- Ralph Lauren To Present its Strategic Growth Plan, Next Great
Chapter: Accelerate, To Deliver Sustainable, Long-Term Growth and
Value Creation at Investor Day in New York City
- Three-Year Financial Outlook Accelerates to a Mid- to
High-Single Digit Revenue Compounded Annual Growth Rate and
Operating Profit Growth Exceeding Top-Line Growth by Fiscal 2025 in
Constant Currency
- Company Plans to Continue Returning Approximately $2 Billion in
Excess Free Cash Flow to Shareholders on a Cumulative Basis Through
Fiscal 2025 Through Dividends and Share Repurchases
- Ralph Lauren Will Ring Opening Bell of the New York Stock
Exchange in Celebration of the Company’s 25th Anniversary Since
IPO
Ralph Lauren Corporation (NYSE:RL), a global leader in the
design, marketing, and distribution of luxury lifestyle products,
will be hosting a meeting for investors and analysts today to
present its Next Great Chapter: Accelerate strategic growth plan to
deliver sustainable long-term growth and value creation, and to
discuss the Company’s long-term financial outlook.
“This Company started over 50 years ago with a dream and a tie –
and today, while it has expanded to become a leading luxury
lifestyle brand, our vision for timelessness, authenticity and a
life well-lived remains constant,” said Ralph Lauren, Executive
Chairman and Chief Creative Officer. “What has changed is our
ability to bring this vision to more and more people around the
world, and I am so proud of our teams for building our strength and
expanding our reach while staying true to who we are.”
“Since our last investor day in 2018, we have transformed our
business – building a strong foundation with multiple engines of
growth that are already showing momentum,” said Patrice Louvet,
President and Chief Executive Officer. “Our Next Great Chapter:
Accelerate plan is grounded in this meaningful progress, building
on our elevated brand positioning and desirability; our
distinctive, timeless products and experiences across multiple
categories; and our expanding reach in key cities around the
world.”
Mr. Louvet continued, “Our clear and choiceful strategies are
expected to deliver sustainable long-term growth and value creation
– fueled by our strong balance sheet and operating discipline – as
we reinforce our position as a leading luxury lifestyle
company.”
As part of its strategic plan, the Company intends to execute on
the following three strategic growth drivers:
- Elevate and energize our lifestyle brand – expand and
elevate our lifestyle brand positioning globally to deliver high
quality, new consumer acquisition and retention to increase
Customer Lifetime Value;
- Drive the core and expand for more – continue driving
our stable of iconic core products along with our next cohort of
high-potential, under-penetrated categories focused on consumers’
evolving lifestyles and approach to wardrobing; and
- Win in key cities with our consumer ecosystem – scale
our digitally-led, cohesive ecosystem strategy across our top 30
cities around the world.
These strategic growth drivers are underpinned and enabled by
the Company’s core capabilities, which have been strengthened and
enhanced in the last four years. These begin with Ralph Lauren’s
outstanding and dedicated teams and high-performing culture and
extend to its best-in-class digital technology and analytics,
superior operational capabilities, powerful balance sheet and
leadership in Citizenship and Sustainability.
In addition, Ralph Lauren executives will ring The Opening Bell®
of the New York Stock Exchange today in celebration of the
Company’s 25th anniversary of listing.
Long-Term Financial Outlook The Company is reiterating
its Fiscal 2023 guidance that was recently provided on its earnings
call on August 9th, 2022 and introducing its three-year financial
outlook.
Over the next three years, from a base of Fiscal 2022 through
Fiscal 2025, the Company expects an acceleration in revenue growth
to a compound annual growth rate of mid- to high-single digits in
constant currency. Operating profit growth is expected to exceed
the rate of top-line growth as a result of continued operating
margin expansion. Operating margin is expected to expand to at
least 15% by Fiscal 2025 in constant currency, driven by a
combination of modest gross margin expansion and operating expense
leverage balanced with continued investments in the Company’s
long-term strategic priorities.
In addition, capital expenditures are expected to represent
approximately 4% - 5% of revenue annually through Fiscal 2025.
The Company expects to continue returning excess free cash flow
to shareholders over the next three years, with plans to return
approximately $2 billion on a cumulative basis through Fiscal 2025
through its regular quarterly cash dividends and share repurchases,
subject to the authorization of its Board of Directors and overall
business and market conditions.
The Company’s Board of Directors increased the regular quarterly
cash dividend on the Company's Common Stock by 9% to $0.75 per
share at the beginning of Fiscal 2023, representing an annual
dividend of $3.00 per share.
The Company’s current share repurchase authorization enables it
to repurchase up to $1.4 billion in shares of Class A Common Stock,
subject to overall business and market conditions.
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 long-term outlook
excludes certain anticipated restructuring-related and other net
charges, as described in the "Non-U.S. GAAP Financial Measures"
section of this press release.
Investor Day Webcast The investor meeting will be
streamed live and can be accessed on the Company’s Investor
Relations website at https://investor.ralphlauren.com beginning at
10:15 A.M. Eastern Standard Time on Monday, September 19, 2022. A
replay of the event and presentation materials will be available on
the website for approximately one year after the event.
The Company will present its strategic growth plan, and several
members of management will speak including: Patrice Louvet,
President and Chief Executive Officer; David Lauren, Chief Branding
and Innovation Officer; Iris Langlois-Meurinne, Chief Marketing
Officer; Halide Alag�z, Chief Product Officer; Bob Ranftl, Regional
CEO, North America; Shin Hwee Chua, Regional CEO, China &
Southeast Asia; Janet Sherlock, Chief Digital and Technology
Officer; and Jane Nielsen, Chief Operating Officer and Chief
Financial Officer.
ABOUT RALPH LAUREN CORPORATION Ralph Lauren Corporation
(NYSE:RL) is a global leader in the design, marketing and
distribution of luxury 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 (including without limitation, as
part of the Investor Day presentation), may contain certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements under “Long-Term Financial Outlook”
and the statements regarding, among other things, our current
expectations about the Company's future results, financial
condition and sources of liquidity (especially in light of the
COVID-19 pandemic), the implementation and impact of our strategic
plans, initiatives and capital expenses, revenues, store openings
and closings, margins, expenses, expense savings, earnings,
dividends, share repurchases, total shareholder return, and our
ability to meet 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 a number of 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.
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.
In addition, the Company's full year Fiscal 2023 and long-term
financial outlook excludes certain anticipated
restructuring-related and other one-time charges. 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.
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220919005226/en/
Investor Relations: Corinna Van der Ghinst ir@ralphlauren.com Or
Corporate Communications rl-press@ralphlauren.com
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