- Third Quarter Revenue Increased 6% on a Reported Basis and 5%
in Constant Currency, with All Regions Exceeding Expectations Led
by Asia
- Global Direct-to-Consumer Comparable Store Sales Accelerated to
9% Growth in the Quarter, Driven by Positive Retail Comps Across
All Regions and Channels
- Operating Margins Exceeded Our Outlook, with Continued Brand
Elevation and Expense Discipline More than Offsetting Ongoing
Product Cost Headwinds and Investments in Marketing and Ecosystem
Expansion in the Period
- Reported Diluted EPS Growth of 31% and Adjusted EPS Growth of
24%, Ahead of Our Expectations Reflecting Strong Operating Profit
Growth and Discrete Tax Benefits in the Quarter
- Exited Holiday with Healthy Inventory Levels, with Global
Inventories Down 15% to Prior Year
- Returned Approximately $425 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, Now Centering on 2%, and Adjusted Gross and
Operating Margin Expansion, 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 $4.19, up 31% to prior
year on a reported basis and $4.17, up 24% on an adjusted basis,
excluding restructuring-related and other net charges for the third
quarter of Fiscal 2024. This compared to earnings per diluted share
of $3.20 on a reported basis and $3.35 on an adjusted basis,
excluding restructuring-related and other net charges for the third
quarter of Fiscal 2023.
"Our vision inspires people to live the life of their dreams,"
said Ralph Lauren, Executive Chairman and Chief Creative Officer.
"And this holiday season, our teams around the world brought this
to life in iconic products and campaigns marked with timeless
elegance and a spirit of joy."
"We delivered a strong holiday, with continued progress on our
Next Great Chapter: Accelerate plan and third quarter results that
exceeded our expectations led by continued momentum in our
direct-to-consumer channels," said Patrice Louvet, President and
Chief Executive Officer. "These results underscore the diversity of
our strategic growth drivers around the world in a still-volatile
operating environment as well as our culture of operating
discipline and agility."
Key Achievements in Third Quarter Fiscal 2024
We delivered the following highlights across our Next Great
Chapter: Accelerate priorities in the third quarter of Fiscal
2024:
- Elevate and Energize Our Lifestyle Brand
- Delivered our strongest growth in new customer acquisition and
loyalty since the pandemic with 1.7 million new consumers in our
direct-to-consumer businesses and accelerated net promoter scores
over the holiday quarter
- Created powerful, authentic connections with consumers across
key cultural moments including; our global "Season for Dreaming"
Holiday 2023 campaign with key city takeovers; successful Singles
Day activations in Asia; our inaugural Artist in Residence
collaboration with Naiomi Glasses, a groundbreaking partnership
focused on empowering and celebrating artisans within the
communities that have historically inspired our designs; and
dressing Taylor Swift on the cover of TIME's 2023 Person of the
Year issue
- Drive the Core and Expand for More
- Increased average unit retail ("AUR") by 9% across our
direct-to-consumer network in the third quarter, on top of a 10%
increase last year, reflecting the durability of our multi-pronged
elevation approach
- Drove continued momentum in both our Core business and
high-potential categories, both up low-double-digits to last year
in constant currency and outpacing total company growth
- Product highlights this quarter included: Polo Country x
Element Skateboards, an exclusive capsule of unisex styles and
skateboards celebrating the great outdoors; our limited-edition
Polo ID collaboration with Mr. Bags in China; and our Ralph Lauren
Pink Pony collection, supporting our longstanding commitment to
cancer care
- Win in Key Cities with Our Consumer Ecosystem
- By region, constant currency sales performance exceeded our
expectations led by Asia, up 16% on a reported basis and 17% in
constant currency with China up more than 30% to last year. Europe
grew 11% on a reported basis and 6% in constant currency. North
America was approximately flat, representing a sequential
improvement from the first half of Fiscal 2024 driven by stronger
direct-to-consumer performance
- Continued to expand and scale our key city ecosystems in the
third quarter, including: our new emblematic store opening at
Marina Bay Sands in Singapore, our first Ralph Lauren stores in
Prague and North Carolina, the launch of our digital commerce
flagship in Canada and our first Ralph’s Coffee in Paris and the
United Arab Emirates
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.
