- Fourth Quarter and Full Year Revenue Exceeded Expectations, Led
by Asia and Europe, with Fourth Quarter Revenue Up 1% on a Reported
Basis and 9% in Constant Currency on a 13-Week Comparable Basis and
Full Year Fiscal 2023 Revenue Up 4% and 10%, Respectively
- Global Direct-to-Consumer Comparable Store Sales Grew 6% in the
Fourth Quarter, Driven by Continued Brand Elevation with
Double-Digit Average Unit Retail ("AUR") Growth and Full-Price
Retail Performance
- Delivered Better Than Expected Fourth Quarter Operating Margin
Expansion and Operating Profit Growth Despite Significant Cost and
Foreign Currency Headwinds
- Outlook for Fiscal 2024 Net Revenue Growth of Low-Single Digits
on Both a Reported and Constant Currency Basis with Operating
Margin Expansion
- Returned a Total of $653 Million to Shareholders Through Our
Dividends and Repurchase of Class A Common Stock in Fiscal
2023
Ralph Lauren Corporation (NYSE:RL), a global leader in the
design, marketing, and distribution of luxury lifestyle products,
today reported earnings per diluted share of $0.48 on a reported
basis and $0.90 on an adjusted basis, excluding
restructuring-related and other net charges, for the fourth quarter
of Fiscal 2023. This compared to earnings per diluted share of
$0.34 on a reported basis and $0.49 on an adjusted basis, excluding
restructuring-related and other net charges for the fourth quarter
of Fiscal 2022.
"As I reflect on the past year, I am inspired by how our teams
around the world brought the magic of our timeless vision to life.
From our California Dreaming show to sponsoring some of the most
iconic moments in sports — it's their passion and optimism that
inspire people to step into their dreams," said Ralph Lauren,
Executive Chairman and Chief Creative Officer.
"We made strong progress in the first year of our Next Great
Chapter: Accelerate plan, as our teams around the world executed
exceptionally well through a highly dynamic global operating
environment," said Patrice Louvet, President and Chief Executive
Officer. "Our Fiscal 2023 performance puts us on track with our
investor day commitments. We continue to be on offense as we
balance growth and operating discipline, investing in our brand
while delivering strong shareholder returns."
Mr. Louvet continued, "Looking ahead, our growth and value
creation will continue to be supported by the strength of our brand
and multiple growth engines — from recruiting new high-value
consumers and driving our timeless core products and high-potential
product categories to targeted geographic and channel
expansion."
Key Achievements in Fourth Quarter and Full Year Fiscal
2023
We delivered the following highlights across our strategic
priorities in the fourth quarter and full year Fiscal 2023:
- Elevate and Energize Our Lifestyle Brand
- Delivered strong growth in customer lifetime value and
full-price new consumer acquisition, supported by high-single digit
growth in social media followers and digital search trends
significantly outpacing peers. Consumer metrics gained momentum led
by growth in brand consideration, value perception and net promoter
scores for both the fourth quarter and full year
- Fueled consumer recruitment and engagement through key brand
moments, with fourth quarter investments focused on: our 3rd annual
sponsorship of the Australian Open; first-ever brand collaboration
and NFTs with Web3 community Poolsuite as part of our Miami
ecosystem launch; successful Lunar New Year Polo Bear campaign; and
iconic celebrity dressing moments including Malala Yousafzai at the
Oscars
- Drive the Core and Expand for More
- Drove robust revenue growth in our Core business, up low
double-digits to last year, as well as our high-potential
categories — including Women's, Outerwear and Home — up low-teens
to last year, both in constant currency
- Product highlights this quarter included: our Polo Women's
intimates launch; special edition Creed III movie collaboration;
and Lunar New Year 'Year of the Rabbit' capsule
- Increased AUR by 12% across our direct-to-consumer network in
both the fourth quarter and full year, on top of double-digit
increases last year, driven by continued elevation of our product
offering and favorable geographic and channel mix shifts
- Win in Key Cities with Our Consumer Ecosystem
- Delivered targeted key city ecosystem expansion across every
region including emblematic store openings in Sydney, Miami, and
Shenzhen in the fourth quarter
- By geography, fourth quarter sales performance was led by Asia,
up 13% on a reported basis and 29% in constant currency on a
13-week comparable basis, with China up more than 30% in reported
dollars and over 40% on a constant currency 13-week comparable
basis. Europe and North America were negatively impacted by a shift
in the timing of post-holiday sales into the third quarter, as
previously reported, with sales declining 1% and 3%, respectively,
on a reported basis but increasing 7% and 2%, respectively in
constant currency on a 13-week comparable basis
- Ralph Lauren digital revenues grew mid-single digits in the
fourth quarter in constant currency, in-line with our expectations
and on top of 20% growth last year. Digital operating margin
continued to meaningfully benefit the total Company margin
rate
Our business is supported by our fortress foundation, which we
define through our five key enablers, including: our people and
culture, best-in-class digital technology and analytics, superior
operational capabilities, a powerful balance sheet, and leadership
in citizenship and sustainability.
Fourth Quarter Fiscal 2023 Income Statement Review
Net Revenue. In the fourth quarter of Fiscal 2023,
revenue increased 1% to $1.5 billion on a reported 13-week basis
versus a 14-week fiscal period last year. Foreign currency
negatively impacted revenue growth by approximately 370 basis
points in the fourth quarter. On a 13-week comparable basis,
revenue increased 9% in constant currency.
Revenue performance for the Company's reportable segments in the
fourth quarter compared to the prior year period was as
follows:
- North America Revenue. North America revenue in the fourth
quarter decreased 3% to $656 million. On a 13-week comparable
basis, revenue increased 2% in constant currency. Results included
approximately 270 basis points of negative impact from a previously
reported shift in the timing of post-holiday sales into the third
quarter this year compared to the fourth quarter last year. In
retail, comparable store sales in North America were down 4%, with
a 3% decrease in digital commerce and a 4% decline in brick and
mortar stores driven primarily by the timing shift. North America
wholesale revenue was up 11% to last year, benefiting from more
normalized timing of spring shipments compared to the prior year's
supply chain disruptions.
