Ralph Lauren Reports Better-Than-Expected Third Quarter Fiscal 2013 Results and Raises Its Full Year Fiscal 2013 Profit Outlook
Ralph Lauren Corporation (NYSE:RL) today reported net income of $216
million, or $2.31 per diluted share, for the third quarter of Fiscal
2013, compared to net income of $169 million, or $1.78 per diluted
share, for the third quarter of Fiscal 2012. In the third quarter of
Fiscal 2013, the Company recorded approximately $13 million in pre-tax
impairment and restructuring charges associated with the discontinuation
of its Rugby operations. Excluding the Rugby-related charges, net income
rose 33% to $224 million and net income per diluted share increased 35%
to $2.40 in the third quarter of Fiscal 2013.
“Our third quarter performance is a testament to the enduring appeal of
our brand and the dedication of our passionate team,” said Ralph Lauren,
Chairman and Chief Executive Officer. “Our orientation as a design-led,
marketing and merchandising organization has enabled us to deepen our
connection with our customers, particularly as we expand our portfolio
of products and lifestyle sensibilities. I am inspired by how our
Company continues to evolve in compelling new ways, and the progress we
are making with our global e-commerce and store development efforts is
especially exciting. We have a successful track record of investing for
growth and we remain committed to nurturing the incredible vitality of
our long-term initiatives.”
“The robust profit growth we achieved in the third quarter demonstrates
the strength of our operating model,” said Roger Farah, President and
Chief Operating Officer. “The relevance of our brand, product and
merchandising strategies resulted in a strong holiday season for us, one
that was characterized by continued momentum in the Americas and
improved trends in Europe. The consistent investment in our long-term
growth initiatives has created a steadily improving, highly resilient
profit margin structure for our organization.”
Third Quarter Fiscal 2013 Income Statement Review
Net Revenues. Net revenues for the third quarter of Fiscal
2013 rose 2% to $1.8 billion. The increase in net revenues primarily
reflects strong retail segment expansion that was partially offset by a
planned contraction in wholesale shipments. Excluding the impact of
strategic decisions to discontinue American Living and store closures
associated with the Company’s Greater China network repositioning
efforts, in addition to the net negative impact from foreign currency
translation, net revenues increased approximately 5% in the third
quarter.
-
Wholesale Sales. Wholesale segment sales of $734 million in the
third quarter were 2% below the prior year period, as the
discontinuation of American Living in Fiscal 2013, a proactive
reduction in shipments to certain European customers and the net
negative impact of foreign currency translation more than offset
continued growth in core and emerging merchandise categories in the
Americas.
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Retail Sales. Retail sales rose 6% to $1.1 billion from $1.0
billion in the third quarter last year, reflecting growth in
comparable store sales and the incremental contribution from new
stores and e-commerce operations that were partially offset by lower
sales at Asian concession shops and store closures associated with the
Company’s Greater China network repositioning efforts. Consolidated
comparable store sales rose 4% on both a reported and constant
currency basis during the third quarter. The Company estimates that
disruption caused by Super Storm Sandy negatively impacted third
quarter comparable store sales growth by 1%-2%.
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Licensing. Licensing revenues of $50 million in the third
quarter were 1% greater than the prior year period. The increase in
licensing revenues is principally due to higher domestic product
licensing revenues that were partially offset by the transition of
certain formerly licensed international regions to directly controlled
operations.
Gross Profit. Gross profit for the third quarter of Fiscal
2013 increased 6% to $1.1 billion and gross profit margin improved 220
basis points to 59.3%. The higher gross profit margin was primarily
driven by lower input costs, favorable product mix and operational
discipline.
Operating Expenses. Operating expenses rose 4% in the
third quarter to $790 million from $761 million in the third quarter of
Fiscal 2012 and were 42.8% of sales, 60 basis points greater than the
prior year period. The growth in operating expenses and the higher
operating expense margin primarily reflect costs associated with overall
business expansion, continued investment in the Company’s long-term
strategic growth initiatives and increased restructuring and impairment
charges, principally as a result of the discontinuation of Rugby. The
increase in operating expenses was partially offset by a shift in the
timing of certain expenses out of the third quarter and into the fourth
quarter of Fiscal 2013.
Operating Income. Operating income for the third quarter
of Fiscal 2013 was $304 million, 13% greater than the prior year.