Third Quarter Fiscal 2024 Income Statement Review
Net Revenue. In the third quarter of Fiscal 2024, revenue
increased 6% to $1.9 billion on a reported basis and was up 5% in
constant currency. Foreign currency favorably impacted revenue
growth by approximately 90 basis points in the third quarter.
Revenue performance for the Company's reportable segments in the
third quarter compared to the prior year period was as follows:
- North America Revenue. North America revenue in the third
quarter was $933 million, approximately flat to last year. In
retail, comparable store sales in North America increased 5%,
exceeding expectations, led by a 6% increase in brick and mortar
stores and 4% increase in digital commerce. North America wholesale
revenue decreased 15%, in-line with our expectations as the Company
carefully manages sell-in to align with consumer demand in the
channel. We continue to evaluate our brand presence on a
door-by-door basis, resulting in approximately 20 department store
exits completed in the region this fiscal year.
- Europe Revenue. Europe revenue in the third quarter increased
11% to $522 million on a reported basis and 6% 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 earlier in the
year to maximize full-price selling. In retail, comparable store
sales in Europe accelerated to 11% growth, with a 10% increase in
brick and mortar stores and a 12% increase in digital commerce.
Europe wholesale revenue increased 5% to prior year on a reported
basis and was approximately flat in constant currency, with
stronger re-order trends largely offsetting the
previously-disclosed impacts noted above.
- Asia Revenue. Asia revenue in the third quarter increased 16%
to $446 million on a reported basis and 17% in constant currency.
Comparable store sales in Asia increased 14%, with a 13% increase
in our brick and mortar stores and a 25% increase in digital
commerce.
Gross Profit. Gross profit for the third quarter of
Fiscal 2024 was $1.3 billion and gross margin was 66.5%. Adjusted
gross margin was 66.4%, 120 basis points above the prior year.
Gross margins were driven by lower freight costs, favorable channel
and geographic mix shifts, and AUR growth across all regions more
than offsetting continued pressure from raw material costs. Recent
pressure from cotton inflation is still expected to abate starting
in Spring 2024 based on moderating cotton costs.
Operating Expenses. Operating expenses in the third
quarter of Fiscal 2024 were $968 million on a reported basis. On an
adjusted basis, operating expenses were also $968 million, up 7% to
last year. Adjusted operating expense rate was 50.0%, compared to
49.2% in the prior year period. The increase was driven by channel
and geographic mix shift resulting from stronger growth in the
Company's international and direct-to-consumer businesses.
Strategic investments in the quarter included higher compensation
and rent & occupancy costs, along with higher marketing and key
city ecosystem investments in the quarter due to the planned timing
of launches and holiday campaigns.
Operating Income. Operating income for the third quarter
of Fiscal 2024 was $318 million and operating margin was 16.4% on a
reported basis. On an adjusted basis, operating income was also
$318 million and operating margin was 16.4%, 40 basis points above
the prior year. Operating income for the Company's reportable
segments in the third quarter compared to the prior year period was
as follows:
- North America Operating Income. North America operating income
in the third quarter was $205 million on a reported basis and $204
million on an adjusted basis. Adjusted North America operating
margin was 21.8%, down 150 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,
particularly in digital and marketing.
- Europe Operating Income. Europe operating income in the third
quarter was $123 million on both a reported and adjusted basis.
Adjusted Europe operating margin was 23.7%, up 30 basis points to
last year. Foreign currency favorably impacted adjusted operating
margin rate by 20 basis points in the third quarter.
- Asia Operating Income. Asia operating income in the third
quarter was $108 million on both a reported and adjusted basis.
