- Second Quarter Revenue Increased 3% on a Reported Basis and 2%
in Constant Currency, Ahead of Expectations, Led by Continued
Momentum in Asia
- Global Direct-to-Consumer Comparable Store Sales Accelerated to
6% Growth in the Quarter, Driven by Positive Retail Comps Across
All Regions and Channels and 10% AUR Growth
- Delivered Gross and Operating Margins Above Our Outlook, with
Continued Brand Elevation and Expense Discipline More than
Offsetting Ongoing Product Cost Headwinds and Higher Planned
Marketing and Digital Investments in the Period
- Drove Healthy Inventory Positioning Entering Holiday, with
Global Inventories Down 5% to Prior Year
- Returned Approximately $275 Million to Shareholders Through Our
Dividend and Repurchase of Class A Common Stock This Fiscal
Year-to-Date
- Reiterated Full Year Fiscal 2024 Outlook of Low-Single Digit
Revenue Growth, Centering on 1% to 2%, and Adjusted Operating
Margin Expansion on Higher Expected Gross Margins, All in Constant
Currency
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 $2.19 on a reported
basis and $2.10 on an adjusted basis, excluding
restructuring-related and other net charges and one-time tax events
for the second quarter of Fiscal 2024. This compared to earnings
per diluted share of $2.18 on a reported basis and $2.23 on an
adjusted basis, excluding restructuring-related and other net
charges for the second quarter of Fiscal 2023.
"We inspire people to embrace their sense of individual style
through a timeless, elegant way of living," said Ralph Lauren,
Executive Chairman and Chief Creative Officer. "From our recent
fashion show in Brooklyn to championing the resilience of sport at
the U.S. Open, Wimbledon and Ryder Cup, there is a spirit of
authenticity to everything we do and it endures beyond any economic
or fashion cycle."
"Our teams delivered solid second quarter performance ahead of
our commitments with stronger top-line growth across all regions,
supported by our iconic brand, pricing power and continued
strategic investments," said Patrice Louvet, President and Chief
Executive Officer. "While we continue to navigate an uncertain
macro environment, we are driving offense across our Next Great
Chapter: Accelerate plan's multiple growth drivers with agility,
discipline and a clear focus on what we can control."
Key Achievements in Second Quarter Fiscal 2024
We delivered the following highlights across our Next Great
Chapter: Accelerate priorities in the second quarter of Fiscal
2024:
- Elevate and Energize Our Lifestyle Brand
- Continued to recruit high-value, younger consumers to the brand
and re-engage existing consumers through a diverse range of
cultural moments spanning fashion, music, gaming and sports,
notably: our Collection show at New York Fashion Week in September;
sponsorships of the U.S. Open, Wimbledon and Ryder Cup; the launch
of Polo Ralph Lauren x Fortnite Race to Greatness; another
successful Golden Week in Asia; and dressing Beyoncé in her
Renaissance World Tour
- Added 1.3 million new consumers to our direct-to-consumer
businesses and reached 55.9 million social media followers
globally, up low-double-digits to last year driven by growth on
multiple platforms across key markets
- Drive the Core and Expand for More
- Increased average unit retail ("AUR") by 10% across our
direct-to-consumer network in the second quarter, on top of an 18%
increase last year, reflecting the durability of our multi-pronged
elevation approach
- Drove momentum in our Core business, up high-single digits to
last year, as well as our high-potential categories — including
Women's, Outerwear and Home — up low-double digits to last year,
both in constant currency
- Product highlights this quarter included: the launch of our
latest iconic Ralph Lauren Collection handbag, the RL 888; U.S.
Open, Wimbledon, and Ryder Cup collections and LA28 Olympic jacket;
and limited edition P-Wing Fortnite Sneaker-Boot
- Win in Key Cities with Our Consumer Ecosystem
- By region, constant currency sales performance was led by Asia,
up 10% on a reported basis and 13% in constant currency with China
up more than 20% to last year. Europe grew 7% on a reported basis
but was flat in constant currency, with a previously reported
timing shift into the first quarter. North America declined 1%,
improving sequentially and above our expectations, driven by better
performance across all direct-to-consumer channels
- Continued to expand and scale our key city ecosystems in the
second quarter, including our first connected ecosystem in Canada
with a new luxury store experience in Toronto and the October
launch of our Canadian digital flagship RalphLauren.ca site
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.