Operating margin was 16.5% of sales, 150 basis points stronger than the
third quarter of Fiscal 2012. The improvement in operating margin
primarily reflects the higher gross profit margin discussed above.
-
Wholesale Operating Income. Wholesale operating income
increased 29% in the third quarter of Fiscal 2013 to $145 million from
$113 million last year. Wholesale operating margin was 19.7% in the
third quarter, 470 basis points stronger than the prior year. The
improvement in wholesale operating margin was primarily due to higher
gross margins as a result of lower input costs, favorable product mix
and operational discipline.
-
Retail Operating Income. Retail operating income was $201
million, 4% greater than the $193 million achieved in the third
quarter of Fiscal 2012, and retail operating margin was 18.9%, 30
basis points below the prior year period. The decline in retail
operating margin was principally a result of impairment and
restructuring charges associated with the discontinuation of Rugby.
Excluding the Rugby-related charges, retail operating margin was
19.8%, 60 basis points greater than the prior year period, as a result
of improved profitability in the Americas and Europe that was
partially offset by a less favorable geographic mix due to lower Asian
sales and continued investment in global retail expansion, including
e-commerce.
-
Licensing Operating Income. Licensing operating income
increased 3% to $37 million from $36 million in the third quarter of
Fiscal 2012, primarily due to higher licensing revenues and lower net
costs.
Net Income and Diluted EPS. Net income for the third
quarter of Fiscal 2013 was $216 million, 28% greater than the $169
million achieved in the comparable period of Fiscal 2012, and net income
per diluted share rose 30% to $2.31 from $1.78 for the same time period.
The increases in net income and net income per diluted share were the
result of the growth in operating income discussed above in addition to
a lower effective tax rate of 27% compared to 36% in the prior year
period. The lower effective tax rate is primarily related to the
favorable resolution of an approximate $15 million discrete tax item and
to a greater proportion of earnings generated in lower-taxed
jurisdictions. Excluding Rugby-related impairment and restructuring
charges, net income for the third quarter of Fiscal 2013 rose 33% to
$224 million and net income per diluted share increased 35% to $2.40.
Third Quarter Fiscal 2013 Balance Sheet Review
The Company ended the third quarter with $1.4 billion in cash and
investments, or $1.1 billion in cash and investments net of debt ("net
cash"), compared to $1.3 billion in cash and investments and $1.0
billion in net cash at the end of the third quarter of Fiscal 2012.
The Company repurchased approximately 971,000 shares of Class A Common
Stock during the third quarter of Fiscal 2013, utilizing $150 million of
its authorized share repurchase programs. In the first nine months of
Fiscal 2013, the Company repurchased $450 million of its Class A Common
Stock and approximately $627 million remained available under authorized
share repurchase programs at the end of the third quarter. The Company
had $78 million in capital expenditures in the third quarter, compared
to $68 million in the prior year period. The third quarter ended with
inventory up 10% to $981 million from $895 million in the third quarter
of last year.
Global Retail Store Network
The Company ended the third quarter of Fiscal 2013 with 399 directly
operated stores, comprised of 114 Ralph Lauren stores, 58 Club Monaco
stores, 213 Polo factory stores and 14 Rugby stores. The Company also
operated 508 concession shop locations worldwide at the end of the third
quarter. In addition to Company-operated locations, international
licensing partners operated 63 Ralph Lauren stores and 32 dedicated
shops, as well as 64 Club Monaco stores and shops at the end of the
third quarter.
Fiscal 2013 Outlook
Based on its year-to-date results, the Company expects consolidated net
revenues for Fiscal 2013 to increase by approximately 2%. Included in
the Fiscal 2013 net revenue expectation is an approximate 400-500 basis
point net negative impact associated with strategic decisions regarding
certain operations, including store closures associated with the
Company’s Greater China network repositioning efforts and the
discontinuation of American Living, in addition to unfavorable foreign
currency effects. As a result of the better-than-expected profitability
achieved in the first nine months of the year, the Company now expects
operating margin from continuing operations for Fiscal 2013 to be
approximately 75-100 basis points above the prior year period, which
compares to its prior expectation of an approximately 50 basis point
improvement. The full year Fiscal 2013 sales and operating margin
expectations outlined in this press release do not include approximately
$20-$25 million in anticipated pretax charges related to the previously
announced closure of the Rugby brand. The Company currently estimates
the full year Fiscal 2013 tax rate at approximately 32%.