Adjusted Asia operating margin was 24.2%, up 90 basis points to
last year. Foreign currency favorably impacted adjusted operating
margin rate by 10 basis points in the third quarter.
Net Income and EPS. Net income in the third quarter of
Fiscal 2024 was $277 million, or $4.19 per diluted share on a
reported basis. On an adjusted basis, net income was $275 million,
or $4.17 per diluted share. This compared to net income of $216
million, or $3.20 per diluted share on a reported basis, and net
income of $226 million, or $3.35 per diluted share on an adjusted
basis, for the third quarter of Fiscal 2023.
In the third quarter of Fiscal 2024, the Company had an
effective tax rate of approximately 16% on a reported basis and 17%
on an adjusted basis. This compared to an effective tax rate of
approximately 23% on both a reported and adjusted basis in the
prior year period. The decline was driven primarily by a discrete
tax benefit resulting from a reorganization of the Company's legal
entity structure.
Balance Sheet and Cash Flow Review
The Company ended the third quarter of Fiscal 2024 with $1.9
billion in cash and short-term investments and $1.1 billion in
total debt, compared to $1.7 billion and $1.1 billion,
respectively, at the end of the third quarter of Fiscal 2023.
Inventory at the end of the third quarter of Fiscal 2024 was
$1.1 billion, down 15% compared to the prior year period, with
planned declines in North America and Europe more than offsetting a
slight increase in Asia to support growth initiatives.
The Company repurchased approximately $103 million of Class A
Common Stock in the third quarter.
Full Year Fiscal 2024 and Fourth Quarter Outlook
The Company's outlook is based on its best assessment of the
current geopolitical and macroeconomic environment, including
inflationary pressures, other consumer spending-related headwinds
and foreign currency volatility, among others. The full year Fiscal
2024 and fourth 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, now centering around 2% compared to 1% to 2%
previously. Based on current exchange rates, foreign currency is
now expected to have a modest benefit on revenue growth of
approximately 10 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 now expected to have a roughly neutral impact on Fiscal
2024 operating margin. Gross margin is now expected to increase
approximately 140 to 180 basis points in constant currency
(compared to 120 to 170 basis points previously), with reduced
freight costs, favorable channel and geographic mix and continued
growth in AUR more than offsetting product cost inflation. Foreign
currency is now anticipated to negatively impact gross margins by
approximately 20 basis points in Fiscal 2024. Gross margin
expansion is still 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 fourth quarter, the Company expects revenue growth to be
in a range centered around 2% in constant currency to last year.
Foreign currency is expected to negatively impact revenue growth by
approximately 160 basis points.
Operating margin for the fourth quarter is expected to expand
approximately 350 to 400 basis points in constant currency, driven
largely by gross margin expansion, with about 40 basis points of
negative foreign currency impact. Foreign currency is expected to
negatively impact gross margin by approximately 50 basis points in
the fourth quarter.
Assuming a continuation of current tax laws, the Company's full
year Fiscal 2024 tax rate is now expected to be in the range of
approximately 19% to 20% following discrete tax benefits recognized
in the third quarter, while its fourth quarter tax rate is expected
to be in the range of 22% to 23%.
The Company now expects capital expenditures for Fiscal 2024 of
approximately $200 million to $225 million.
Conference Call
As previously announced, the Company will host a conference call
and live online webcast today, Thursday, February 8, 2024, 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 Third 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, Thursday, February 8,
2024 through 6:00 P.M. Eastern, Thursday, February 15, 2024 by
dialing 203-369-0609 or 866-405-7299 and entering passcode
7451.