Second Quarter Fiscal 2024 Income Statement Review
Net Revenue. In the second quarter of Fiscal 2024,
revenue increased 3% to $1.6 billion on a reported basis and was up
2% in constant currency. Foreign currency favorably impacted
revenue growth by approximately 170 basis points in the second
quarter.
Revenue performance for the Company's reportable segments in the
second quarter compared to the prior year period was as
follows:
- North America Revenue. North America revenue in the second
quarter decreased 1% to $718 million. In retail, comparable store
sales in North America improved to 4% growth, including a 4%
increase in digital commerce and a 4% increase in brick and mortar
stores. North America wholesale revenue decreased 7% as the Company
carefully manages sell-in to align with softer consumer demand in
the channel.
- Europe Revenue. Europe revenue in the second quarter increased
7% to $527 million on a reported basis and was flat in constant
currency. Results included approximately 5 points of negative
impact from lapping last year's favorable post-pandemic wholesale
allowances and a timing shift of wholesale shipments into the first
quarter of Fiscal 2024 to maximize full-price selling. In retail,
comparable store sales in Europe improved to 6% growth, with a 5%
increase in brick and mortar stores and a 14% increase in digital
commerce. Europe wholesale revenue was flat to prior year on a
reported basis and declined 7% in constant currency due to the
previously disclosed impacts noted above.
- Asia Revenue. Asia revenue in the second quarter increased 10%
to $348 million on a reported basis and 13% in constant currency.
Comparable store sales in Asia increased 8%, with a 7% increase in
our brick and mortar stores and a 19% increase in digital
commerce.
Gross Profit. Gross profit for the second quarter of
Fiscal 2024 was $1.1 billion and gross margin was 65.5%. Adjusted
gross margin was 65.4%, 80 basis points above the prior year on
both a reported and constant currency basis. Gross margins were
driven by strong AUR growth across all regions, lower freight and
favorable channel and geographic mix shifts, more than offsetting
continued pressure from raw material costs.
Operating Expenses. Operating expenses in the second
quarter of Fiscal 2024 were $906 million on a reported basis. On an
adjusted basis, operating expenses were $897 million, up 11% to
last year. Adjusted operating expense rate was 54.9%, compared to
51.2% in the prior year period. The increase was driven by higher
compensation and rent & occupancy costs, along with higher
digital and marketing investments in the quarter due to the planned
timing of key marketing campaigns.
Operating Income. Operating income for the second quarter
of Fiscal 2024 was $164 million and operating margin was 10.1% on a
reported basis. Adjusted operating income was $172 million and
operating margin was 10.5%, 290 basis points below the prior year.
Operating income for the Company's reportable segments in the
second quarter compared to the prior year period was as
follows:
- North America Operating Income. North America operating income
in the second quarter was $110 million on a reported basis and $108
million on an adjusted basis. Adjusted North America operating
margin was 15.1%, down 210 basis points to last year, with strong
gross margin expansion more than offset by higher operating
expenses due to the timing of planned strategic investments.
- Europe Operating Income. Europe operating income in the second
quarter was $132 million on both a reported and adjusted basis.
Adjusted Europe operating margin was 25.1%, down 220 basis points
to last year. Foreign currency favorably impacted adjusted
operating margin rate by 130 basis points in the second
quarter.
- Asia Operating Income. Asia operating income in the second
quarter was $68 million on both a reported and adjusted basis.
Adjusted Asia operating margin was 19.6%, down 120 basis points to
last year.
Net Income and EPS. Net income in the second quarter of
Fiscal 2024 was $147 million, or $2.19 per diluted share on a
reported basis. On an adjusted basis, net income was $141 million,
or $2.10 per diluted share. This compared to net income of $151
million, or $2.18 per diluted share on a reported basis, and net
income of $154 million, or $2.23 per diluted share on an adjusted
basis, for the second quarter of Fiscal 2023.