- Europe Revenue. Europe revenue in the fourth quarter decreased
1% to $461 million on a reported basis. On a 13-week comparable
basis, revenue increased 7% in constant currency. Similar to North
America, results included approximately 120 basis points of
negative impact from a previously reported shift in the timing of
post-holiday sales into the third quarter this year compared to the
fourth quarter last year. In retail, comparable store sales in
Europe were up 8%, with a 9% increase in brick and mortar stores
and a 6% increase in digital commerce. Europe wholesale revenue
decreased 3% on a reported basis but increased 3% in constant
currency.
- Asia Revenue. Asia revenue in the fourth quarter increased 13%
to $390 million on a reported basis. On a 13-week comparable basis,
revenue increased 29% in constant currency, supported by strong
performance across all markets. Comparable store sales in Asia
increased 20%, with a 20% increase in our brick and mortar stores
and a 19% increase in digital commerce.
Gross Profit. Gross profit for the fourth quarter of
Fiscal 2023 was $951 million and gross margin was 61.7%. On an
adjusted basis, gross margin was 63.0% in constant currency, about
flat to the comparable 13-week period last year. Gross margins were
impacted by increased input costs from raw materials and labor,
offset by AUR growth across all regions, lower freight, and
favorable channel and geographic mix shifts. Compared to fourth
quarter Fiscal 2019 pre-pandemic levels, adjusted gross margins
expanded 170 basis points supported by strong AUR growth and brand
elevation.
Operating Expenses. Operating expenses in the fourth
quarter of Fiscal 2023 were $910 million on a reported basis,
including $32 million in restructuring-related and other net
charges. On an adjusted basis excluding such charges, operating
expenses were $908 million in constant currency, up 3% on a 13-week
comparable basis but down approximately 380 basis points as a
percent of sales. Higher compensation and variable selling expenses
were partially offset by lower marketing spend due to a more
normalized quarterly marketing cadence compared to last year.
Operating Income. Operating income for the fourth quarter
of Fiscal 2023 was $40 million on a reported basis, including
restructuring-related and other net charges of $35 million, and
operating margin was 2.6%. Adjusted operating income was $98
million and operating margin was 6.1% in constant currency, 390
basis points above the prior year on a 13-week comparable
basis.
- North America Operating Income. North America operating income
in the fourth quarter was $68 million on a reported basis and $80
million an adjusted basis. Adjusted North America operating margin
was 12.2%, compared to adjusted operating margin of 13.1% for the
13-week comparable period of the fourth quarter of Fiscal 2022
driven by increased compensation, shipping and other selling
expenses.
- Europe Operating Income. Europe operating income in the fourth
quarter was $89 million on both a reported and adjusted basis.
Adjusted Europe operating margin was 20.6% in constant currency,
compared to 19.0% for the comparable 13-week period last year.
- Asia Operating Income. Asia operating income in the fourth
quarter was $55 million on both a reported and adjusted basis.
Adjusted Asia operating margin was 16.3% in constant currency,
compared to 8.2% for the comparable 13-week period last year.
Net Income and EPS. On a reported basis, net income in
the fourth quarter of Fiscal 2023 was $32 million or $0.48 per
diluted share. On an adjusted basis, net income was $61 million, or
$0.90 per diluted share. This compared to a net income of $24
million, or $0.34 per diluted share on a reported basis, and net
income of $36 million, or $0.49 per diluted share on an adjusted
basis, for the fourth quarter of Fiscal 2022.
In the fourth quarter of Fiscal 2023, the Company had an
effective tax rate of approximately 34% on a reported basis and 27%
on an adjusted basis. This compared to a reported and adjusted
effective tax rate of approximately 17% and 23%, respectively, in
the prior year period. The increase in our adjusted effective tax
rate was primarily driven by the absence of certain discrete items
that benefited the fourth quarter of the prior year.
Full Year Fiscal 2023 Income Statement Review
Net Revenues. For Fiscal 2023, revenue increased 4% to
$6.4 billion on a reported 52-week basis versus a 53-week fiscal
period last year. Foreign currency negatively impacted revenue
growth by approximately 580 basis points in the period. On a
52-week comparable basis, revenue increased 10% to last year in
constant currency.
- North America Revenue. For Fiscal 2023, North America revenue
increased 2% to $3.0 billion. On a 52-week comparable basis, North
America revenue increased 3% to $3.0 billion in constant
currency.
- Europe Revenue. For Fiscal 2023, Europe revenue increased 3% to
$1.8 billion on a reported basis. On a 52-week comparable basis,
Europe revenue increased 15% to $2.0 billion in constant
currency.
- Asia Revenue. For Fiscal 2023, Asia revenue increased 11% to
$1.4 billion on a reported basis. On a 52-week comparable basis,
Asia revenue increased 25% to $1.6 billion in constant
currency.
Gross Profit. Gross profit for Fiscal 2023 was $4.2
billion on a reported basis and gross margin was 64.6%. On an
adjusted basis, gross margin was 66.3% in constant currency,
approximately 10 basis points lower than the comparable 52-week
period last year. Compared to Fiscal 2019, adjusted gross margins
expanded 320 basis points supported by strong AUR growth and brand
elevation.
Operating Expenses. For Fiscal 2023, operating expenses
were $3.5 billion on a reported basis, including $51 million in
restructuring-related and other net charges. On an adjusted basis
excluding such charges, operating expenses were $3.6 billion in
constant currency, up 9% on a 52-week comparable basis but down
approximately 70 basis points as a percent of sales.