In the fourth quarter of Fiscal 2013, the Company expects consolidated
net revenues to increase by a mid-single-digit percentage, reflecting an
8%-11% increase in retail revenues and wholesale revenues that are flat
to the prior year period. Included in the fourth quarter net revenue
expectation is an approximate 300 basis point net negative impact from
strategic decisions regarding certain operations, including store
closures associated with the Company’s Greater China network
repositioning efforts and the discontinuation of American Living, in
addition to unfavorable foreign currency effects. Operating margin from
continuing operations for the fourth quarter of Fiscal 2013 is expected
to be approximately 125-150 basis points above the comparable prior year
period. The fourth quarter sales and operating margin expectations
outlined in this press release do not include anticipated pretax charges
related to the previously announced closure of the Rugby brand. The
Company currently estimates the fourth quarter tax rate at approximately
29%.
Conference Call
As previously announced, the Company will host a conference call and
live online webcast today, Wednesday, February 6, 2013, at 9:00 a.m.
Eastern. Listeners may access a live broadcast of the conference call on
the Company's investor relations website at http://investor.ralphlauren.com
or by dialing 719-457-2652. 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 Fiscal Year 2013 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 1:00 P.M. Eastern,
Wednesday, February 6, 2013 through 1:00 P.M. Eastern, Tuesday, February
12, 2013 by dialing 719-457-0820 and entering passcode 5147093.
ABOUT RALPH LAUREN
Ralph Lauren Corporation (NYSE: RL) is a leader in the design, marketing
and distribution of premium lifestyle products in four categories:
apparel, home, accessories and fragrances. For more than 45 years, Ralph
Lauren's reputation and distinctive image have been consistently
developed across an expanding number of products, brands and
international markets. The Company's brand names, which include Polo by
Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black
Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Ralph Lauren
Childrenswear, Denim & Supply Ralph Lauren, Chaps and Club Monaco,
constitute one of the world's most widely recognized families of
consumer brands. For more information, go to http://investor.ralphlauren.com.
This press release and oral statements made from time to time by
representatives of the Company contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include statements
regarding, among other things, our current expectations about the
Company's future results and financial condition, revenues, store
openings, margins, expenses and earnings and are indicated by words or
phrases such as "anticipate," "estimate," "expect," "project," "we
believe" and similar words or phrases. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which
may cause actual results, performance or achievements to be materially
different from the future results, performance or achievements expressed
in or implied by such forward-looking statements. Forward-looking
statements are based largely on the Company's expectations and judgments
and are subject to a number of risks and uncertainties, many of which
are unforeseeable and beyond our control. The factors that could cause
actual results to materially differ include, among others: the loss of
key personnel; the impact of global economic conditions and domestic and
foreign currency fluctuations on the Company, the global economy and the
consumer marketplace and our ability to access sources of liquidity; our
ability to successfully implement our anticipated growth strategies, to
continue to expand or grow our business and capitalize on our
repositioning initiatives in certain merchandise categories; changes in
our effective tax rates or credit profile and ratings within the
financial community; our ability to secure the technology facilities and
systems used by the Company and those of third party service providers
from, among other things, cybersecurity breaches, acts of vandalism,
computer viruses or similar events; changes in the competitive
marketplace and in our commercial relationships; risks associated with
changes in social, political, economic and other conditions affecting
foreign operations or sourcing (including tariffs and trade controls,
raw materials prices and labor costs); risks associated with our
international operations, such as violations of laws prohibiting
improper payments and the burdens of complying with a variety of foreign
laws and regulations, including tax laws; risks arising out of
litigation or trademark conflicts; our ability to continue to maintain
our brand image and reputation; the potential impact on our operations
and customers resulting from natural or man-made disasters; 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.