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,
militant attacks on cargo vessels in the Red Sea, 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, as well as potential
shipping delays, inventory shortages, and/or higher freight costs
resulting from the emerging Red Sea crisis and/or disruptions to
major waterways such as the Suez and Panama canals; 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)
December 30,
2023
April 1, 2023
December 31,
2022
(millions)
ASSETS
Current assets:
Cash and cash equivalents
$
1,803.6
$
1,529.3
$
1,566.1
Short-term investments
113.8
36.4
131.4
Accounts receivable, net of allowances
403.9
447.7
424.0
Inventories
1,055.1
1,071.3
1,238.4
Income tax receivable
43.8
50.7
50.5
Prepaid expenses and other current
assets
219.2
188.7
220.9
Total current assets
3,639.4
3,324.1
3,631.3
Property and equipment, net
874.3
955.5
947.5
Operating lease right-of-use assets
1,076.7
1,134.0
1,073.0
Deferred tax assets
305.1
255.1
270.4
Goodwill
899.9
898.9
890.4
Intangible assets, net
79.0
88.9
92.3
Other non-current assets
130.1
133.0
135.0
Total assets
$
7,004.5
$
6,789.5
$
7,039.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
411.8
$
371.6
$
468.0
Current income tax payable
102.3
59.7
118.7
Current operating lease liabilities
259.0
266.7
264.4
Accrued expenses and other current
liabilities
905.1
795.5
898.5
Total current liabilities
1,678.2
1,493.5
1,749.6
Long-term debt
1,140.0
1,138.5
1,138.0
Long-term finance lease liabilities
263.5
315.3
320.9
Long-term operating lease liabilities
1,075.1
1,141.1
1,079.2
Non-current income tax payable
42.2
75.9
75.5
Non-current liability for unrecognized tax
benefits
112.6
93.8
97.4
Other non-current liabilities
121.0
100.9
111.5
Total liabilities
4,432.6
4,359.0
4,572.1
Equity:
Common stock
1.3
1.3
1.3
Additional paid-in-capital
2,899.6
2,824.3
2,808.7
Retained earnings
7,008.4
6,598.2
6,615.1
Treasury stock, Class A, at cost
(7,128.1
)
(6,797.3
)
(6,754.5
)
Accumulated other comprehensive loss
(209.3
)
(196.0
)
(202.8
)
Total equity
2,571.9
2,430.5
2,467.8
Total liabilities and equity
$
7,004.5
$
6,789.5
$
7,039.9
Net Cash & Short-term
Investments(a)
$
777.4
$
427.2
$
559.5
Cash & Short-term Investments
1,917.4
1,565.7
1,697.5
__________________________
(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
Nine Months Ended
December 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
(millions, except per share
data)
Net revenues
$
1,934.0
$
1,832.3
$
5,063.5
$
4,902.8
Cost of goods sold
(648.0
)
(641.6
)
(1,675.4
)
(1,687.6
)
Gross profit
1,286.0
1,190.7
3,388.1
3,215.2
Selling, general, and administrative
expenses
(967.6
)
(900.8
)
(2,693.9
)
(2,530.9
)
Restructuring and other charges, net
(0.7
)
(7.8
)
(45.6
)
(20.3
)
Total other operating expenses,
net
(968.3
)
(908.6
)
(2,739.5
)
(2,551.2
)
Operating income
317.7
282.1
648.6
664.0
Interest expense
(10.6
)
(12.0
)
(30.6
)
(33.3
)
Interest income
20.7
8.6
52.2
18.8
Other income (expense), net
2.0
1.7
(4.3
)
(6.8
)
Income before income taxes
329.8
280.4
665.9
642.7
Income tax provision
(53.2
)
(63.9
)
(110.3
)
(152.3
)
Net income
$
276.6
$
216.5
$
555.6
$
490.4
Net income per common share:
Basic
$
4.25
$
3.26
$
8.48
$