In the second quarter of Fiscal 2024, the Company had an
effective tax rate of approximately 11% on a reported basis and 18%
on an adjusted basis. This compared to an effective tax rate of
approximately 25% on both a reported basis and adjusted basis in
the prior year period.
Balance Sheet and Cash Flow Review
The Company ended the second quarter of Fiscal 2024 with $1.5
billion in cash and short-term investments and $1.1 billion in
total debt, compared to $1.4 billion and $1.1 billion,
respectively, at the end of the second quarter of Fiscal 2023.
Inventory at the end of the second quarter of Fiscal 2024 was
$1.2 billion, down 5% compared to the prior year period, with a
decline in North America partly offset by an increase in Asia to
support growth initiatives and Europe aligned with revenue growth
expectations.
The Company repurchased approximately $125 million of Class A
Common Stock in the second quarter.
Full Year Fiscal 2024 and Third Quarter Outlook
The Company's outlook is based on its best assessment of the
current geopolitical and macroeconomic environment, including
inflationary pressures and other consumer spending-related
headwinds, and foreign currency volatility, among others. The full
year Fiscal 2024 and third 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 continues to expect revenues to
increase approximately low-single digits to last year on a constant
currency basis, centering around 1% to 2%. This outlook reflects
slightly increased caution around the wholesale channel. Based on
current exchange rates, foreign currency is now expected to
negatively impact revenue growth by approximately 50 basis points
in Fiscal 2024.
The Company continues to expect operating margin for Fiscal 2024
to expand approximately 30 to 50 basis points in constant currency
to 12.3% to 12.5%, driven by gross margin expansion. Foreign
currency is expected to negatively impact operating margin by about
10 basis points in Fiscal 2024. Gross margin is now expected to
increase approximately 120 to 170 basis points in constant
currency, up from the prior outlook of 100 basis points, with
reduced freight costs, favorable channel and geographic mix and
continued growth in AUR more than offsetting product cost
inflation. Foreign currency is still expected to negatively impact
gross margins by approximately 30 basis points in Fiscal 2024.
Gross margin expansion is expected to more than offset higher
operating expenses as a percent of revenue due to channel mix
shifts and as the Company invests in long-term strategic growth
initiatives, notably digital and key city ecosystem expansion.
For the third quarter, the Company expects revenue to be up
approximately 1% to 2% to last year in constant currency. Foreign
currency is expected to negatively impact revenue growth by
approximately 30 basis points.
Operating margin for the third quarter is expected to be roughly
flat in constant currency, with about 10 basis points of foreign
currency benefit. The Company expects constant currency gross
margin expansion of approximately 100 to 150 basis points to be
largely offset by higher operating expenses due to the timing of
strategic investments in the period, with a higher proportion of
marketing and ecosystem investments planned in the second and third
quarters of the fiscal year. Foreign currency is expected to
negatively impact gross margin by approximately 20 basis points in
the third quarter.
Full year Fiscal 2024 tax rate is now expected in the range of
approximately 22% to 23%, assuming a continuation of current tax
laws, while third quarter tax rate is expected in the range of 23%
to 24%.
The Company expects capital expenditures for Fiscal 2024 of
approximately $250 million.
Conference Call
As previously announced, the Company will host a conference call
and live online webcast today, Wednesday, November 8, 2023, at 9:00
A.M. Eastern. Listeners may access a live broadcast of the
conference call on the Company 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 Second Quarter 2024 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, Wednesday, November 8,
2023 through 6:00 P.M. Eastern, Wednesday, November 15, 2023 by
dialing 203-369-3269 or 800-391-9853 and entering passcode
3954.