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RALPH LAUREN CORPORATION
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CONSOLIDATED BALANCE SHEETS
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Prepared in accordance with Generally Accepted Accounting
Principles
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(in millions)
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(Unaudited)
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|
December 29,
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March 31,
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December 31,
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2012
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2012
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2011
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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999.1
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$
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671.6
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$
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815.8
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Short-term investments
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313.2
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515.7
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386.3
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Accounts receivable, net of allowances
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|
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383.9
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547.2
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440.2
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Inventories
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|
981.1
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841.6
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|
|
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|
894.7
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Income tax receivable
|
|
|
|
|
18.9
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|
17.2
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|
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|
9.8
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Deferred tax assets
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|
|
|
|
125.9
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|
125.6
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|
101.9
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Prepaid expenses and other
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179.9
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181.0
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177.8
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Total current assets
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3,002.0
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|
2,899.9
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|
2,826.5
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|
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Non-current investments
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89.0
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|
99.9
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|
72.5
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Property and equipment, net
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926.4
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|
884.1
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|
|
|
|
|
826.5
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Deferred tax assets
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|
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|
|
16.2
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|
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|
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|
39.8
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72.2
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Goodwill
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993.1
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1,004.0
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|
1,013.4
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Intangible assets, net
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339.8
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359.0
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370.2
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Other assets
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122.7
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129.7
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145.2
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|
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|
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Total assets
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|
$
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5,489.2
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|
$
|
5,416.4
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|
$
|
5,326.5
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LIABILITIES AND EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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274.1
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$
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-
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$
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-
|
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Accounts payable