7.19
Diluted
$
4.19
$
3.20
$
8.31
$
7.07
Weighted-average common shares
outstanding:
Basic
65.0
66.5
65.5
68.2
Diluted
66.0
67.6
66.9
69.4
Dividends declared per share
$
0.75
$
0.75
$
2.25
$
2.25
RALPH LAUREN
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Prepared in accordance with
U.S. Generally Accepted Accounting Principles
(Unaudited)
Nine Months Ended
December 30,
2023
December 31,
2022
(millions)
Cash flows from operating
activities:
Net income
$
555.6
$
490.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
173.0
163.3
Deferred income tax expense (benefit)
(11.6
)
21.3
Stock-based compensation expense
75.3
59.9
Bad debt expense
1.8
0.2
Other non-cash charges (benefits)
6.2
(1.1
)
Changes in operating assets and
liabilities:
Accounts receivable
41.8
(30.5
)
Inventories
14.6
(282.7
)
Prepaid expenses and other current
assets
(28.6
)
(54.2
)
Accounts payable and accrued
liabilities
169.0
(24.3
)
Income tax receivables and payables
(0.8
)
69.9
Operating lease right-of-use assets and
liabilities, net
(25.6
)
(9.8
)
Other balance sheet changes
(22.0
)
(5.4
)
Net cash provided by operating
activities
948.7
397.0
Cash flows from investing
activities:
Capital expenditures
(124.9
)
(155.9
)
Purchases of investments
(272.1
)
(562.2
)
Proceeds from sales and maturities of
investments
193.8
1,161.5
Other investing activities
(1.0
)
(5.2
)
Net cash provided by (used in)
investing activities
(204.2
)
438.2
Cash flows from financing
activities:
Repayments of long-term debt
—
(500.0
)
Payments of finance lease obligations
(16.3
)
(15.9
)
Payments of dividends
(146.7
)
(148.8
)
Repurchases of common stock, including
shares surrendered for tax withholdings
(328.8
)
(445.8
)
Net cash used in financing
activities
(491.8
)
(1,110.5
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
22.5
(23.2
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
275.2
(298.5
)
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
$
1,812.1
$
1,573.5
RALPH LAUREN
CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended
Nine Months Ended
December 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
(millions)
Net revenues:
North America
$
933.3
$
937.6
$
2,282.8
$
2,364.9
Europe
521.5
469.3
1,498.8
1,378.4
Asia
446.4
386.2
1,172.3
1,036.7
Other non-reportable segments
32.8
39.2
109.6
122.8
Total net revenues
$
1,934.0
$
1,832.3
$
5,063.5
$
4,902.8
Operating income:
North America
$
204.6
$
214.9
$
440.1
$
474.8
Europe
123.4
109.6
353.0
317.4
Asia
108.2
89.8
269.9
234.2
Other non-reportable segments
29.4
36.9
97.3
114.1
465.6
451.2
1,160.3
1,140.5
Unallocated corporate expenses
(147.2
)
(161.3
)
(466.1
)
(456.2
)
Unallocated restructuring and other
charges, net
(0.7
)
(7.8
)
(45.6
)
(20.3
)
Total operating income
$
317.7
$
282.1
$
648.6
$
664.0
RALPH LAUREN
CORPORATION
CONSTANT CURRENCY FINANCIAL
MEASURES
(Unaudited)
Comparable Store Sales Data
December 30, 2023
Three Months Ended
Nine Months Ended
% Change
% Change
Constant Currency
Constant Currency
North America:
Digital commerce
4
%
1
%
Brick and mortar
6
%
2
%
Total North America
5
%
2
%
Europe:
Digital commerce
12
%
11
%
Brick and mortar
10
%
6
%
Total Europe
11
%
7
%
Asia:
Digital commerce
25
%
19
%
Brick and mortar