Operating Income. Operating income for Fiscal 2023 was
$704 million, including restructuring-related and other net charges
of $66 million. Adjusted operating income was $935 million and
operating margin was 13.7% in constant currency, 60 basis points
above the prior year on a 52-week comparable basis.
- North America Operating Income. North America operating income
in Fiscal 2023 was $543 million and operating margin was 18.0%,
including restructuring-related and other net charges. Adjusted
North America operating margin was 18.7%, compared to adjusted
operating margin of 22.4% for the 52-week comparable period in
Fiscal 2022 driven by increased product costs, compensation and
selling expenses.
- Europe Operating Income. Europe operating income in Fiscal 2023
was $406 million and operating margin was 22.1% on a reported
basis, including restructuring-related and other net charges.
Adjusted Europe operating margin was 25.2% in constant currency,
compared to 24.8% for the comparable 52-week period last year.
- Asia Operating Income. Asia operating income in Fiscal 2023 was
$290 million and operating margin was 20.3% on a reported basis,
including restructuring-related and other net charges. Adjusted
Asia operating margin was 22.0% in constant currency, compared to
17.1% for the comparable 52-week period last year.
Net Income and EPS. In Fiscal 2023, net income was $523
million or $7.58 per diluted share on a reported basis. On an
adjusted basis, net income was $576 million, or $8.34 per diluted
share. This compared to a net income of $600 million, or $8.07 per
diluted share on a reported basis, and net income of $623 million,
or $8.38 per diluted share on an adjusted basis for Fiscal
2022.
For Fiscal 2023, the Company had an effective tax rate of
approximately 24% on both a reported and adjusted basis. This
compared to a reported and adjusted effective tax rate of
approximately 20% and 21%, respectively, in the prior year. The
increase in our adjusted effective tax rate was primarily driven by
the absence of a one-time foreign derived intangible income
deduction and other discrete items that benefited the prior year
period.
Balance Sheet and Cash Flow Review
The Company ended Fiscal 2023 with $1.6 billion in cash and
investments and $1.1 billion in total debt, compared to $2.6
billion and $1.6 billion, respectively, at the end of Fiscal 2022.
Inventory at the end of Fiscal 2023 was $1.1 billion, up 10%
compared to the prior year period reflecting earlier receipts
compared to the prior year's impact from global supply chain
delays, increased product costs and continued elevation in product
mix.
The Company repurchased approximately $42 million of Class A
Common Stock in the fourth quarter and approximately $454 million
of Class A Common Stock during the full year Fiscal 2023. At the
end of Fiscal 2023, the Company had approximately $1.2 billion
remaining under its total share repurchase authorization, subject
to overall business and market conditions.
The Company had $217 million in capital expenditures in Fiscal
2023, compared to $167 million in the prior year period. The
increase was primarily due to more normalized levels of investment
following the pandemic, following unusually low capital
expenditures in the prior year period.
Full Year Fiscal 2024 and First Quarter Outlook
The Company's outlook is based on its best assessment of the
current macroeconomic environment, including inflationary pressures
and other consumer spending-related headwinds, foreign currency
volatility, the war in Ukraine and COVID-19-related impacts, among
others. The full year Fiscal 2024 and first quarter guidance
excludes any potential restructuring-related and other net charges
that may be incurred in future periods, as described in the
"Non-U.S. GAAP Financial Measures" section of this press
release.
For Fiscal 2024, the Company expects revenues to increase
approximately low-single digits to last year on a constant currency
basis. Based on current exchange rates, foreign currency is
expected to benefit revenue growth by approximately 20 basis points
in Fiscal 2024.
The Company expects operating margin for Fiscal 2024 to expand
approximately 30 to 50 basis points in constant currency, driven by
gross margin expansion. Foreign currency is expected to benefit
operating margin by approximately 10 basis points in Fiscal 2024.
Gross margin expansion is expected to increase about 50 to 100
basis points in constant currency, with stronger AUR and reduced
freight costs more than offsetting continued product cost inflation
through the majority of the fiscal year. Foreign currency is
expected to negatively impact gross margins by approximately 20
basis points in Fiscal 2024.
For the first quarter, the Company expects revenues to be flat
to up slightly to last year on a constant currency basis. On a
reported basis, including approximately 150 basis points of
negative foreign currency impact, revenues are expected to be down
slightly to prior year. This outlook includes approximately 220
basis points of negative impact from the normalized timing of
spring North America wholesale shipments following last year's
supply chain disruptions, which benefited our fourth quarter of
Fiscal 2023.
Operating margin for the first quarter is expected to expand
approximately 30 to 50 basis points in constant currency, driven by
stronger gross margins. Gross margin expansion is expected to be
driven by lower freight costs and continued AUR growth partially
offset by increased product costs. Foreign currency is expected to
negatively impact operating and gross margins by approximately 50
basis points in the first quarter.
The full year Fiscal 2024 tax rate is expected to be in the
range of 24% to 25%, assuming a continuation of current tax laws.
First quarter of Fiscal 2024 tax rate is expected to be about 23%
to 24%.
The Company is planning capital expenditures for Fiscal 2024 of
approximately $275 million to $300 million.
Conference Call
As previously announced, the Company will host a conference call
and live online webcast today, Thursday, May 25, 2023, 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 Fourth 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 approximately 12:00 P.M. Eastern, Thursday,
May 25, 2023 through 6:00 P.M. Eastern, Thursday, June 1, 2023 by
dialing 203-369-1256 or 866-454-9172 and entering passcode
1195.