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. 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 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 Russia-Ukraine and Israel-Hamas wars,
civil and political unrest, diplomatic tensions between the U.S.
and other countries, rising interest rates, and 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; 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 to
our business resulting from pandemic diseases such as COVID-19,
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 on our operations and on our suppliers and
customers resulting from man-made or natural disasters, including
pandemic diseases, severe weather, geological events, and other
catastrophic events, such as terrorist attacks and military
conflicts; 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 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)
September 30,
2023
April 1, 2023
October 1, 2022
(millions)
ASSETS
Current assets:
Cash and cash equivalents
$
1,381.8
$
1,529.3
$
1,107.1
Short-term investments
85.1
36.4
309.6
Accounts receivable, net of allowances
461.1
447.7
489.6
Inventories
1,195.3
1,071.3
1,261.4
Income tax receivable
50.0
50.7
54.1
Prepaid expenses and other current
assets
221.2
188.7
218.8
Total current assets
3,394.5
3,324.1
3,440.6
Property and equipment, net
875.6
955.5
899.1
Operating lease right-of-use assets
1,088.2
1,134.0
1,016.7
Deferred tax assets
262.7
255.1
243.0
Goodwill
883.0
898.9
865.5
Intangible assets, net
82.2
88.9
95.6
Other non-current assets
136.9
133.0
173.1
Total assets
$
6,723.1
$
6,789.5
$
6,733.6
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
460.1
$
371.6
$
498.0
Current income tax payable
56.3
59.7
89.9
Current operating lease liabilities
270.9
266.7
244.6
Accrued expenses and other current
liabilities
823.1
795.5
877.1
Total current liabilities
1,610.4
1,493.5
1,709.6
Long-term debt
1,139.5
1,138.5
1,137.5
Long-term finance lease liabilities
266.9
315.3
323.8
Long-term operating lease liabilities
1,079.0
1,141.1
1,036.7
Non-current income tax payable
42.2
75.9
73.6
Non-current liability for unrecognized tax
benefits
100.7
93.8
86.6
Other non-current liabilities
115.2
100.9
110.2
Total liabilities
4,353.9
4,359.0
4,478.0
Equity:
Common stock
1.3
1.3
1.3
Additional paid-in-capital
2,875.0
2,824.3
2,789.5
Retained earnings
6,779.7
6,598.2
6,448.1
Treasury stock, Class A, at cost
(7,024.0
)
(6,797.3
)
(6,726.0
)
Accumulated other comprehensive loss
(262.8
)
(196.0
)
(257.3
)
Total equity
2,369.2
2,430.5
2,255.6
Total liabilities and equity
$
6,723.1
$
6,789.5
$
6,733.6
Net Cash & Short-term
Investments(a)
$
327.4
$
427.2
$
279.2
Cash & Short-term Investments
1,466.9
1,565.7
1,416.7
_____________________
(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
Six Months Ended
September 30,
2023
October 1, 2022
September 30,
2023
October 1, 2022
(millions, except per share
data)
Net revenues
$
1,633.0
$
1,579.9
$
3,129.5
$
3,070.5
Cost of goods sold
(562.9
)
(556.8
)
(1,027.4
)
(1,046.0
)
Gross profit
1,070.1
1,023.1
2,102.1
2,024.5
Selling, general, and administrative
expenses
(896.3
)
(809.5
)
(1,726.3
)
(1,630.1
)
Restructuring and other charges, net
(9.3
)
(6.9
)
(44.9
)
(12.5
)
Total other operating expenses,
net
(905.6
)
(816.4
)
(1,771.2
)
(1,642.6
)
Operating income
164.5
206.7
330.9
381.9
Interest expense
(10.0
)
(9.5
)
(20.0
)
(21.3
)
Interest income
15.8
6.6
31.5
10.2
Other expense, net
(4.8
)
(3.7
)
(6.3
)
(8.5
)
Income before income taxes
165.5
200.1
336.1
362.3
Income tax provision