13
%
11
%
Total Asia
14
%
12
%
Total Ralph Lauren Corporation
9
%
6
%
Operating Segment Net Revenues
Data
Three Months Ended
% Change
December 30,
2023
December 31,
2022
As
Reported
Constant
Currency
(millions)
North America
$
933.3
$
937.6
(0.5
%)
(0.5
%)
Europe
521.5
469.3
11.1
%
6.4
%
Asia
446.4
386.2
15.6
%
17.5
%
Other non-reportable segments
32.8
39.2
(16.3
%)
(16.3
%)
Net revenues
$
1,934.0
$
1,832.3
5.6
%
4.7
%
Nine Months Ended
% Change
December 30,
2023
December 31,
2022
As
Reported
Constant
Currency
(millions)
North America
$
2,282.8
$
2,364.9
(3.5
%)
(3.4
%)
Europe
1,498.8
1,378.4
8.7
%
4.1
%
Asia
1,172.3
1,036.7
13.1
%
16.0
%
Other non-reportable segments
109.6
122.8
(10.8
%)
(10.8
%)
Net revenues
$
5,063.5
$
4,902.8
3.3
%
2.7
%
RALPH LAUREN
CORPORATION
NET REVENUES BY SALES
CHANNEL
(Unaudited)
Three Months Ended
December 30, 2023
December 31, 2022
North
America
Europe
Asia
Other
Total
North
America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
693.1
$
297.3
$
425.4
$
—
$
1,415.8
$
653.5
$
254.9
$
361.5
$
—
$
1,269.9
Wholesale
240.2
224.2
21.0
—
485.4
284.1
214.4
24.7
—
523.2
Licensing
—
—
—
32.8
32.8
—
—
—
39.2
39.2
Net revenues
$
933.3
$
521.5
$
446.4
$
32.8
$
1,934.0
$
937.6
$
469.3
$
386.2
$
39.2
$
1,832.3
Nine Months Ended
December 30, 2023
December 31, 2022
North
America
Europe
Asia
Other
Total
North
America
Europe
Asia
Other
Total
(millions)
Sales Channel:
Retail
$
1,541.9
$
762.4
$
1,095.6
$
—
$
3,399.9
$
1,515.3
$
675.6
$
963.6
$
—
$
3,154.5
Wholesale
740.9
736.4
76.7
—
1,554.0
849.6
702.8
73.1
—
1,625.5
Licensing
—
—
—
109.6
109.6
—
—
—
122.8
122.8
Net revenues
$
2,282.8
$
1,498.8
$
1,172.3
$
109.6
$
5,063.5
$
2,364.9
$
1,378.4
$
1,036.7
$
122.8
$
4,902.8
RALPH LAUREN
CORPORATION
GLOBAL RETAIL STORE
NETWORK
(Unaudited)
December 30,
2023
December 31,
2022
North
America
Ralph Lauren Stores
50
46
Polo Outlet Stores
187
190
Total Directly Operated Stores
237
236
Concessions
1
1
Europe
Ralph Lauren Stores
45
43
Polo Outlet Stores
60
61
Total Directly Operated Stores
105
104
Concessions
27
29
Asia
Ralph Lauren Stores
132
115
Polo Outlet Stores
96
94
Total Directly Operated Stores
228
209
Concessions
679
698
Global Directly
Operated Stores and Concessions
Ralph Lauren Stores
227
204
Polo Outlet Stores
343
345
Total Directly Operated Stores
570
549
Concessions
707
728
Global Licensed
Stores
Total Licensed Stores
194
104
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
December 30, 2023
As
Reported
Total
Adjustments(a)(b)
As
Adjusted
(Reported $)
Foreign
Currency
Impact
As
Adjusted
(Constant $)
(millions, except per share
data)
Net revenues
$
1,934.0
$
—
$
1,934.0
$
(15.1
)
$
1,918.9
Gross profit
1,286.0
(0.9
)
1,285.1
(8.6
)
1,276.5
Gross profit margin
66.5
%
66.4
%
66.5
%
Total other operating expenses, net
(968.3
)
0.7
(967.6
)
3.5
(964.1
)
Operating expense margin
50.1
%
50.0
%
50.2
%
Operating income
317.7
(0.2
)
317.5
(5.1
)
312.4
Operating margin
16.4
%
16.4
%
16.3
%
Income before income taxes
329.8
(0.2
)
329.6
Income tax provision
(53.2
)
(1.3
)
(54.5
)
Effective tax rate
16.1
%
16.5
%
Net income
$
276.6
$
(1.5
)
$
275.1
Net income per diluted common share
$
4.19
$
4.17
SEGMENT
INFORMATION
REVENUE:
North America
