" section of this press
release.
For Fiscal 2023, the Company continues to expect constant
currency revenues to increase approximately high single digits to
last year on a 52-week comparable basis, with our outlook centered
around 8%. Based on current exchange rates, foreign currency is now
expected to negatively impact revenue growth by approximately 600
basis points in Fiscal 2023. On a 53-week comparable basis, Fiscal
2023 revenue growth is still expected to be negatively impacted by
approximately 100 basis points due to the absence of the 53rd week
compared to the prior year.
The Company continues to expect operating margin for Fiscal 2023
in a range of approximately 14.0% to 14.5% in constant currency.
Foreign currency is now expected to negatively impact operating
margin by approximately 180 basis points in Fiscal 2023. This
compares to operating margin of 13.1% on a 52-week comparable basis
and 13.4% on a 53-week basis in the prior year, both on a reported
basis. Gross margin is still expected to increase approximately 30
to 50 basis points in constant currency on a 52-week comparable
basis, with stronger AUR and favorable product mix more than
offsetting higher freight and product cost inflation. Foreign
currency is expected to negatively impact gross margins by
approximately 150 basis points in Fiscal 2023.
For the second quarter, the Company expects revenue growth to be
in a range centered around 11% in constant currency to last year.
Foreign currency is expected to negatively impact revenue growth by
approximately 750 basis points. The second quarter outlook reflects
continued caution around consumer sentiment.
Operating margin for the second quarter is expected to be in a
range of 15.4% to 15.7% in constant currency, reflecting a
continuation of higher freight and marketing expenses, which are
expected to normalize in the second half of the year when the
Company laps cost increases from the prior year. Foreign currency
is expected to negatively impact second quarter operating margin by
approximately 240 basis points in the second quarter. Gross margin
is expected to contract 40 to 80 basis points to last year in
constant currency with continued AUR growth more than offset by
increases in freight and product costs. Foreign currency is
expected to negatively impact gross margins by approximately 190
basis points in the second quarter.
Second quarter and full year Fiscal 2023 tax rates are both
expected to be in the range of 25% to 26%, assuming a continuation
of current tax laws.
The Company continues to plan capital expenditures for Fiscal
2023 of approximately $290 million to $310 million.
Conference Call
As previously announced, the Company will host a conference call
and live online webcast today, Tuesday, August 9, 2022, at 9:00
A.M. Eastern. Listeners may access a live broadcast of the
conference call on the Company's investor relations website at
http://investor.ralphlauren.com or by dialing 517-623-4963 or
800-857-5209. To access the conference call, listeners should dial
in by 8:45 a.m. Eastern and request to be connected to the Ralph
Lauren First Quarter 2023 conference call.
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 P.M. Eastern, Tuesday, August 9, 2022
through 6:00 P.M. Eastern, Tuesday, August 16, 2022 by dialing
203-369-3826 or 800-813-5529 and entering passcode 6982.
ABOUT RALPH LAUREN
Ralph Lauren Corporation (NYSE:RL) is a global leader in the
design, marketing and distribution of premium lifestyle products in
five categories: apparel, footwear & accessories, home,
fragrances and hospitality. For more than 50 years, Ralph Lauren
has sought to inspire the dream of a better life through
authenticity and timeless style. Its reputation and distinctive
image have been developed across a wide range of products, brands,
distribution channels and international markets. The Company’s
brand names — which include Ralph Lauren, Ralph Lauren Collection,
Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren
Ralph Lauren, Polo Ralph Lauren Children and Chaps, among others —
constitute one of the world’s most widely recognized families of
consumer brands. For more information, go to
https://investor.ralphlauren.com.