(18.6
)
(49.6
)
(57.1
)
(88.4
)
Net income
$
146.9
$
150.5
$
279.0
$
273.9
Net income per common share:
Basic
$
2.24
$
2.21
$
4.24
$
3.97
Diluted
$
2.19
$
2.18
$
4.15
$
3.90
Weighted-average common shares
outstanding:
Basic
65.6
68.0
65.7
69.0
Diluted
67.2
69.0
67.3
70.3
Dividends declared per share
$
0.75
$
0.75
$
1.50
$
1.50
RALPH LAUREN
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
Six Months Ended
September 30,
2023
October 1, 2022
(millions)
Cash flows from operating
activities:
Net income
$
279.0
$
273.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
116.8
108.1
Deferred income tax expense
6.1
36.1
Stock-based compensation expense
50.7
40.7
Bad debt expense
0.3
0.6
Other non-cash charges
16.3
13.3
Changes in operating assets and
liabilities:
Accounts receivable
(26.5
)
(113.8
)
Inventories
(151.0
)
(345.8
)
Prepaid expenses and other current
assets
(37.8
)
(59.6
)
Accounts payable and accrued
liabilities
154.7
31.8
Income tax receivables and payables
(41.8
)
28.9
Operating lease right-of-use assets and
liabilities, net
(18.2
)
(12.3
)
Other balance sheet changes
(5.0
)
—
Net cash provided by operating
activities
343.6
1.9
Cash flows from investing
activities:
Capital expenditures
(82.4
)
(83.9
)
Purchases of investments
(158.6
)
(431.2
)
Proceeds from sales and maturities of
investments
108.1
849.2
Other investing activities
—
(6.0
)
Net cash provided by (used in)
investing activities
(132.9
)
328.1
Cash flows from financing
activities:
Repayments of long-term debt
—
(500.0
)
Payments of finance lease obligations
(11.2
)
(10.8
)
Payments of dividends
(98.2
)
(99.1
)
Repurchases of common stock, including
shares surrendered for tax withholdings
(225.7
)
(417.3
)
Net cash used in financing
activities
(335.1
)
(1,027.2
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(23.9
)
(60.6
)
Net decrease in cash, cash equivalents,
and restricted cash
(148.3
)
(757.8
)
Cash, cash equivalents, and restricted
cash at beginning of period
1,536.9
1,872.0
Cash, cash equivalents, and restricted
cash at end of period
$
1,388.6
$
1,114.2
RALPH LAUREN
CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended
Six Months Ended
September 30,
2023
October 1, 2022
September 30,
2023
October 1, 2022
(millions)
Net revenues:
North America
$ 717.8
$ 726.6
$ 1,349.5
$ 1,427.3
Europe
526.8
493.5
977.3
909.1
Asia
348.4
316.4
725.9
650.5
Other non-reportable segments
40.0
43.4
76.8
83.6
Total net revenues
$ 1,633.0
$ 1,579.9
$ 3,129.5
$ 3,070.5
Operating income:
North America
$ 110.2
$ 127.1
$ 235.5
$ 259.9
Europe
132.4
134.6
229.6
207.8
Asia
68.4
65.7
161.7
144.4
Other non-reportable segments
34.1
40.0
67.9
77.2
345.1
367.4
694.7
689.3
Unallocated corporate expenses
(171.3)
(153.8)
(318.9)
(294.9)
Unallocated restructuring and other
charges, net
(9.3)
(6.9)
(44.9)
(12.5)
Total operating income
$ 164.5
$ 206.7
$ 330.9
$ 381.9
RALPH LAUREN
CORPORATION
CONSTANT CURRENCY FINANCIAL
MEASURES
(Unaudited)
Comparable Store Sales Data
September 30, 2023
Three Months Ended
Six Months Ended
% Change
% Change
Constant Currency
Constant Currency
North America:
Digital commerce
4
%
(2
%)
Brick and mortar
4
%
(1
%)
Total North America
4
%
(1
%)
Europe:
Digital commerce
14
%
11
%
Brick and mortar
5
%
3
%
Total Europe
6
%
4
%
Asia:
Digital commerce
19
%
15
%
Brick and mortar
7
%
10
%
Total Asia
8
%
11
%
Total Ralph Lauren Corporation
6
%
4
%
Operating Segment Net Revenues
Data
Three Months Ended
% Change
September 30,
2023
October 1, 2022
As Reported
Constant
Currency
(millions)
North America
$
717.8
$
726.6