ABOUT RALPH LAUREN
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, may contain certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, statements regarding our
current expectations about the Company's future operating results
and financial condition, the implementation and results of our
strategic plans and initiatives, store openings and closings,
capital expenses, our plans regarding our quarterly cash dividend
and Class A common stock repurchase programs, and our ability to
meet environmental, social, and governance goals. Forward-looking
statements are based on current expectations and are indicated by
words or phrases such as "aim," "anticipate," "outlook,"
"estimate," "ensure," "commit," "expect," "project," "believe,"
"envision," "goal," "target," "can," "will," and similar words or
phrases. These forward-looking statements involve known and unknown
risks, uncertainties, and other factors which may cause actual
results, performance, or achievements to be materially different
from the future results, performance, or achievements expressed in
or implied by such forward-looking statements. 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. These risks,
uncertainties, and other factors 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 any potential changes resulting from the execution of our
long-term growth strategy, and our ability to effectively transfer
knowledge and maintain adequate controls and procedures during
periods of transition; 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,
diplomatic tensions between the U.S. and other countries, rising
interest rates, and recent bank failures, among other factors
described herein; 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, port congestion, and scrutiny or detention of
goods produced in certain territories resulting from laws,
regulations, or trade restrictions, such as those imposed by the
Uyghur Forced Labor Prevention Act ("UFLPA") or the Countering
America's Adversaries Through Sanctions Act ("CAATSA"), which could
result in shipment approval delays leading to inventory shortages
and lost sales; 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; 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 a recession or
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
impact to our business resulting from the potential 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 or other countries, 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)
April 1, 2023
April 2, 2022
(millions)
ASSETS
Current assets:
Cash and cash equivalents
$
1,529.3
$
1,863.8
Short-term investments
36.4
734.6
Accounts receivable, net of allowances
447.7
405.4
Inventories
1,071.3
977.3
Income tax receivable
50.7
63.7
Prepaid expenses and other current
assets
188.7
172.5
Total current assets
3,324.1
4,217.3
Property and equipment, net
955.5
969.5
Operating lease right-of-use assets
1,134.0
1,111.3
Deferred tax assets
255.1
303.8
Goodwill
898.9
908.7
Intangible assets, net
88.9
102.9
Other non-current assets
133.0
111.2
Total assets
$
6,789.5
$
7,724.7
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
—
$
499.8
Accounts payable
371.6
448.7
Current income tax payable
59.7
53.8
Current operating lease liabilities
266.7
262.0
Accrued expenses and other current
liabilities
795.5
991.4
Total current liabilities
1,493.5
2,255.7
Long-term debt
1,138.5
1,136.5
Long-term finance lease liabilities
315.3
341.6
Long-term operating lease liabilities
1,141.1
1,132.2
Non-current income tax payable
75.9
98.9
Non-current liability for unrecognized tax
benefits
93.8
91.9
Other non-current liabilities
100.9
131.9
Total liabilities
4,359.0
5,188.7
Equity:
Common stock
1.3
1.3
Additional paid-in-capital
2,824.3
2,748.8
Retained earnings
6,598.2
6,274.9
Treasury stock, Class A, at cost
(6,797.3
)
(6,308.7
)
Accumulated other comprehensive loss
(196.0
)
(180.3
)
Total equity
2,430.5
2,536.0
Total liabilities and equity
$
6,789.5
$
7,724.7
Net Cash & Short-term
Investments(a)
$
427.2
$
962.1
Cash & Short-term Investments
1,565.7
2,598.4
______________________
(a)
Calculated as cash and cash equivalents,
plus short-term investments, less total debt.
RALPH LAUREN
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
Three Months Ended
Twelve Months Ended
April 1, 2023
April 2, 2022
April 1, 2023
April 2, 2022
(millions, except per share
data)
Net revenues
$
1,540.8
$
1,522.7
$
6,443.6
$
6,218.5
Cost of goods sold
(590.2
)
(556.6
)
(2,277.8
)
(2,071.0
)
Gross profit
950.6
966.1
4,165.8
4,147.5
Selling, general, and administrative
expenses
(878.2
)
(913.7
)
(3,408.9
)
(3,305.6
)
Impairment of assets
(9.5
)
(2.0
)
(9.7
)
(21.3
)
Restructuring and other charges, net
(22.7
)
(13.6
)
(43.0
)
(22.2
)
Total other operating expenses,
net
(910.4
)
(929.3
)
(3,461.6
)