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, quarterly cash
dividend and Class A common stock repurchase programs, and
environmental, social, and governance goals and are indicated by
words or phrases such as "anticipate," "outlook," "estimate,"
"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. 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. Ralph Lauren, or other changes in our executive and
senior management team or to our operating structure, including
those resulting from the recent reduction to our global workforce
in connection with our long-term growth strategy, and our ability
to effectively transfer knowledge and maintain adequate controls
and procedures during periods of transition; the impact to our
business resulting from the COVID-19 pandemic, including periods of
reduced operating hours and capacity limits and/or temporary
closure of our stores, distribution centers, and corporate
facilities, as well as those of our customers, suppliers, and
vendors, and potential changes to consumer behavior, spending
levels, and/or shopping preferences, such as willingness to
congregate in shopping centers or other populated locations; the
potential impact to our business resulting from inflationary
pressures, including increases in the costs of raw materials,
transportation, wages, healthcare, and other benefit-related costs;
the impact of economic, political, and other conditions on us, our
customers, suppliers, vendors, and lenders, including potential
business disruptions related to the war between Russia and Ukraine,
civil and political unrest, and diplomatic tensions between the
U.S. and other countries; the potential impact to our business
resulting from supply chain disruptions, including those caused by
capacity constraints, closed factories and/or labor shortages
(stemming from pandemic diseases, labor disputes, strikes, or
otherwise), scarcity of raw materials, and port congestion, which
could result in inventory shortages and lost sales; our ability to
effectively manage inventory levels and the increasing pressure on
our margins in a highly promotional retail environment; our
exposure to currency exchange rate fluctuations from both a
transactional and translational perspective; our ability to recruit
and retain employees to operate our retail stores, distribution
centers, and various corporate functions; the impact to our
business resulting from changes in consumers' ability, willingness,
or preferences to purchase discretionary items and luxury retail
products, which tends to decline during recessionary periods, and
our ability to accurately forecast consumer demand, the failure of
which could result in either a build-up or shortage of inventory;
our ability to successfully implement our long-term growth
strategy; our ability to continue to expand and grow our business
internationally and the impact of related changes in our customer,
channel, and geographic sales mix as a result, as well as our
ability to accelerate growth in certain product categories; our
ability to open new retail stores and concession shops, as well as
enhance and expand our digital footprint and capabilities, all in
an effort to expand our direct-to-consumer presence; our ability to
respond to constantly changing fashion and retail trends and
consumer demands in a timely manner, develop products that resonate
with our existing customers and attract new customers, and execute
marketing and advertising programs that appeal to consumers; our
ability to competitively price our products and create an
acceptable value proposition for consumers; our ability to continue
to maintain our brand image and reputation and protect our
trademarks; our ability to achieve our goals regarding
environmental, social, and governance practices, including those
related to climate change and our human capital; our ability and
the ability of our third-party service providers to secure our
respective facilities and systems from, among other things,
cybersecurity breaches, acts of vandalism, computer viruses,
ransomware, or similar Internet or email events; our efforts to
successfully enhance, upgrade, and/or transition our global
information technology systems and digital commerce platforms; the
potential impact to our business if any of our distribution centers
were to become inoperable or inaccessible; the potential impact on
our operations and on our suppliers and customers resulting from
man-made or natural disasters, including pandemic diseases such as
COVID-19, severe weather, geological events, and other catastrophic
events; our ability to achieve anticipated operating enhancements
and cost reductions from our restructuring plans, as well as the