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|
|
|
|
146.2
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|
|
|
|
|
180.6
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|
|
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|
|
169.7
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Income tax payable
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|
|
|
|
89.3
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|
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71.9
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|
|
142.8
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Accrued expenses and other
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|
|
|
|
682.0
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|
693.7
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|
666.7
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|
|
|
|
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Total current liabilities
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|
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|
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1,191.6
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|
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|
946.2
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979.2
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|
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Long-term debt
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|
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|
-
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|
|
|
|
|
274.4
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265.6
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Non-current liability for unrecognized tax benefits
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|
|
|
|
155.6
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|
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|
168.0
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162.8
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Other non-current liabilities
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372.3
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|
375.3
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389.2
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Total liabilities
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|
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1,719.5
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1,763.9
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1,796.8
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Equity:
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Common stock
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1.2
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1.2
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1.2
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Additional paid-in-capital
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1,760.2
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|
1,624.0
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1,567.0
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Retained earnings
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|
4,555.9
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|
4,042.4
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3,966.5
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Treasury stock, Class A, at cost
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(2,708.4
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)
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(2,211.7
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)
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(2,211.7
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)
|
Accumulated other comprehensive income
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|
160.8
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|
196.6
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|
206.7
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|
|
|
|
|
|
|
|
|
|
|
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|
Total equity
|
|
|
|
|
3,769.7
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|
|
|
|
|
3,652.5
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|
|
|
|
|
3,529.7
|
|
|
|
|
|
|
|
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|
|
|
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|
|
Total liabilities and equity
|
|
|
|
$
|
5,489.2
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|
|
|
|
$
|
5,416.4
|
|
|
|
|
$
|
5,326.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
RALPH LAUREN CORPORATION
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Prepared in accordance with Generally Accepted Accounting
Principles
|
(in millions, except per share data)
|
(Unaudited)
|
|
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|
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|
|
|
|
|
|
|
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|
Three Months Ended
|
|
|
|
|
|
|
|
December 29,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
Wholesale Net Sales
|
|
|
|
|
|
|
$
|
733.9
|
|
|
|
|
$
|
750.0
|
|
Retail Net Sales
|
|
|
|
|
|
|
|
1,062.0
|
|
|
|
|
|
1,006.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
1,795.9
|
|
|
|
|
|
1,756.0
|
|
|
|
|
|
|
|
|
|
|
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|
Licensing Revenue
|
|
|
|
|
|
|
|
50.2
|
|
|
|
|
|
49.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues
|
|
|
|
|
|
|
|
1,846.1
|
|
|
|
|
|
1,805.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold (a)
|
|
|
|
|
|
|
|
(752.0
|
)