(3,349.1
)
Operating income
40.2
36.8
704.2
798.4
Interest expense
(7.1
)
(13.7
)
(40.4
)
(54.0
)
Interest income
13.4
1.1
32.2
5.5
Other income (expense), net
2.7
5.1
(4.1
)
4.7
Income before income taxes
49.2
29.3
691.9
754.6
Income tax provision
(16.9
)
(4.9
)
(169.2
)
(154.5
)
Net income
$
32.3
$
24.4
$
522.7
$
600.1
Net income per common share:
Basic
$
0.49
$
0.34
$
7.72
$
8.22
Diluted
$
0.48
$
0.34
$
7.58
$
8.07
Weighted-average common shares
outstanding:
Basic
66.4
71.2
67.7
73.0
Diluted
67.8
72.5
69.0
74.3
Dividends declared per share
$
0.75
$
0.6875
$
3.00
$
2.75
RALPH LAUREN
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
Twelve Months Ended
April 1, 2023
April 2, 2022
(millions)
Cash flows from operating
activities:
Net income
$
522.7
$
600.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
220.5
229.7
Deferred income tax expense (benefit)
3.9
(46.1
)
Stock-based compensation expense
75.5
81.7
Impairment of assets
9.7
21.3
Bad debt expense (reversals)
2.3
(2.2
)
Other non-cash charges
1.0
1.0
Changes in operating assets and
liabilities:
Accounts receivable
(52.6
)
32.4
Inventories
(106.2
)
(269.3
)
Prepaid expenses and other current
assets
(19.9
)
(28.3
)
Accounts payable and accrued
liabilities
(225.0
)
194.6
Income tax receivables and payables
5.7
(62.3
)
Operating lease right-of-use assets and
liabilities, net
(17.5
)
(61.6
)
Other balance sheet changes
(9.1
)
24.9
Net cash provided by operating
activities
411.0
715.9
Cash flows from investing
activities:
Capital expenditures
(217.5
)
(166.9
)
Purchases of investments
(598.6
)
(1,510.6
)
Proceeds from sales and maturities of
investments
1,293.4
964.6
Other investing activities
(5.8
)
(5.0
)
Net cash provided by (used in)
investing activities
471.5
(717.9
)
Cash flows from financing
activities:
Repayments of long-term debt
(500.0
)
—
Payments of finance lease obligations
(21.9
)
(23.1
)
Payments of dividends
(198.3
)
(150.0
)
Repurchases of common stock, including
shares surrendered for tax withholdings
(488.6
)
(492.6
)
Net cash used in financing
activities
(1,208.8
)
(665.7
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(8.8
)
(48.3
)
Net decrease in cash, cash equivalents,
and restricted cash
(335.1
)
(716.0
)
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
$
1,536.9
$
1,872.0
RALPH LAUREN
CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended
Twelve Months Ended
April 1, 2023
April 2, 2022
April 1, 2023
April 2, 2022
(millions)
Net revenues:
North America
$
655.6
$
674.3
$
3,020.5
$
2,968.2
Europe
460.8
467.4
1,839.2
1,780.7
Asia
390.0
346.1
1,426.7
1,286.8
Other non-reportable segments
34.4
34.9
157.2
182.8
Total net revenues
$
1,540.8
$
1,522.7
$
6,443.6
$
6,218.5
Operating income:
North America
$
68.4
$
90.2
$
543.2
$
676.7
Europe
89.1
90.6
406.5
444.0
Asia
55.4
39.4
289.6
228.8
Other non-reportable segments
32.3
32.2
146.4
138.4
245.2
252.4
1,385.7
1,487.9
Unallocated corporate expenses
(182.3
)
(202.0
)
(638.5
)
(667.3
)
Unallocated restructuring and other
charges, net
(22.7
)
(13.6
)
(43.0
)
(22.2
)
Total operating income
$
40.2
$
36.8
$
704.2
$
798.4
RALPH LAUREN
CORPORATION
CONSTANT CURRENCY FINANCIAL
MEASURES
(Unaudited)
Comparable Store Sales Data
April 1, 2023
Three Months
Ended
Twelve Months
Ended
% Change
% Change
Constant Currency
Constant Currency
North America:
Digital commerce
(3
%)
3
%
Brick and mortar
(4
%)
1
%
Total North America
(4
%)
1
%
Europe:
Digital commerce
6
%
10
%
Brick and mortar
9
%
14
%
Total Europe
8
%
13
%
Asia:
Digital commerce
19
%
24
%
Brick and mortar
20
%
17
%
Total Asia
20
%
17
%
Total Ralph Lauren Corporation
6
%
8
%
Operating Segment Net Revenues
Data
Three Months Ended
% Change
April 1, 2023
April 2, 2022
As
Reported
Constant
Currency
(millions)
North America
$
655.6
$
674.3
(2.8
%)
(2.5
%)
Europe
460.8
467.4
(1.4
%)
4.0
%
Asia
390.0
346.1
12.7
%
21.5
%
Other non-reportable segments
34.4
34.9
(1.6
%)
(1.5
%)
Net revenues
$
1,540.8
$
1,522.7
1.2
%
4.9
%
Twelve Months Ended
% Change
April 1, 2023
April 2, 2022
As
Reported
Constant
Currency
(millions)
North America
$
3,020.5
$
2,968.2
1.8
%
2.0
%
Europe
1,839.2
1,780.7
3.3
%
14.3
%
Asia
1,426.7
1,286.8
10.9
%
23.1
%
Other non-reportable segments
157.2
182.8
(14.0
%)
(13.9
%)
Net revenues
$
6,443.6
$
6,218.5
3.6
%
9.4
%
RALPH LAUREN
CORPORATION
NET REVENUES BY SALES
CHANNEL
(Unaudited)
Three Months Ended
April 1, 2023
April 2, 2022
North
America
Europe
Asia
Other
Total
North
America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
357.3
$
182.8
$
358.5
$
—
$
898.6
$
406.1
$
181.6
$
322.0
$
—
$
909.7
Wholesale
298.3
278.0
31.5
—
607.8
268.2
285.8
24.1
0.4
578.5
Licensing
—
—
—
34.4
34.4
—
—
—
34.5
34.5
Net revenues
$
655.6
$
460.8
$
390.0
$
34.4
$
1,540.8
$
674.3
$
467.4
$
346.1
$
34.9
$
1,522.7
Twelve Months Ended