impact to our business resulting from restructuring-related
charges, which may be dilutive to our earnings in the short term;
the impact to our business resulting from potential costs and
obligations related to the early or temporary closure of our stores
or termination of our long-term, non-cancellable leases; our
ability to maintain adequate levels of liquidity to provide for our
cash needs, including our debt obligations, tax obligations,
capital expenditures, and potential payment of dividends and
repurchases of our Class A common stock, as well as the ability of
our customers, suppliers, vendors, and lenders to access sources of
liquidity to provide for their own cash needs; the potential impact
to our business resulting from the financial difficulties of
certain of our large wholesale customers, which may result in
consolidations, liquidations, restructurings, and other ownership
changes in the retail industry, as well as other changes in the
competitive marketplace, including the introduction of new products
or pricing changes by our competitors; our ability to access
capital markets and maintain compliance with covenants associated
with our existing debt instruments; a variety of legal, regulatory,
tax, political, and economic risks, including risks related to the
importation and exportation of products which our operations are
currently subject to, or may become subject to as a result of
potential changes in legislation, and other risks associated with
our international operations, such as compliance with the Foreign
Corrupt Practices Act or violations of other anti-bribery and
corruption laws prohibiting improper payments, and the burdens of
complying with a variety of foreign laws and regulations, including
tax laws, trade and labor restrictions, and related laws that may
reduce the flexibility of our business; the potential impact to our
business resulting from the imposition of additional duties,
tariffs, taxes, and other charges or barriers to trade, including
those resulting from trade developments between the U.S. and China,
and any related impact to global stock markets, as well as our
ability to implement mitigating sourcing strategies; changes in our
tax obligations and effective tax rate due to a variety of factors,
including potential changes in U.S. or foreign tax laws and
regulations, accounting rules, or the mix and level of earnings by
jurisdiction in future periods that are not currently known or
anticipated; the impact to our business of events of unrest and
instability that are currently taking place in certain parts of the
world, as well as from any terrorist action, retaliation, and the
threat of further action or retaliation; the potential impact to
the trading prices of our securities if our operating results,
Class A common stock share repurchase activity, and/or cash
dividend payments differ from investors' expectations; our ability
to maintain our credit profile and ratings within the financial
community; our intention to introduce new products or brands, or
enter into or renew alliances; changes in the business of, and our
relationships with, major wholesale customers and licensing
partners; our ability to make strategic acquisitions and
successfully integrate the acquired businesses into our existing
operations; and other risk factors identified in the Company’s
Annual Report on Form 10-K, Form 10-Q and Form 8-K reports filed
with the Securities and Exchange Commission. The Company undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
RALPH LAUREN
CORPORATION
CONSOLIDATED BALANCE
SHEETS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
July 2, 2022
April 2, 2022
June 26, 2021
(millions)
ASSETS
Current assets:
Cash and cash equivalents
$
1,456.8
$
1,863.8
$
2,596.4
Short-term investments
320.1
734.6
368.0
Accounts receivable, net of allowances
350.4
405.4
367.2
Inventories
1,178.2
977.3
803.0
Income tax receivable
54.8
63.7
57.8
Prepaid expenses and other current
assets
217.2
172.5
185.8
Total current assets
3,577.5
4,217.3
4,378.2
Property and equipment, net
931.4
969.5
974.6
Operating lease right-of-use assets
1,054.5
1,111.3
1,181.3
Deferred tax assets
262.9
303.8
290.2
Goodwill
886.5
908.7
937.8
Intangible assets, net
99.0
102.9
116.6
Other non-current assets
139.3
111.2
83.2
Total assets
$
6,951.1
$
7,724.7
$
7,961.9
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
—
$
499.8
$
498.7
Accounts payable
562.1
448.7
370.3
Current income tax payable
50.1
53.8
60.9
Current operating lease liabilities
247.2
262.0
284.1
Accrued expenses and other current
liabilities
886.0
991.4
899.3
Total current liabilities
1,745.4
2,255.7
2,113.3
Long-term debt
1,137.0
