Ralph Lauren Corporation (NYSE:RL) today reported net income of $237
million, or $2.57 per diluted share, for the third quarter of Fiscal
2014, compared to net income of $216 million, or $2.31 per diluted
share, for the third quarter of Fiscal 2013.
The Company's Board of Directors authorized an additional $500 million
stock repurchase program permitting the Company to purchase shares of
Class A Common Stock, subject to market conditions. This amount is in
addition to the $230 million available at the end of the third quarter
of Fiscal 2014 as part of a previously authorized stock repurchase
program, bringing the Company's total current authorizations to $730
million.
“We’ve accomplished a lot in the first nine months of the year,” said
Ralph Lauren, Chairman and Chief Executive Officer. “The accelerated
revenue and profit growth we achieved this quarter across all markets is
a tribute to the enduring strength and global appeal of the World of
Ralph Lauren. Momentum was strong across our diverse brand portfolio
that includes the pinnacle of luxury with Ralph Lauren Collection and
Purple Label, as well as Polo, Denim & Supply, Chaps and Club Monaco. We
are excited to build on that momentum by continuing to expand in new
categories, like our growing accessories business, and launching women’s
Polo, which will be heralded into the market when we open our Fifth
Avenue Polo flagship in New York later this year. I am confident we have
the right strategies to accomplish our goals and I couldn’t be more
optimistic about the prospects ahead.”
“We set aggressive goals for the third quarter and we are proud to have
achieved them in the context of such a challenging operating
environment,” said Jacki Nemerov, President & Chief Operating Officer.
“Strong international and e-commerce growth is a clear demonstration
that our sustained investment in the business is paying off. The allure
of our products, the distinctiveness of our in-store customer experience
and the effectiveness of our marketing and advertising efforts are a
winning combination, especially when matched with the disciplined
operational management of our global teams. We intend to maximize these
competitive advantages as we continue to make prudent investments in
emerging merchandise categories and regions, in new stores, e-commerce
platforms, and in our infrastructure.”
Third Quarter Fiscal 2014 Income Statement Review
Net Revenues. Net revenues for the third quarter of Fiscal
2014 rose 9% to $2.0 billion. Excluding the net negative impact from
foreign currency translation and discontinued businesses, net revenues
increased approximately 11%. Revenue growth was broad-based, with the
Americas, Europe and Asia all reporting high single digit increases or
better in constant currency.
-
Wholesale Sales. Wholesale segment sales grew 14% to $840
million in the third quarter of Fiscal 2014. Wholesale revenue growth
was primarily a result of strong momentum in core North American
merchandise categories, the contribution from the newly transitioned
Chaps menswear operations and improved trends in Europe.
-
Retail Sales. Retail sales rose 6% to $1.1 billion in the third
quarter, reflecting the incremental contribution from new stores,
including newly transitioned operations in Australia/New Zealand, and
comparable store sales growth that was partially offset by the net
negative impact of foreign currency translation. Excluding the impacts
of discontinued businesses and foreign currency effects, retail sales
rose 10% from the prior year period. Consolidated comparable store
sales increased 1% on a reported basis and 2% in constant currency
during the third quarter.
-
Licensing. Licensing revenues of $45 million in the third
quarter were 12% below the prior year period as higher licensing
revenues for Ralph Lauren products were more than offset by lower
Chaps and Australia/New Zealand licensing revenues due to recent
license take-backs.
Gross Profit. Gross profit for the third quarter of Fiscal
2014 increased 7% to $1.2 billion. Gross profit margin of 58.2% was 110
basis points lower than the comparable prior year period, primarily due
to the mix impact from the integration of the Chaps menswear operations
and unfavorable foreign currency dynamics that more than offset improved
profitability in core operations.
Operating Expenses. Operating expenses of $838 million in
the third quarter were 6% greater than the prior year period, reflecting
overall business expansion and continued investment in the Company’s
strategic growth initiatives. Operating expense rate of 41.6% was 120
basis points lower than the third quarter of Fiscal 2013 as disciplined
operational management provided strong expense leverage on accelerated
revenue growth.
Operating Income. Operating income rose 10% to $334
million in the third quarter of Fiscal 2014. Operating margin of 16.6%
was 10 basis points greater than the third quarter of Fiscal 2013 as the
decline in gross profit margin was more than offset by operating expense
leverage.
-
Wholesale Operating Income. Wholesale operating income
increased 16% to $168 million in the third quarter of Fiscal 2014.
Wholesale operating margin improved 20 basis points to 19.9% as
improved profitability in certain core operations was partially offset
by the mix impact from the integration of Chaps men’s sportswear and
net negative foreign currency effects.