April 1, 2023
April 2, 2022
North
America
Europe
Asia
Other
Total
North
America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
1,872.6
$
858.4
$
1,322.1
$
—
$
4,053.1
$
1,878.6
$
828.3
$
1,207.4
$
27.2
$
3,941.5
Wholesale
1,147.9
980.8
104.6
—
2,233.3
1,089.6
952.4
79.4
5.9
2,127.3
Licensing
—
—
—
157.2
157.2
—
—
—
149.7
149.7
Net revenues
$
3,020.5
$
1,839.2
$
1,426.7
$
157.2
$
6,443.6
$
2,968.2
$
1,780.7
$
1,286.8
$
182.8
$
6,218.5
RALPH LAUREN
CORPORATION
GLOBAL RETAIL STORE
NETWORK
(Unaudited)
April 1, 2023
April 2, 2022
North
America
Ralph Lauren Stores
48
46
Polo Outlet Stores
189
193
Total Directly Operated Stores
237
239
Concessions
1
1
Europe
Ralph Lauren Stores
43
36
Polo Outlet Stores
61
59
Total Directly Operated Stores
104
95
Concessions
29
29
Asia
Ralph Lauren Stores
118
93
Polo Outlet Stores
94
77
Total Directly Operated Stores
212
170
Concessions
692
654
Global Directly
Operated Stores and Concessions
Ralph Lauren Stores
209
175
Polo Outlet Stores
344
329
Total Directly Operated Stores
553
504
Concessions
722
684
Global Licensed
Stores
Total Licensed Stores
182
148
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
April 1, 2023
As Reported
Total
Adjustments(a)(b)
As Adjusted
(Reported $)
Foreign Currency
Impact
As Adjusted
(Constant $)
(millions, except per share
data)
Net revenues
$
1,540.8
$
—
$
1,540.8
$
57.2
$
1,598.0
Gross profit
950.6
2.2
952.8
53.5
1,006.3
Gross profit margin
61.7
%
61.8
%
63.0
%
Total other operating expenses, net
(910.4
)
32.5
(877.9
)
(30.5
)
(908.4
)
Operating expense margin
59.1
%
57.0
%
56.9
%
Operating income
40.2
34.7
74.9
23.0
97.9
Operating margin
2.6
%
4.9
%
6.1
%
Income before income taxes
49.2
34.7
83.9
Income tax provision
(16.9
)
(6.1
)
(23.0
)
Effective tax rate
34.3
%
27.3
%
Net income
$
32.3
$
28.6
$
60.9
Net income per diluted common share
$
0.48
$
0.42
$
0.90
SEGMENT
INFORMATION
REVENUE:
North America
$
655.6
$
—
$
655.6
$
1.7
$
657.3
Europe
460.8
—
460.8
25.2
486.0
Asia
390.0
—
390.0
30.3
420.3
Other non-reportable segments
34.4
—
34.4
—
34.4
Total revenue
$
1,540.8
$
—
$
1,540.8
$
57.2
$
1,598.0
OPERATING INCOME:
North America
$
68.4
$
11.7
$
80.1
$
0.3
$
80.4
Operating margin
10.4
%
12.2
%
12.2
%
Europe
89.1
0.3
89.4
10.8
100.2
Operating margin
19.3
%
19.4
%
20.6
%
Asia
55.4
—
55.4
13.0
68.4
Operating margin
14.2
%
14.2
%
16.3
%
Other non-reportable segments
32.3
—
32.3
Operating margin
93.9
%
93.9
%
Unallocated corporate expenses and
restructuring & other charges, net
(205.0
)
22.7
(182.3
)
Total operating income
$
40.2
$
34.7
$
74.9
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Twelve Months Ended
April 1, 2023
As Reported
Total
Adjustments(a)(c)
As Adjusted
(Reported $)
Foreign Currency
Impact
As Adjusted
(Constant $)
(millions, except per share
data)
Net revenues
$
6,443.6
$
—
$
6,443.6
$
360.0
$
6,803.6
Gross profit
4,165.8
15.4
4,181.2
330.3
4,511.5
Gross profit margin
64.6
%
64.9
%
66.3
%
Total other operating expenses, net
(3,461.6
)
50.6
(3,411.0
)
(165.8
)
(3,576.8
)
Operating expense margin
53.7
%
52.9
%
52.6
%
Operating income
704.2
66.0
770.2
164.5
934.7
Operating margin
10.9
%
12.0
%
13.7
%
Income before income taxes
691.9
66.0
757.9
Income tax provision
(169.2
)
(13.1
)
(182.3
)
Effective tax rate
24.5
%
24.0
%
Net income
$
522.7
$
52.9
$
575.6
Net income per diluted common share
$
7.58
$
0.76
$
8.34
SEGMENT
INFORMATION
REVENUE:
North America
$
3,020.5
$
—
$
3,020.5
$
5.6
$
3,026.1
Europe
1,839.2
—
1,839.2
196.3
2,035.5
Asia
1,426.7
—
1,426.7
157.9
1,584.6
Other non-reportable segments
157.2
—
157.2
0.2
157.4
Total revenue
$
6,443.6
$
—
$
6,443.6
$
360.0
$
6,803.6
OPERATING INCOME:
North America
$
543.2
$
21.9
$
565.1
$
0.7
565.8
Operating margin
18.0
%
18.7
%
18.7
%
Europe
406.5
0.8
407.3
106.6
513.9
Operating margin
22.1
%
22.1
%
25.2
%
Asia
289.6
—
289.6
58.8
348.4
Operating margin
20.3
%
20.3
%
22.0
%
Other non-reportable segments
146.4
—
146.4
Operating margin
93.1
%
93.1
%
Unallocated corporate expenses and
restructuring & other charges, net
(681.5
)
43.3
(638.2
)
Total operating income
$
704.2
$
66.0
$
770.2
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Three Months Ended
April 2, 2022
As Reported
Total
Adjustments(a)(e)
As Adjusted (14
week basis)
14 Week
Impact(d)
As Adjusted (13
week basis)
(millions, except per share
data)
Net revenues
$
1,522.7
$
—
$
1,522.7
$
(62.7
)
$
1,460.0
Gross profit
966.1
(1.8
)
964.3
(46.1
)
918.2
Gross profit margin
63.4
%
63.3
%
62.9
%
Total other operating expenses, net
(929.3
)
19.2
(910.1
)
24.4
(885.7
)
Operating expense margin
61.0
%
59.8
%
60.7
%
Operating income
36.8
17.4
54.2
(21.7
)
32.5
Operating margin
2.4
%
3.6
%
2.2
%
Income before income taxes
29.3
17.4
46.7
Income tax provision
(4.9
)
(6.0
)
(10.9
)
Effective tax rate
16.8
%
23.4
%
Net income
$
24.4
$
11.4