(1.2
%)
(1.1
%)
Europe
526.8
493.5
6.8
%
(0.5
%)
Asia
348.4
316.4
10.1
%
12.6
%
Other non-reportable segments
40.0
43.4
(7.9
%)
(7.9
%)
Net revenues
$
1,633.0
$
1,579.9
3.4
%
1.7
%
Six Months Ended
% Change
September 30,
2023
October 1, 2022
As Reported
Constant
Currency
(millions)
North America
$
1,349.5
$
1,427.3
(5.4
%)
(5.3
%)
Europe
977.3
909.1
7.5
%
3.0
%
Asia
725.9
650.5
11.6
%
15.2
%
Other non-reportable segments
76.8
83.6
(8.2
%)
(8.2
%)
Net revenues
$
3,129.5
$
3,070.5
1.9
%
1.4
%
RALPH LAUREN
CORPORATION
NET REVENUES BY SALES
CHANNEL
(Unaudited)
Three Months Ended
September 30, 2023
October 1, 2022
North America
Europe
Asia
Other
Total
North America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
437.8
$
238.4
$
318.1
$
—
$
994.3
$
424.0
$
204.8
$
288.2
$
—
$
917.0
Wholesale
280.0
288.4
30.3
—
598.7
302.6
288.7
28.2
—
619.5
Licensing
—
—
—
40.0
40.0
—
—
—
43.4
43.4
Net revenues
$
717.8
$
526.8
$
348.4
$
40.0
$
1,633.0
$
726.6
$
493.5
$
316.4
$
43.4
$
1,579.9
Six Months Ended
September 30, 2023
October 1, 2022
North America
Europe
Asia
Other
Total
North America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
848.8
$
465.1
$
670.2
$
—
$
1,984.1
$
861.8
$
420.7
$
602.1
$
—
$
1,884.6
Wholesale
500.7
512.2
55.7
—
1,068.6
565.5
488.4
48.4
—
1,102.3
Licensing
—
—
—
76.8
76.8
—
—
—
83.6
83.6
Net revenues
$
1,349.5
$
977.3
$
725.9
$
76.8
$
3,129.5
$
1,427.3
$
909.1
$
650.5
$
83.6
$
3,070.5
RALPH LAUREN
CORPORATION
GLOBAL RETAIL STORE
NETWORK
(Unaudited)
September 30,
2023
October 1, 2022
North
America
Ralph Lauren Stores
49
46
Polo Outlet Stores
187
193
Total Directly Operated Stores
236
239
Concessions
1
1
Europe
Ralph Lauren Stores
44
39
Polo Outlet Stores
60
59
Total Directly Operated Stores
104
98
Concessions
27
29
Asia
Ralph Lauren Stores
128
107
Polo Outlet Stores
96
90
Total Directly Operated Stores
224
197
Concessions
682
682
Global Directly
Operated Stores and Concessions
Ralph Lauren Stores
221
192
Polo Outlet Stores
343
342
Total Directly Operated Stores
564
534
Concessions
710
712
Global Licensed
Stores
Total Licensed Stores
194
118
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
September 30, 2023
As Reported
Total
Adjustments(a)(b)
As Adjusted
(Reported $)
Foreign Currency
Impact
As Adjusted
(Constant $)
(millions, except per share
data)
Net revenues
$
1,633.0
$
—
$
1,633.0
$
(27.1
)
$
1,605.9
Gross profit
1,070.1
(1.8
)
1,068.3
(18.8
)
1,049.5
Gross profit margin
65.5
%
65.4
%
65.4
%
Total other operating expenses, net
(905.6
)
9.0
(896.6
)
4.9
(891.7
)
Operating expense margin
55.5
%
54.9
%
55.5
%
Operating income
164.5
7.2
171.7
(13.9
)
157.8
Operating margin
10.1
%
10.5
%
9.8
%
Income before income taxes
165.5
7.2
172.7
Income tax provision
(18.6
)
(13.2
)
(31.8
)
Effective tax rate
11.2
%
18.5
%
Net income
$
146.9
$
(6.0
)
$
140.9
Net income per diluted common share
$
2.19
$
2.10
SEGMENT
INFORMATION
REVENUE:
North America
$
717.8
$
—
$
717.8
$
0.9
$
718.7
Europe
526.8
—
526.8
(35.9
)
490.9
Asia
348.4
—
348.4
7.9
356.3
Other non-reportable segments
40.0
—
40.0
—
40.0
Total revenue
$
1,633.0
$
—
$
1,633.0
$
(27.1
)
$
1,605.9
OPERATING INCOME:
North America
$
110.2
$
(2.1
)
$
108.1
Operating margin
15.4
%
15.1
%
Europe
132.4
—
132.4
Operating margin
25.1
%
25.1
%
Asia
68.4
—
68.4
Operating margin
19.6
%
19.6
%
Other non-reportable segments
34.1
—
34.1
Operating margin
85.2
%
85.2
%
Unallocated corporate expenses and
restructuring & other charges, net
(180.6
)
9.3
(171.3
)
Total operating income
$
164.5
$
7.2
$
171.7