$
933.3
$
—
$
933.3
$
(0.2
)
$
933.1
Europe
521.5
—
521.5
(22.2
)
499.3
Asia
446.4
—
446.4
7.3
453.7
Other non-reportable segments
32.8
—
32.8
—
32.8
Total revenue
$
1,934.0
$
—
$
1,934.0
$
(15.1
)
$
1,918.9
OPERATING INCOME:
North America
$
204.6
$
(0.9
)
$
203.7
Operating margin
21.9
%
21.8
%
Europe
123.4
—
123.4
Operating margin
23.7
%
23.7
%
Asia
108.2
—
108.2
Operating margin
24.2
%
24.2
%
Other non-reportable segments
29.4
—
29.4
Operating margin
89.9
%
89.9
%
Unallocated corporate expenses and
restructuring & other charges, net
(147.9
)
0.7
(147.2
)
Total operating income
$
317.7
$
(0.2
)
$
317.5
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Nine Months Ended
December 30, 2023
As
Reported
Total
Adjustments(a)(c)
As
Adjusted
(Reported $)
Foreign
Currency
Impact
As
Adjusted
(Constant $)
(millions, except per share
data)
Net revenues
$
5,063.5
$
—
$
5,063.5
$
(30.4
)
$
5,033.1
Gross profit
3,388.1
(4.5
)
3,383.6
(12.2
)
3,371.4
Gross profit margin
66.9
%
66.8
%
67.0
%
Total other operating expenses, net
(2,739.5
)
45.2
(2,694.3
)
0.3
(2,694.0
)
Operating expense margin
54.1
%
53.2
%
53.5
%
Operating income
648.6
40.7
689.3
(11.9
)
677.4
Operating margin
12.8
%
13.6
%
13.5
%
Income before income taxes
665.9
40.7
706.6
Income tax provision
(110.3
)
(22.3
)
(132.6
)
Effective tax rate
16.6
%
18.8
%
Net income
$
555.6
$
18.4
$
574.0
Net income per diluted common share
$
8.31
$
8.58
SEGMENT
INFORMATION
REVENUE:
North America
$
2,282.8
$
—
$
2,282.8
$
2.3
$
2,285.1
Europe
1,498.8
—
1,498.8
(63.5
)
1,435.3
Asia
1,172.3
—
1,172.3
30.8
1,203.1
Other non-reportable segments
109.6
—
109.6
—
109.6
Total revenue
$
5,063.5
$
—
$
5,063.5
$
(30.4
)
$
5,033.1
OPERATING INCOME:
North America
$
440.1
$
(4.7
)
$
435.4
Operating margin
19.3
%
19.1
%
Europe
353.0
(0.2
)
352.8
Operating margin
23.6
%
23.5
%
Asia
269.9
—
269.9
Operating margin
23.0
%
23.0
%
Other non-reportable segments
97.3
—
97.3
Operating margin
88.9
%
88.9
%
Unallocated corporate expenses and
restructuring & other charges, net
(511.7
)
45.6
(466.1
)
Total operating income
$
648.6
$
40.7
$
689.3
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Three Months Ended
December 31, 2022
As
Reported
Total
Adjustments(a)(d)
As
Adjusted
(millions, except per share
data)
Net revenues
$
1,832.3
$
—
$
1,832.3
Gross profit
1,190.7
4.0
1,194.7
Gross profit margin
65.0
%
65.2
%
Total other operating expenses, net
(908.6
)
7.8
(900.8
)
Operating expense margin
49.6
%
49.2
%
Operating income
282.1
11.8
293.9
Operating margin
15.4
%
16.0
%
Income before income taxes
280.4
11.8
292.2
Income tax provision
(63.9
)
(2.2
)
(66.1
)
Effective tax rate
22.8
%
22.6
%
Net income
$
216.5
$
9.6
$
226.1
Net income per diluted common share
$
3.20
$
3.35
SEGMENT
INFORMATION
OPERATING INCOME:
North America
$
214.9
$
3.7
$
218.6
Operating margin
22.9
%
23.3
%
Europe
109.6
0.2
109.8
Operating margin
23.3
%
23.4
%
Asia
89.8
—
89.8
Operating margin
23.3
%
23.3
%
Other non-reportable segments
36.9
0.1
37.0
Operating margin
94.3
%
94.3
%
Unallocated corporate expenses and
restructuring & other charges, net
(169.1
)
7.8
(161.3
)
Total operating income
$
282.1
$
11.8
$
293.9
RALPH LAUREN
CORPORATION
RECONCILIATION OF NON-U.S.