|
|
|
|
|
(774.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
|
|
|
1,094.1
|
|
|
|
|
|
1,031.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General & Administrative Expenses (a)
|
|
|
|
|
|
|
|
(768.9
|
)
|
|
|
|
|
(750.7
|
)
|
Amortization of Intangible Assets
|
|
|
|
|
|
|
|
(6.8
|
)
|
|
|
|
|
(7.2
|
)
|
Impairment of Assets
|
|
|
|
|
|
|
|
(11.4
|
)
|
|
|
|
|
(2.0
|
)
|
Restructuring Charges
|
|
|
|
|
|
|
|
(2.6
|
)
|
|
|
|
|
(1.6
|
)
|
Total Operating Expenses
|
|
|
|
|
|
|
|
(789.7
|
)
|
|
|
|
|
(761.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
304.4
|
|
|
|
|
|
270.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Gains (Losses)
|
|
|
|
|
|
|
|
(3.9
|
)
|
|
|
|
|
(2.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
|
|
|
|
(5.6
|
)
|
|
|
|
|
(6.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Other Income, Net
|
|
|
|
|
|
|
|
1.5
|
|
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income (Loss) of Equity-Method Investees
|
|
|
|
|
|
|
|
(1.8
|
)
|
|
|
|
|
(2.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Provision for Income Taxes
|
|
|
|
|
|
|
|
294.6
|
|
|
|
|
|
262.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
|
|
|
|
|
(78.9
|
)
|
|
|
|
|
(93.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to RLC
|
|
|
|
|
|
|
$
|
215.7
|
|
|
|
|
$
|
169.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share - Basic
|
|
|
|
|
|
|
$
|
2.37
|
|
|
|
|
$
|
1.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share - Diluted
|
|
|
|
|
|
|
$
|
2.31
|
|
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding - Basic
|
|
|
|
|
|
|
|
91.1
|
|
|
|
|
|
92.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding - Diluted
|
|
|
|
|
|
|
|
93.3
|
|
|
|
|
|
94.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes total depreciation expense of:
|
|
|
|
|
|
|
$
|
(53.8
|
)
|
|
|
|
$
|
(49.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Prepared in accordance with Generally Accepted Accounting
Principles
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
December 29,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Net Sales
|
|
|
|
|
|
|
$
|
2,342.5
|
|
|
|
|
$
|
2,418.5
|
|
Retail Net Sales
|
|
|
|
|
|
|
|
2,820.2
|
|
|
|
|
|
2,680.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
5,162.7
|
|
|
|
|
|
5,099.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licensing Revenue
|
|
|
|
|
|
|
|
138.8
|
|
|
|
|
|
137.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues
|
|
|
|
|
|
|
|
5,301.5
|
|
|
|
|
|
5,236.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold (a)
|
|
|
|
|
|
|
|
(2,120.0
|
)
|
|
|
|
|
(2,164.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
|
|
|
3,181.5
|
|
|
|
|
|
3,071.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General & Administrative Expenses (a)
|
|
|
|
|
|
|
|
(2,200.7
|
)
|
|
|
|
|
(2,142.4
|
)
|
Amortization of Intangible Assets
|
|
|
|
|
|
|
|
(20.3
|
)
|
|
|
|
|
(21.8
|
)
|
Impairment of Assets
|
|
|
|
|
|
|
|
(12.4
|
)
|
|
|
|
|
(2.2
|
)
|
Restructuring Charges
|
|
|
|
|
|
|
|
(3.4
|
)
|
|
|
|
|
(2.3
|
)
|
Total Operating Expenses
|
|
|
|
|
|
|
|
(2,236.8
|
)
|
|
|
|
|
(2,168.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
944.7
|
|
|
|
|
|
903.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Gains (Losses)
|
|
|
|
|
|
|
|
(7.0
|
)
|
|
|
|
|
(4.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
|
|
|
|
(16.5
|
)
|
|
|
|
|
(18.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Other Income, Net
|
|
|
|
|
|
|
|
4.1
|
|
|
|
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income (Loss) of Equity-Method Investees
|
|
|
|
|
|
|
|
(4.6
|
)
|
|
|
|
|
(5.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Provision for Income Taxes
|
|
|
|
|
|
|
|
920.7
|
|
|
|
|
|
884.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
|
|
|
|
|
(297.9
|
)
|
|
|
|
|
(297.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to RLC
|
|
|
|
|
|
|
$
|
622.8
|
|
|
|
|
$
|
586.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share - Basic
|
|
|
|
|
|
|
$
|
6.80
|
|
|
|
|
$
|
6.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share - Diluted
|
|
|
|
|
|
|
$
|
6.63
|
|
|
|
|
$
|
6.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding - Basic
|
|
|
|
|
|
|
|
91.6
|
|
|
|
|
|
92.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding - Diluted
|
|
|
|
|
|
|
|
93.9
|
|
|
|
|
|
95.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
|
|
|
|
$
|
1.20
|
|
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes total depreciation expense of:
|
|
|
|
|
|
|
$
|
(153.7
|
)
|
|
|
|
$
|
(146.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
OTHER INFORMATION
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION
|
Net revenues and operating income for the periods ended December 29,
2012 and December 31, 2011 for each segment were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
December 29,
|
|
December 31,
|
|
December 29,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Net Revenues:
|
|
|
|
|
|
|
|
|
Wholesale
|
|
$
|
733.9
|
|
|
$
|
750.0
|
|
|
$
|
2,342.5
|
|
|
$
|
2,418.5
|
|
Retail
|
|
|
1,062.0
|
|
|
|
1,006.0
|
|
|
|
2,820.2
|
|
|
|
2,680.8
|
|
Licensing
|
|
|
50.2
|
|
|
|
49.6
|
|
|
|
138.8
|
|
|
|
137.3
|
|
Total Net Revenues
|
|
$
|
1,846.1
|
|
|
$
|
1,805.6
|
|
|
$
|
5,301.5
|
|
|
$
|
5,236.6
|
|
|
|
|
|
|
|
|
|
|
Operating Income:
|
|
|
|
|
|
|
|
|
Wholesale
|
|
$
|
144.9
|
|
|
$
|
112.6
|
|
|
$
|
531.3
|
|
|
$
|
503.9
|
|
Retail
|
|
|
201.2
|
|
|
|
193.3
|
|
|
|
537.2
|
|
|
|
510.3
|
|
Licensing
|
|
|
37.0
|
|
|
|
35.9
|
|
|
|
101.3
|
|
|
|
99.2
|
|
|
|
|
383.1
|
|
|
|
341.8
|
|
|
|
1,169.8
|
|
|
|
1,113.4
|
|
Less:
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses