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Six Months Ended
September 30, 2023
As Reported
Total
Adjustments(a)(c)
As Adjusted
(Reported $)
Foreign Currency
Impact
As Adjusted
(Constant $)
(millions, except per share
data)
Net revenues
$
3,129.5
$
—
$
3,129.5
$
(15.3
)
$
3,114.2
Gross profit
2,102.1
(3.6
)
2,098.5
(3.6
)
2,094.9
Gross profit margin
67.2
%
67.1
%
67.3
%
Total other operating expenses, net
(1,771.2
)
44.5
(1,726.7
)
(3.2
)
(1,729.9
)
Operating expense margin
56.6
%
55.2
%
55.6
%
Operating income
330.9
40.9
371.8
(6.8
)
365.0
Operating margin
10.6
%
11.9
%
11.7
%
Income before income taxes
336.1
40.9
377.0
Income tax provision
(57.1
)
(21.0
)
(78.1
)
Effective tax rate
17.0
%
20.7
%
Net income
$
279.0
$
19.9
$
298.9
Net income per diluted common share
$
4.15
$
4.44
SEGMENT
INFORMATION
REVENUE:
North America
$
1,349.5
$
—
$
1,349.5
$
2.5
$
1,352.0
Europe
977.3
—
977.3
(41.3
)
936.0
Asia
725.9
—
725.9
23.5
749.4
Other non-reportable segments
76.8
—
76.8
—
76.8
Total revenue
$
3,129.5
$
—
$
3,129.5
$
(15.3
)
$
3,114.2
OPERATING INCOME:
North America
$
235.5
$
(3.8
)
$
231.7
Operating margin
17.4
%
17.2
%
Europe
229.6
(0.2
)
229.4
Operating margin
23.5
%
23.5
%
Asia
161.7
—
161.7
Operating margin
22.3
%
22.3
%
Other non-reportable segments
67.9
—
67.9
Operating margin
88.4
%
88.4
%
Unallocated corporate expenses and
restructuring & other charges, net
(363.8
)
44.9
(318.9
)
Total operating income
$
330.9
$
40.9
$
371.8
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Three Months Ended
October 1, 2022
As Reported
Total
Adjustments(a)(d)
As Adjusted
(millions, except per share
data)
Net revenues
$
1,579.9
$
—
$
1,579.9
Gross profit
1,023.1
(2.4
)
1,020.7
Gross profit margin
64.8
%
64.6
%
Total other operating expenses, net
(816.4
)
7.1
(809.3
)
Operating expense margin
51.7
%
51.2
%
Operating income
206.7
4.7
211.4
Operating margin
13.1
%
13.4
%
Income before income taxes
200.1
4.7
204.8
Income tax provision
(49.6
)
(1.2
)
(50.8
)
Effective tax rate
24.8
%
24.8
%
Net income
$
150.5
$
3.5
$
154.0
Net income per diluted common share
$
2.18
$
2.23
SEGMENT
INFORMATION
OPERATING INCOME:
North America
$
127.1
$
(2.4
)
$
124.7
Operating margin
17.5
%
17.2
%
Europe
134.6
—
134.6
Operating margin
27.3
%
27.3
%
Asia
65.7
—
65.7
Operating margin
20.8
%
20.8
%
Other non-reportable segments
40.0
—
40.0
Operating margin
92.3
%
92.3
%
Unallocated corporate expenses and
restructuring & other charges, net
(160.7
)
7.1
(153.6
)
Total operating income
$
206.7
$
4.7
$
211.4
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Six Months Ended
October 1, 2022
As Reported
Total
Adjustments(a)(e)
As Adjusted
(millions, except per share
data)
Net revenues
$
3,070.5
$
—
$
3,070.5
Gross profit
2,024.5
9.2
2,033.7
Gross profit margin
65.9
%
66.2
%
Total other operating expenses, net
(1,642.6
)
10.3
(1,632.3
)
Operating expense margin
53.5
%
53.2
%
Operating income
381.9
19.5
401.4
Operating margin
12.4
%
13.1
%
Income before income taxes
362.3
19.5
381.8
Income tax provision
(88.4
)
(4.8
)
(93.2
)
Effective tax rate
24.4
%
24.4
%
Net income
$
273.9
$
14.7
$
288.6
Net income per diluted common share
$
3.90
$
4.11
SEGMENT
INFORMATION
OPERATING INCOME:
North America
$
259.9
$
6.5
$
266.4
Operating margin
18.2
%
18.7
%
Europe
207.8
0.3
208.1
Operating margin
22.9
%
22.9
%
Asia
144.4
—
144.4
Operating margin
22.2
%
22.2
%
Other non-reportable segments
77.2
—
77.2
Operating margin
92.3
%
92.3
%
Unallocated corporate expenses and
restructuring & other charges, net
(307.4
)
12.7
(294.7
)
Total operating income
$
381.9
$
19.5
$