GAAP FINANCIAL MEASURES (Continued)
(Unaudited)
Nine Months Ended
December 31, 2022
As
Reported
Total
Adjustments(a)(e)
As
Adjusted
(millions, except per share
data)
Net revenues
$
4,902.8
$
—
$
4,902.8
Gross profit
3,215.2
13.2
3,228.4
Gross profit margin
65.6
%
65.8
%
Total other operating expenses, net
(2,551.2
)
18.1
(2,533.1
)
Operating expense margin
52.0
%
51.7
%
Operating income
664.0
31.3
695.3
Operating margin
13.5
%
14.2
%
Income before income taxes
642.7
31.3
674.0
Income tax provision
(152.3
)
(7.0
)
(159.3
)
Effective tax rate
23.7
%
23.6
%
Net income
$
490.4
$
24.3
$
514.7
Net income per diluted common share
$
7.07
$
7.42
SEGMENT
INFORMATION
OPERATING INCOME:
North America
$
474.8
$
10.2
$
485.0
Operating margin
20.1
%
20.5
%
Europe
317.4
0.5
317.9
Operating margin
23.0
%
23.1
%
Asia
234.2
—
234.2
Operating margin
22.6
%
22.6
%
Other non-reportable segments
114.1
0.1
114.2
Operating margin
93.0
%
93.0
%
Unallocated corporate expenses and
restructuring & other charges, net
(476.5
)
20.5
(456.0
)
Total operating income
$
664.0
$
31.3
$
695.3
RALPH LAUREN CORPORATION FOOTNOTES TO
RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES
- 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.
- Adjustments for the three months ended December 30, 2023
include (i) income of $5.0 million related to consideration
received from Regent, L.P. ("Regent") in connection with the
Company's previously sold Club Monaco business; (ii) other charges
of $4.7 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)
charges of $1.0 million recorded in connection with the Company's
restructuring activities, primarily associated with severance and
benefit costs; and (iv) non-routine inventory benefits of $0.9
million primarily related to reversals of amounts previously
recognized in connection with delays in U.S. customs shipment
reviews and approvals.
- Adjustments for the nine months ended December 30, 2023 include
(i) charges of $38.3 million recorded in connection with the
Company's restructuring activities, primarily associated with
severance and benefit costs; (ii) other charges of $14.3 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 $7.0
million related to consideration received from Regent in connection
with the Company's previously sold Club Monaco business; (iv)
non-routine inventory benefits of $4.5 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; 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.
- Adjustments for the three months ended December 31, 2022
include (i) other charges of $7.0 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 $4.0 million attributable to inventory
adjustments due to delays in U.S. customs shipment reviews and
approvals; and (iii) charges of $0.8 million recorded in connection
with the Company's restructuring activities.
- Adjustments for the nine months ended December 31, 2022 include
(i) other charges of $17.6 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 $13.2 million
largely recorded in connection with the Russia-Ukraine war and
delays in U.S. customs shipment reviews and approvals, partially
offset by reversals of amounts previously recognized in connection
with the COVID-19 pandemic; (iii) charges of $6.4 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 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 fourth
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/20240207737592/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