|
|
|
(76.1
|
)
|
|
|
(70.1
|
)
|
|
|
(221.7
|
)
|
|
|
(208.1
|
)
|
Unallocated restructuring charges, net
|
|
|
(2.6
|
)
|
|
|
(1.6
|
)
|
|
|
(3.4
|
)
|
|
|
(2.3
|
)
|
Total Operating Income
|
|
$
|
304.4
|
|
|
$
|
270.1
|
|
|
$
|
944.7
|
|
|
$
|
903.0
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL FINANCIAL INFORMATION
This earnings release includes certain non-GAAP financial measures
relating to impairment and restructuring charges associated with the
discontinuation of Rugby. The following is a reconciliation between the
non-GAAP financial measures and the most directly comparable GAAP
measures before and after these charges. The related tax effects were
calculated using the respective statutory tax rates for each applicable
jurisdiction. The Company uses non-GAAP financial measures, among other
things, to evaluate its operating performance and in order to represent
the manner in which the Company 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 the
non-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 GAAP
and may be different from non-GAAP measures reported by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
|
Reconciliation of Certain Non-GAAP Financial Measures
|
|
(in millions, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 29, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment &
|
|
|
|
|
|
|
|
|
|
|
Asset Impairment
|
|
|
|
Restructuring
|
|
|
|
Restructuring
|
|
|
|
|
|
|
As Reported
|
|
|
|
Charges
|
|
|
|
Charges
|
|
|
|
Charges
|
|
Total Operating Expenses
|
|
|
|
|
$
|
789.7
|
|
|
|
$
|
(11.3
|
)
|
|
|
$
|
(1.6
|
)
|
|
|
$
|
776.8
|
|
Operating Expense Margin
|
|
|
|
|
|
42.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
42.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
$
|
304.4
|
|
|
|
$
|
11.3
|
|
|
|
$
|
1.6
|
|
|
|
$
|
317.3
|
|
Operating Margin
|
|
|
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
17.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision/(Benefit) for Income Taxes
|
|
|
|
|
$
|
78.9
|
|
|
|
$
|
(4.0
|
)
|
|
|
$
|
(0.6
|
)
|
|
|
$
|
74.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
$
|
215.7
|
|
|
|
$
|
7.3
|
|
|
|
$
|
1.0
|
|
|
|
$
|
224.0
|
|
Net Income per Diluted Share
|
|
|
|
|
$
|
2.31
|
|
|
|
$
|
0.08
|
|
|
|
$
|
0.01
|
|
|
|
$
|
2.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME/(LOSS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
|
|
|
$
|
144.9
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
144.9
|
|
Retail
|
|
|
|
|
|
201.2
|
|
|
|
|
9.6
|
|
|
|
|
-
|
|
|
|
|
210.8
|
|
Licensing
|
|
|
|
|
|
37.0
|
|
|
|
|
1.7
|
|
|
|
|
-
|
|
|
|
|
38.7
|
|
Unallocated Corporate Expenses and Restructuring Charges
|
|
|
|
|
|
(78.7
|
)
|
|
|
|
-
|
|
|
|
|
1.6
|
|
|
|
|
(77.1
|
)
|
Total Operating Income
|
|
|
|
|
$
|
304.4
|
|
|
|
$
|
11.3
|
|
|
|
$
|
1.6
|
|
|
|
$
|
317.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Operating Margin
|
|
|
|
|
|
18.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
19.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
|
Constant Currency Financial Measures
|
|
(in millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same - Store Sales Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
December 29, 2012
|
|
|
|
|
December 29, 2012
|
|
|
|
|
|
% Change
|
|
|
|
|
% Change
|
|
|
|
|
|
As Reported
|
|
|
|
Constant Currency
|
|
|
|
As Reported
|
|
|
|
Constant Currency
|
Total Ralph Lauren
|
|
|
|
|
4
|
%
|
|
|
|
|
4
|
%
|
|
|
|
3
|
%
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
% Change
|
|
|
|
|
|
December 29, 2012
|
|
|
|
December 31, 2011
|
|
|
|
As Reported
|
|
|
|
Constant Currency
|
Wholesale Net Sales
|
|
|
|
$
|
733.9
|
|
|
|
|
$
|
750.0
|
|
|
|
|
(2.1
|
%)
|
|
|
|
(1.2
|
%)
|
Retail Net Sales
|
|
|
|
|
1,062.0
|
|
|
|
|
|
1,006.0
|
|
|
|
|
5.6
|
%
|
|
|
|
5.9
|
%
|
Net Sales
|
|
|
|
|
1,795.9
|
|
|
|
|
|
1,756.0
|
|
|
|
|
2.3
|
%
|
|
|
|
2.9
|
%
|
Licensing Revenue
|
|
|
|
|
50.2
|
|
|
|
|
|
49.6
|
|
|
|
|
1.2
|
%
|
|
|
|
1.6
|
%
|
Net Revenue
|
|
|
|
$
|
1,846.1
|
|
|
|
|
$
|
1,805.6
|
|
|
|
|
2.2
|
%
|
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
% Change
|
|
|
|
|
|
December 29, 2012
|
|
|
|
December 31, 2011
|
|
|
|
As Reported
|
|
|
|
Constant Currency
|
|
Wholesale Net Sales
|
|
|
|
$
|
2,342.5
|
|
|
|
|
$
|
2,418.5
|
|
|
|
|
(3.1
|
%)
|
|
|
|
(1.1
|
%)
|
Retail Net Sales
|
|
|
|
|
2,820.2
|
|
|
|
|
|
2,680.8
|
|
|
|
|
5.2
|
%
|
|
|
|
6.6
|
%
|
Net Sales
|
|
|
|
|
5,162.7
|
|
|
|
|
|
5,099.3
|
|
|
|
|
1.2
|
%
|
|
|
|
3.0
|
%
|
Licensing Revenue
|
|
|
|
|
138.8
|
|
|
|
|
|
137.3
|
|
|
|
|
1.1
|
%
|
|
|
|
1.3
|
%
|
Net Revenue
|
|
|
|
$
|
5,301.5
|
|
|
|
|
$
|
5,236.6
|
|
|
|
|
1.2
|
%
|
|
|
|
2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ralph Lauren is a global company that reports its financial information
in U.S. dollars, in accordance with U.S. GAAP (“GAAP”). Foreign currency
exchange rate fluctuations affect the amounts reported by the Company in
U.S. dollars because the underlying currencies in which the Company
transacts change in value over time compared to the U.S. dollar. These
rate fluctuations can have a significant effect on reported operating
results. As a supplement to its reported operating results, the Company
presents constant currency financial information, which is a non-GAAP
financial measure. The Company uses constant currency information to
provide a framework to assess how its businesses performed excluding the
effects of foreign currency exchange rate fluctuations. The Company
believes this information is useful to investors to facilitate
comparisons of operating results and better identify trends in its
businesses. These 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 GAAP.