401.4
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) and
impairment of assets are recorded within selling, general, and
administrative ("SG&A") expenses 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
September 30, 2023 include (i) charges of $6.8 million recorded in
connection with the Company's restructuring activities, primarily
associated with severance and benefit costs; (ii) other charges of
$4.5 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)
income of $2.0 million related to consideration received from
Regent, L.P. ("Regent") in connection with the Company's previously
sold Club Monaco business; (iv) non-routine inventory benefits of
$1.8 million primarily related to reversals of amounts previously
recognized in connection with delays in U.S. customs shipment
reviews and approvals; and (v) benefit of $0.3 million primarily
related to Russia-related bad debt reserve adjustments.
Additionally, the income tax provision reflects a benefit of $11.8
million recorded in connection with Swiss tax reform and the
European Union's anti-tax avoidance directive.
(c)
Adjustments for the six months ended
September 30, 2023 include (i) charges of $37.3 million recorded in
connection with the Company's restructuring activities, primarily
associated with severance and benefit costs; (ii) other charges of
$9.6 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)
non-routine inventory benefits of $3.6 million primarily related to
reversals of amounts previously recognized in connection with
delays in U.S. customs shipment reviews and approvals and the
COVID-19 pandemic; (iv) income of $2.0 million related to
consideration received from Regent in connection with the Company's
previously sold the Club Monaco business; and (v) benefit of $0.4
million primarily related to Russia-related bad debt reserve
adjustments. Additionally, the income tax provision reflects a
benefit of $11.8 million recorded in connection with Swiss tax
reform and the European Union's anti-tax avoidance directive.
(d)
Adjustments for the three months ended
October 1, 2022 include (i) charges of $4.9 million recorded in
connection with the Company's restructuring activities; (ii) other
charges of $5.7 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) income of $3.5 million related to consideration
received from Regent in connection with the Company's previously
sold the Club Monaco business; and (iv) benefit of $2.4 million
related to COVID-19-related inventory adjustments.
(e)
Adjustments for the six months ended
October 1, 2022 include (i) other charges of $10.6 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) non-routine
inventory charges of $9.2 million largely recorded in connection
with the Russia-Ukraine war; (iii) charges of $5.6 million recorded
in connection with the Company's restructuring activities; (iv)
income of $3.5 million related to consideration received from
Regent in connection with the Company's previously sold the Club
Monaco business; and (v) benefit of $2.4 million related to
Russia-related bad debt reserve adjustments.
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. 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 third
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/20231107704161/en/
Investor Relations: Corinna Van der Ghinst ir@ralphlauren.com Or
Corporate Communications rl-press@ralphlauren.com
Ralph Lauren (NYSE:RL)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025
Ralph Lauren (NYSE:RL)
Gráfica de Acción Histórica
De Ene 2024 a Ene 2025