-
Retail Operating Income. Retail operating income of $223
million in the third quarter of Fiscal 2014 was 11% higher than the
prior year period and retail operating margin improved 90 basis points
to 19.8%. The improvement in retail segment profitability was achieved
despite increased expenses associated with the Company’s global store
and e-commerce development efforts.
-
Licensing Operating Income. Licensing operating income of $34
million was 8% below the prior year period due to lower licensing
revenues.
Net Income and Diluted EPS. Net income for the third
quarter of Fiscal 2014 was $237 million, 10% higher than the $216
million achieved in the comparable period of Fiscal 2013, and net income
per diluted share increased 11% to $2.57 from $2.31 for the same time
period. The growth in net income and net income per diluted share was
principally the result of higher operating income, as the effective tax
rate of 27% was in line with the prior year period.
Third Quarter Fiscal 2014 Balance Sheet and Cash Flow 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"), both of which were in line with the comparable prior year
period. The third quarter ended with inventory of $1.1 billion compared
to $981 million in the comparable prior year period. The growth in
inventory primarily reflects the integration of formerly licensed
operations as directly operated businesses; inventory for new stores and
e-commerce operations; and investment to support anticipated sales
growth.
The Company had $81 million in capital expenditures in the third quarter
of Fiscal 2014, compared to $78 million in the prior year period. The
Company repurchased approximately 1.1 million shares of Class A Common
Stock during the third quarter.
Global Retail Store Network
The Company ended the third quarter of Fiscal 2014 with 435 directly
operated stores, comprised of 136 Ralph Lauren stores, 63 Club Monaco
stores and 236 Polo factory stores. The Company also operated 518
concession shop locations worldwide at the end of the third quarter. In
addition to Company-operated locations, international licensing partners
operated 57 Ralph Lauren stores and 13 dedicated shops, as well as 105
Club Monaco stores and shops at the end of the third quarter.
Fiscal 2014 Outlook
In the fourth quarter of Fiscal 2014, the Company expects consolidated
net revenues to increase by 10%-12%, including an approximate 100 basis
point net negative impact from foreign currency translation and
discontinued businesses. Operating margin for the fourth quarter of
Fiscal 2014 is expected to improve 50-90 basis points from the 11.1%
achieved in the comparable prior year period as a lower gross margin is
more than offset by anticipated operating expense leverage despite
continued investments to support the Company’s strategic growth
objectives. The fourth quarter tax rate is estimated at 30%.
The Company is raising its full year, Fiscal 2014 revenue outlook to 7%
growth, which is the high end of the previous 5%-7% range and includes
an approximate 150-200 basis point net negative impact from foreign
currency translation and discontinued businesses. Based on the
anticipated fourth quarter margin dynamics, operating margin for Fiscal
2014 is expected to be 110-120 basis points below the prior year’s
record 16.2%, which compares to the prior outlook of an approximate 75
basis point contraction. As a reminder, the anticipated decline in
Fiscal 2014 operating margin is primarily due to the integration of
certain formerly licensed merchandise categories and geographic regions
to directly controlled operations, accelerated investment in the
Company’s long-term growth initiatives and unfavorable foreign currency
effects. The full year Fiscal 2014 tax rate is currently estimated at
29% compared to a prior expectation of 30%. The net impact of the
Company’s updated Fiscal 2014 expectations remains in the range of its
prior outlook.
Conference Call
As previously announced, the Company will host a conference call and
live online webcast today, Wednesday, February 5, at 9:00 a.m. Eastern.
Listeners may access a live broadcast of the conference call on the
Company's investor relations website at http://investor.ralphlauren.com
or by dialing 517-623-4799. 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 2014 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, February 5, 2014 through 6:00 P.M. Eastern,
Wednesday, February 12, 2014 by dialing 402-220-3886 and entering
passcode 3709.
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 46 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 or may 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; 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; 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 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; our
ability to continue to maintain our brand image and reputation and
protect our trademarks; the impact of the uncertain state of the global
economy on consumer purchases of premium lifestyle products that we sell
and our ability to forecast consumer demand; 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 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; our ability
to continue to expand our business internationally; changes in our
effective tax rates or credit profile and ratings within the financial
community; changes in our relationships with department store customers
and licensing partners; 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.