$
35.8
Net income per diluted common share
$
0.34
$
0.15
$
0.49
SEGMENT
INFORMATION
REVENUE:
North America
$
674.3
$
—
$
674.3
$
(29.9
)
$
644.4
Europe
467.4
—
467.4
(12.2
)
455.2
Asia
346.1
—
346.1
(20.6
)
325.5
Other non-reportable segments
34.9
—
34.9
—
34.9
Total revenue
$
1,522.7
$
—
$
1,522.7
$
(62.7
)
$
1,460.0
OPERATING INCOME:
North America
$
90.2
$
0.2
$
90.4
$
(6.2
)
84.2
Operating margin
13.4
%
13.4
%
13.1
%
Europe
90.6
3.6
94.2
(7.5
)
86.7
Operating margin
19.4
%
20.2
%
19.0
%
Asia
39.4
—
39.4
(12.8
)
26.6
Operating margin
11.4
%
11.4
%
8.2
%
Other non-reportable segments
32.2
—
32.2
Operating margin
92.2
%
92.2
%
Unallocated corporate expenses and
restructuring & other charges, net
(215.6
)
13.6
(202.0
)
Total operating income
$
36.8
$
17.4
$
54.2
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Twelve Months Ended
April 2, 2022
As Reported
Total
Adjustments(a)(f)
As Adjusted (53
week basis)
53 Week
Impact(d)
As Adjusted (52
week basis)
(millions, except per share
data)
Net revenues
$
6,218.5
$
—
$
6,218.5
$
(62.7
)
$
6,155.8
Gross profit
4,147.5
(13.3
)
4,134.2
(46.1
)
4,088.1
Gross profit margin
66.7
%
66.5
%
66.4
%
Total other operating expenses, net
(3,349.1
)
45.9
(3,303.2
)
24.4
(3,278.8
)
Operating expense margin
53.9
%
53.1
%
53.3
%
Operating income
798.4
32.6
831.0
(21.7
)
809.3
Operating margin
12.8
%
13.4
%
13.1
%
Income before income taxes
754.6
32.6
787.2
Income tax provision
(154.5
)
(9.4
)
(163.9
)
Effective tax rate
20.5
%
20.8
%
Net income
$
600.1
$
23.2
$
623.3
Net income per diluted common share
$
8.07
$
0.31
$
8.38
SEGMENT
INFORMATION
REVENUE:
North America
$
2,968.2
$
—
$
2,968.2
$
(29.9
)
$
2,938.3
Europe
1,780.7
—
1,780.7
(12.2
)
1,768.5
Asia
1,286.8
—
1,286.8
(20.6
)
1,266.2
Other non-reportable segments
182.8
—
182.8
—
182.8
Total revenue
$
6,218.5
$
—
$
6,218.5
$
(62.7
)
$
6,155.8
OPERATING INCOME:
North America
$
676.7
$
(10.9
)
$
665.8
$
(6.2
)
659.6
Operating margin
22.8
%
22.4
%
22.4
%
Europe
444.0
2.4
446.4
(7.5
)
438.9
Operating margin
24.9
%
25.1
%
24.8
%
Asia
228.8
1.1
229.9
(12.8
)
217.1
Operating margin
17.8
%
17.9
%
17.1
%
Other non-reportable segments
138.4
0.3
138.7
Operating margin
75.7
%
75.9
%
Unallocated corporate expenses and
restructuring & other charges, net
(689.5
)
39.7
(649.8
)
Total operating income
$
798.4
$
32.6
$
831.0
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Three Months Ended
March 30, 2019
As Reported
Total
Adjustments(a)(g)
As Adjusted
(millions, except per share
data)
Net revenues
$
1,505.7
$
—
$
1,505.7
Gross profit
901.5
4.1
905.6
Gross profit margin
59.9
%
60.1
%
Total other operating expenses, net
(873.6
)
64.2
(809.4
)
Operating expense margin
58.0
%
53.8
%
Operating income
27.9
68.3
96.2
Operating margin
1.9
%
6.4
%
Income before income taxes
35.3
68.3
103.6
Income tax provision
(3.7
)
(14.5
)
(18.2
)
Effective tax rate
10.6
%
17.5
%
Net income
$
31.6
$
53.8
$
85.4
Net income per diluted common share
$
0.39
$
0.68
$
1.07
SEGMENT
INFORMATION
OPERATING INCOME:
North America
$
108.8
$
3.6
$
112.4
Operating margin
15.4
%
15.9
%
Europe
98.6
5.0
103.6
Operating margin
22.5
%
23.6
%
Asia
37.7
1.5
39.2
Operating margin
13.8
%
14.3
%
Other non-reportable segments
23.1
1.2
24.3
Operating margin
26.8
%
28.2
%
Unallocated corporate expenses and
restructuring & other charges, net
(240.3
)
57.0
(183.3
)
Total operating income
$
27.9
$
68.3
$
96.2
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Twelve Months Ended
March 30, 2019
As Reported
Total
Adjustments(a)(h)
As Adjusted
(millions, except per share
data)
Net revenues
$
6,313.0
$
—
$
6,313.0
Gross profit
3,886.0
7.2
3,893.2
Gross profit margin
61.6
%
61.7
%
Total other operating expenses, net
(3,324.2
)
155.9
(3,168.3
)
Operating expense margin
52.7
%
50.2
%
Operating income
561.8
163.1
724.9
Operating margin
8.9
%
11.5
%
Income before income taxes
582.5
163.1
745.6
Income tax provision
(151.6
)
(6.5
)
(158.1
)
Effective tax rate
26.0
%
21.2
%
Net income
$
430.9
$
156.6
$
587.5
Net income per diluted common share
$
5.27
$
1.92
$
7.19
SEGMENT
INFORMATION
OPERATING INCOME:
North America
$
682.8
$
5.0
$
687.8
Operating margin
21.3
%
21.5
%
Europe
392.8
9.9
402.7
Operating margin
23.3
%
23.9
%
Asia
161.0
5.2
166.2
Operating margin
15.5
%
16.0
%
Other non-reportable segments
118.7
7.0
125.7
Operating margin
30.7
%
32.5
%
Unallocated corporate expenses and
restructuring & other charges, net
(793.5
)
136.0
(657.5
)
Total operating income
$
561.8
$
163.1
$
724.9
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 one-time income tax events are
recorded within the income tax benefit (provision) in the
consolidated statements of operations. Adjustments for all other
charges are recorded within restructuring and other charges, net in
the consolidated statements of operations.