1,136.5
1,135.0
Long-term finance lease liabilities
331.9
341.6
363.4
Long-term operating lease liabilities
1,075.9
1,132.2
1,231.1
Non-current income tax payable
98.9
98.9
118.7
Non-current liability for unrecognized tax
benefits
86.5
91.9
97.4
Other non-current liabilities
111.4
131.9
185.3
Total liabilities
4,587.0
5,188.7
5,244.2
Equity:
Common stock
1.3
1.3
1.3
Additional paid-in-capital
2,767.0
2,748.8
2,685.5
Retained earnings
6,347.3
6,274.9
5,987.1
Treasury stock, Class A, at cost
(6,543.4
)
(6,308.7
)
(5,844.9
)
Accumulated other comprehensive loss
(208.1
)
(180.3
)
(111.3
)
Total equity
2,364.1
2,536.0
2,717.7
Total liabilities and equity
$
6,951.1
$
7,724.7
$
7,961.9
Net Cash & Short-term Investments
$
639.9
$
962.1
$
1,330.7
Cash & Short-term Investments
1,776.9
2,598.4
2,964.4
RALPH LAUREN
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
Three Months Ended
July 2, 2022
June 26, 2021
(millions, except per share
data)
Net revenues
$
1,490.6
$
1,376.3
Cost of goods sold
(489.2
)
(408.2
)
Gross profit
1,001.4
968.1
Selling, general, and administrative
expenses
(820.6
)
(728.2
)
Impairment of assets
—
(18.6
)
Restructuring and other charges, net
(5.6
)
(0.7
)
Total other operating expenses,
net
(826.2
)
(747.5
)
Operating income
175.2
220.6
Interest expense
(11.8
)
(13.3
)
Interest income
3.6
1.8
Other income (expense), net
(4.8
)
0.9
Income before income taxes
162.2
210.0
Income tax provision
(38.8
)
(45.3
)
Net income
$
123.4
$
164.7
Net income per common share:
Basic
$
1.76
$
2.23
Diluted
$
1.73
$
2.18
Weighted-average common shares
outstanding:
Basic
70.1
73.8
Diluted
71.5
75.4
Dividends declared per share
$
0.75
$
0.6875
RALPH LAUREN
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
Three Months Ended
July 2, 2022
June 26, 2021
(millions)
Cash flows from operating
activities:
Net income
$
123.4
$
164.7
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
54.8
57.2
Deferred income tax expense
26.4
3.8
Non-cash stock-based compensation
expense
18.2
18.4
Non-cash impairment of assets
—
18.6
Bad debt expense reversals
(1.9
)
(1.0
)
Other non-cash charges
5.3
1.1
Changes in operating assets and
liabilities:
Accounts receivable
43.9
81.6
Inventories
(226.1
)
(67.7
)
Prepaid expenses and other current
assets
(70.5
)
(20.3
)
Accounts payable and accrued
liabilities
52.2
5.3
Income tax receivables and payables
8.7
4.7
Operating lease right-of-use assets and
liabilities, net
(11.4
)
(11.2
)
Other balance sheet changes
22.3
(7.6
)
Net cash provided by operating
activities
45.3
247.6
Cash flows from investing
activities:
Capital expenditures
(39.4
)
(28.2
)
Purchases of investments
(141.0
)
(368.3
)
Proceeds from sales and maturities of
investments
552.0
197.7
Other investing activities
(6.0
)
(0.6
)
Net cash provided by (used in)
investing activities
365.6
(199.4
)
Cash flows from financing
activities:
Repayments of long-term debt
(500.0
)
—
Payments of finance lease obligations
(5.8
)
(5.5
)
Payments of dividends
(48.1
)
—
Repurchases of common stock, including
shares surrendered for tax withholdings
(234.7
)
(28.8
)
Net cash used in financing
activities
(788.6
)
(34.3
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(30.0
)
3.3
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(407.7
)
17.2
Cash, cash equivalents, and restricted
cash at beginning of period
1,872.0
2,588.0
Cash, cash equivalents, and restricted
cash at end of period
$
1,464.3
$
2,605.2
RALPH LAUREN
CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended
July 2, 2022
June 26, 2021
(millions)
Net revenues:
North America
$
700.7
$
662.1
Europe
415.6
354.9
Asia
334.1
288.2
Other non-reportable segments
40.2
71.1
Total net revenues
$
1,490.6
$
1,376.3
Operating income:
North America
$
132.8
$
186.3
Europe
73.2
94.5
Asia
78.7
60.4
Other non-reportable segments
37.2
35.4
321.9
376.6
Unallocated corporate expenses
(141.1
)
(155.3
)
Unallocated restructuring and other
charges, net
(5.6
)
(0.7
)
Total operating income
$
175.2
$
220.6
RALPH LAUREN
CORPORATION
CONSTANT CURRENCY FINANCIAL
MEASURES
(Unaudited)
Comparable Store Sales Data
Three Months Ended
July 2, 2022
% Change
Constant Currency
North America:
Digital commerce
2
%
Brick and mortar
5
%
Total North America
5
%
Europe:
Digital commerce
7
%
Brick and mortar
45
%
Total Europe
34
%
Asia:
Digital commerce
37
%
Brick and mortar
17
%
Total Asia
19
%
Total Ralph Lauren Corporation
15
%
Operating Segment Net Revenues
Data
Three Months Ended
% Change
July 2, 2022
June 26, 2021
As Reported
Constant
Currency
(millions)
North America
$
700.7
$
662.1
5.8
%
5.9
%
Europe
415.6
354.9
17.1
%
28.4
%
Asia
334.1
288.2
15.9
%
26.0
%
Other non-reportable segments
40.2
71.1
(43.4
%)
(43.2
%)
Net revenues
$
1,490.6
$
1,376.3
8.3
%
13.4
%
RALPH LAUREN
CORPORATION
NET REVENUES BY SALES
CHANNEL
(Unaudited)
Three Months Ended
July 2, 2022
June 26, 2021
North America
Europe
Asia
Other
Total
North America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
437.8
$
215.9
$
313.9
$
—
$
967.6
$
412.2
$
170.8
$
272.8
$
26.8
$
882.6
Wholesale
262.9
199.7
20.2
—
482.8
249.9
184.1
15.4
5.0
454.4
Licensing
—
—
—
40.2
40.2
—
—
—
39.3
39.3
Net revenues
$
700.7
$
415.6
$
334.1
$
40.2
$
1,490.6
$
662.1
$
354.9
$
288.2
$
71.1
$
1,376.3
RALPH LAUREN
CORPORATION
GLOBAL RETAIL STORE
NETWORK
(Unaudited)
July 2, 2022
June 26, 2021
North
America
Ralph Lauren Stores
46
39
Polo Factory Stores
192
194
Total Directly Operated Stores
238
233
Concessions
1
1
Europe
Ralph Lauren Stores
38
34
Polo Factory Stores
59
60
Total Directly Operated Stores
97
94
Concessions
29
29
Asia
Ralph Lauren Stores
101
82
Polo Factory Stores
90
73
Total Directly Operated Stores
191
155
Concessions
678
617
Global Directly
Operated Stores and Concessions
Ralph Lauren Stores
185
155
Polo Factory Stores
341
327
Total Directly Operated Stores
526
482
Concessions
708
647
Global Licensed
Stores
Total Licensed Stores
113
141
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
July 2, 2022
As Reported
Total
Adjustments(a)(b)
As Adjusted
(millions, except per share
data)
Net revenues
$
1,490.6
$
—
$
1,490.6
Gross profit
1,001.4
11.6
1,013.0
Gross profit margin
67.2
%
68.0
%
Total other operating expenses, net
(826.2
)
3.2
(823.0
)
Operating expense margin
55.4
%
55.2
%
Operating income
175.2
14.8
190.0
Operating margin
11.8
%
12.7
%
Income before income taxes
162.2
14.8
177.0
Income tax provision
(38.8
)
(3.6
)
(42.4
)
Effective tax rate
23.9
%
23.9
%
Net income
$
123.4
$
11.2
$
134.6
Net income per diluted common share
$
1.73
$
1.88
Weighted average common shares outstanding
- Diluted
71.5
71.5
SEGMENT INFORMATION - OPERATING
INCOME:
North America
$
132.8
$
8.9
$
141.7
Operating margin
19.0
%
20.2
%
Europe
73.2
0.3
73.5
Operating margin
17.6
%
17.7
%
Asia
78.7
—
78.7
Operating margin
23.5
%
23.5
%
Other non-reportable segments
37.2
—
37.2
Operating margin
92.4
%
92.4
%
Unallocated corporate expenses and
restructuring & other charges, net
(146.7
)
5.6
(141.1
)
Total operating income
$
175.2
$
14.8
$
190.0
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Three Months Ended
June 26, 2021
As Reported
Total
Adjustments(a)(c)
As Adjusted
(millions, except per share
data)
Net revenues
$
1,376.3
$
—
$
1,376.3
Gross profit
968.1
(8.0
)
960.1
Gross profit margin
70.3
%
69.8
%
Total other operating expenses, net
(747.5
)
18.4
(729.1
)
Operating expense margin
54.3
%
53.0
%
Operating income
220.6
10.4
231.0
Operating margin
16.0
%
16.8
%
Income before income taxes
210.0
10.4
220.4
Income tax provision
(45.3
)
(2.7
)
(48.0
)
Effective tax rate
21.6
%
21.8
%
Net income
$
164.7
$
7.7
$
172.4
Net income per diluted common share
$
2.18
$
2.29
Weighted average common shares outstanding
- Diluted
75.4
75.4
SEGMENT INFORMATION - OPERATING
INCOME:
North America
$
186.3
$
(8.0
)
$
178.3
Operating margin
28.1
%
26.9
%
Europe
94.5
(0.9
)
93.6
Operating margin
26.6
%
26.4
%
Asia
60.4
1.1
61.5
Operating margin
20.9
%
21.3
%
Other non-reportable segments
35.4
—
35.4
Operating margin
49.8
%
49.8
%
Unallocated corporate expenses and
restructuring & other charges, net
(156.0
)
18.2
(137.8
)
Total operating income
$
220.6
$
10.4
$
231.0
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Three Months Ended
June 29, 2019
As Reported
Total
Adjustments(a)(d)
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:
North America
$
150.1
$
—
$
150.1
Operating margin
20.9
%
20.9
%
Europe
79.4
0.1
79.5
Operating margin
22.0
%
22.0
%
Asia
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, net
(167.2
)
30.8
(136.4
)
Total operating income
$
143.3
$
31.4
$
174.7
RALPH LAUREN CORPORATION
FOOTNOTES TO RECONCILIATION OF NON-U.S. GAAP
FINANCIAL MEASURES
(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) 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, net in the consolidated
statements of operations.
(b)
Adjustments for the three months ended July 2, 2022 include (i)
non-routine inventory charges of $11.6 million largely recorded in
connection with the Russia-Ukraine war; (ii) other charges of $4.9
million primarily related to rent and occupancy costs associated
with certain previously exited real estate locations for which the
related lease agreements have not yet expired; (iii) benefit of
$2.4 million related to Russia-related bad debt reserve
adjustments; and (iv) charges of $0.7 million recorded in
connection with the Company's restructuring activities, consisting
of restructuring charges.