(b)
Adjustments for the three months ended
April 1, 2023 include (i) charges of $13.3 million recorded in
connection with the Company's restructuring activities, largely
consisting of restructuring charges and impairment of assets; (ii)
additional impairment of assets of $9.5 million related to a
certain previously exited real estate location for which the
related lease agreement has not yet expired; (iii) other charges of
$6.2 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; (iv) a
$3.5 million charitable donation expense related to income received
from Regent, L.P. ("Regent") as a result of the Club Monaco
business exceeding previously defined revenue thresholds over a
specified time period; (v) non-routine inventory charges of $1.9
million largely recorded in connection with the Russia-Ukraine war
and delays in U.S. customs shipment reviews and approvals; and (vi)
expense of $0.3 million related to Russia-related bad debt reserve
adjustments.
(c)
Adjustments for the twelve months ended
April 1, 2023 include (i) other charges of $23.8 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; (ii) charges of $19.7 million
recorded in connection with the Company's restructuring activities,
largely consisting of restructuring charges and impairment of
assets; (iii) non-routine inventory charges of $15.1 million
largely recorded in connection with the Russia-Ukraine war and
delays in U.S. customs shipment reviews and approvals; (iv)
additional impairment of assets of $9.5 million related to a
certain previously exited real estate location for which the
related lease agreement has not yet expired; (v) a $3.5 million
charitable donation expense related to income received from Regent
during Fiscal 2023 as a result of the Club Monaco business
exceeding previously defined revenue thresholds over a specified
time period; (vi) income of $3.5 million related to the
beforementioned income received from Regent; and (v) benefit of
$2.1 million related to Russia-related bad debt reserve
adjustments.
(d)
The fourth quarter of Fiscal 2022
consisted of 14 weeks and the full Fiscal 2022 consisted of 53
weeks. The fourth quarter and full fiscal year of all other periods
presented herein consisted of 13 weeks and 52 weeks,
respectively.
(e)
Adjustments for the three months ended
April 2, 2022 include (i) other charges of $10.9 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 and non-income-related capital
taxes resulting from Swiss tax reform; (ii) a $4.0 million
charitable donation expense related to income received from Regent
during Fiscal 2022 in connection the Company's sale of its Club
Monaco business; (iii) charge of $3.6 million related to
non-routine bad debt expense recorded in connection with the
Russia-Ukraine war; (iv) benefit of $1.8 million related to
COVID-19-related inventory adjustments; (v) charges of $1.6 million
recorded in connection with the Company's restructuring activities,
consisting of restructuring charges and impairment of assets; and
(vi) benefit of $0.9 million related to income received from
Regent.
(f)
Adjustments for the twelve months ended
April 2, 2022 include (i) charges of $25.3 million recorded in
connection with the Company's restructuring activities, consisting
of restructuring charges, impairment of assets, and accelerated
stock-based compensation expense; (ii) other charges of $18.2
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 and
non-income-related capital taxes resulting from Swiss tax reform;
(iii) benefit of $13.3 million related to COVID-19-related
inventory adjustments; (iv) income of $4.0 million primarily
related to a certain revenue share clause in the Company's
agreement with Regent that entitled it to receive a portion of the
sales generated by the Club Monaco business during a four-month
business transition period; (v) a $4.0 million charitable donation
expense related to the beforementioned income received from Regent;
and (vi) net non-routine bad debt expense of $2.4 million recorded
in connection with the Russia-Ukraine war, partially offset by
favorable COVID-19-related bad debt reserve adjustments.
(g)
Adjustments for the three months ended
March 30, 2019 include (i) charges of $37.2 million recorded in
connection with the Company's restructuring activities, consisting
of restructuring charges, impairment of assets, and
inventory-related charges; (ii) additional impairment of assets of
$9.3 million related to underperforming stores as a result of
on-going store portfolio evaluation and the planned sale of a
corporate asset; and (iii) other charges of $21.8 million primarily
related to the Company's then new sabbatical leave program and
depreciation expense associated with its former Polo store at 711
Fifth Avenue in New York City.
(h)
Adjustments for the twelve months ended
March 30, 2019 include (i) charges of $111.5 million recorded in
connection with the Company's restructuring activities, consisting
of restructuring charges, impairment of assets, inventory-related
charges, and a loss on sale of property; (ii) additional impairment
of assets of $15.1 million related to underperforming stores as a
result of on-going store portfolio evaluation and the planned sale
of a corporate asset; and (iii) other charges of $36.5 million
primarily related to the Company's then new sabbatical leave
program, depreciation expense associated with its former Polo store
at 711 Fifth Avenue in New York City and its customs audit. The
income tax provision reflects enactment-related charges of $27.6
million recorded in connection with U.S. tax reform.
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. Fiscal 2022 was also
adjusted for the fiscal year's incremental week that occurred
during the fourth quarter. 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. The income tax benefit (provision) has
also been adjusted for certain other one-time income tax events and
other adjustments, as described in the footnotes to the non-U.S.
GAAP financial measures above. 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 2024 and first
quarter guidance excludes any potential restructuring-related and
other charges that may be incurred in future periods. The Company
is not able to provide a full reconciliation of these non-U.S. GAAP
financial measures to U.S. GAAP as it is not known at this time if
and when any such charges may be incurred in the future.
Accordingly, a reconciliation of the Company's non-U.S. GAAP based
financial measure guidance to the most directly comparable U.S.
GAAP measures cannot be provided at this time given the uncertain
nature of any such potential charges that may be incurred in future
periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230524005696/en/
Investor Relations: Corinna Van der Ghinst ir@ralphlauren.com Or
Corporate Communications rl-press@ralphlauren.com
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