(c)
Adjustments for the three months ended June 26, 2021 include (i)
net charges of $18.5 million recorded in connection with the
Company's restructuring activities, primarily consisting of
restructuring charges, impairment of assets, and accelerated
stock-based compensation expense; (ii) benefit of $8.0 million
related to COVID-19-related inventory adjustments; (iii) benefit of
$0.9 million related to COVID-19-related bad debt reserve
adjustments; and (iv) other charges of $0.8 million primarily
related to rent and occupancy costs associated with certain
previously exited real estate locations for which the related lease
agreements have not yet expired.
(d)
Adjustments for the three months ended June 29, 2019 include (i)
other charges of $22.6 million primarily related to the charitable
donation of the net cash proceeds received from the sale of the
Company's corporate jet, and rent and occupancy costs associated
with previously exited real estate locations for which the related
lease agreements have not yet expired; and (ii) charges of $8.8
million recorded in connection with the Company's restructuring
plans, consisting of restructuring charges, impairment of assets,
inventory-related charges.
NON-U.S. GAAP FINANCIAL MEASURES
Because Ralph Lauren Corporation is a global company, the
comparability of its operating results reported in U.S. Dollars is
affected by foreign currency exchange rate fluctuations because the
underlying currencies in which it transacts change in value over
time compared to the U.S. Dollar. Such fluctuations can have a
significant effect on the Company's reported results. As such, in
addition to financial measures prepared in accordance with
accounting principles generally accepted in the U.S. ("U.S. GAAP"),
the Company's discussions often contain references to constant
currency measures, which are calculated by translating current-year
and prior-year reported amounts into comparable amounts using a
single foreign exchange rate for each currency. The Company
presents constant currency financial information, which is a
non-U.S. GAAP financial measure, as a supplement to its reported
operating results. The Company uses constant currency information
to provide a framework for assessing how its businesses performed
excluding the effects of foreign currency exchange rate
fluctuations. Management believes this information is useful to
investors for facilitating comparisons of operating results and
better identifying trends in the Company's businesses. The constant
currency performance measures should be viewed in addition to, and
not in lieu of or superior to, the Company's operating performance
measures calculated in accordance with U.S. GAAP.
This earnings release also includes certain other non-U.S. GAAP
financial measures relating to the impact of charges and other
items as described herein. The Company uses non-U.S. GAAP financial
measures, among other things, to evaluate its operating performance
and to better represent the manner in which it conducts and views
its business. The Company believes that excluding items that are
not comparable from period to period helps investors and others
compare operating performance between two periods. While the
Company considers non-U.S. GAAP measures useful in analyzing its
results, they are not intended to replace, nor act as a substitute
for, any presentation included in the consolidated financial
statements prepared in conformity with U.S. GAAP, and may be
different from non-U.S. GAAP measures reported by other
companies.
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-U.S. GAAP financial measures above. The income tax benefit
(provision) has been adjusted for the tax-related effects of these
charges, which were calculated using the respective statutory tax
rates for each applicable jurisdiction. Included in this earnings
release are reconciliations between the non-U.S. GAAP financial
measures and the most directly comparable U.S. GAAP measures before
and after these adjustments.
Additionally, the Company's full year Fiscal 2023 and second
quarter guidance excludes certain anticipated restructuring-related
and other charges. The Company is not able to provide a full
reconciliation of these non-U.S. GAAP financial measures to U.S.
GAAP because certain material items that impact these measures,
such as the timing and exact amount of charges related to its
restructuring plans, have not yet occurred or are out of the
Company's control. Accordingly, a reconciliation of the Company's
non-U.S. GAAP based financial measure guidance to the most directly
comparable U.S. GAAP measures is not available without unreasonable
effort. However, the Company has identified the estimated impact of
certain items excluded from its financial outlook. Specifically,
the Company's financial outlook excludes estimated pretax charges
of up to approximately $35 million related to its Fiscal 2021
Strategic Realignment Plan that have not yet been incurred.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220808005563/en/
Investor Relations: Corinna Van der Ghinst
ir@ralphlauren.com
Or
Corporate Communications rl-press@ralphlauren.com
Ralph Lauren (NYSE:RL)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024
Ralph Lauren (NYSE:RL)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024