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 28,
|
|
|
|
March 30,
|
|
|
|
December 29,
|
|
|
|
|
|
|
2013
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
882
|
|
|
|
|
$
|
974
|
|
|
|
|
$
|
999
|
|
Short-term investments
|
|
|
|
|
|
|
533
|
|
|
|
|
|
325
|
|
|
|
|
|
313
|
|
Accounts receivable, net of allowances
|
|
|
|
|
|
|
425
|
|
|
|
|
|
458
|
|
|
|
|
|
384
|
|
Inventories
|
|
|
|
|
|
|
1,117
|
|
|
|
|
|
896
|
|
|
|
|
|
981
|
|
Income tax receivable
|
|
|
|
|
|
|
32
|
|
|
|
|
|
29
|
|
|
|
|
|
19
|
|
Deferred tax assets
|
|
|
|
|
|
|
125
|
|
|
|
|
|
120
|
|
|
|
|
|
126
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
|
228
|
|
|
|
|
|
161
|
|
|
|
|
|
180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
|
|
3,342
|
|
|
|
|
|
2,963
|
|
|
|
|
|
3,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current investments
|
|
|
|
|
|
|
5
|
|
|
|
|
|
81
|
|
|
|
|
|
89
|
|
Property and equipment, net
|
|
|
|
|
|
|
1,299
|
|
|
|
|
|
932
|
|
|
|
|
|
926
|
|
Deferred tax assets
|
|
|
|
|
|
|
21
|
|
|
|
|
|
22
|
|
|
|
|
|
16
|
|
Goodwill
|
|
|
|
|
|
|
958
|
|
|
|
|
|
968
|
|
|
|
|
|
993
|
|
Intangible assets, net
|
|
|
|
|
|
|
305
|
|
|
|
|
|
328
|
|
|
|
|
|
340
|
|
Other non-current assets
|
|
|
|
|
|
|
130
|
|
|
|
|
|
124
|
|
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
$
|
6,060
|
|
|
|
|
$
|
5,418
|
|
|
|
|
$
|
5,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
267
|
|
|
|
|
$
|
274
|
|
Accounts payable
|
|
|
|
|
|
|
207
|
|
|
|
|
|
147
|
|
|
|
|
|
146
|
|
Income tax payable
|
|
|
|
|
|
|
49
|
|
|
|
|
|
43
|
|
|
|
|
|
89
|
|
Accrued expenses and other current liabilities
|
|
|
|
|
|
|
728
|
|
|
|
|
|
664
|
|
|
|
|
|
682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
|
|
984
|
|
|
|
|
|
1,121
|
|
|
|
|
|
1,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
|
300
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Non-current liability for unrecognized tax benefits
|
|
|
|
|
|
|
122
|
|
|
|
|
|
150
|
|
|
|
|
|
156
|
|
Other non-current liabilities
|
|
|
|
|
|
|
620
|
|
|
|
|
|
362
|
|
|
|
|
|
372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
|
|
2,026
|
|
|
|
|
|
1,633
|
|
|
|
|
|
1,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
Additional paid-in-capital
|
|
|
|
|
|
|
1,952
|
|
|
|
|
|
1,752
|
|
|
|
|
|
1,760
|
|
Retained earnings
|
|
|
|
|
|
|
5,144
|
|
|
|
|
|
4,647
|
|
|
|
|
|
4,556
|
|
Treasury stock, Class A, at cost
|
|
|
|
|
|
|
(3,167
|
)
|
|
|
|
|
(2,709
|
)
|
|
|
|
|
(2,708
|
)
|
Accumulated other comprehensive income
|
|
|
|
|
|
|
104
|
|
|
|
|
|
94
|
|
|
|
|
|
161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
|
|
|
4,034
|
|
|
|
|
|
3,785
|
|
|
|
|
|
3,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
|
|
|
$
|
6,060
|
|
|
|
|
$
|
5,418
|
|
|
|
|
$
|
5,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED STATEMENTS OF INCOME
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
December 28,
|
|
|
|
December 29,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale net sales
|
|
|
|
|
$
|
840
|
|
|
|
|
$
|
733
|
|
Retail net sales
|
|
|
|
|
|
1,130
|
|
|
|
|
|
1,062
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
1,970
|
|
|
|
|
|
1,795
|
|
|
|
|
|
|
|
|
|
|
|
Licensing revenue
|
|
|
|
|
|
45
|
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
|
|
2,015
|
|
|
|
|
|
1,846
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold(a)
|
|
|
|
|
|
(843
|
)
|
|
|
|
|
(752
|
)
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
1,172
|
|
|
|
|
|
1,094
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses(a)
|
|
|
|
|
|
(815
|
)
|
|
|
|
|
(768
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
(7
|
)
|
Impairment of assets
|
|
|
|
|
|
-
|
|
|
|
|
|
(11
|
)
|
Restructuring and other charges
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
(3
|
)
|
Total other operating expenses, net
|
|
|
|
|
|
(838
|
)
|
|
|
|
|
(789
|
)
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
334
|
|
|
|
|
|
305
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency losses
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net
|
|
|
|
|
|
-
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
Equity in losses of equity-method investees
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
|
|
324
|
|
|
|
|
|
295
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
|
(87
|
)
|
|
|
|
|
(79
|
)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
237
|
|
|
|
|
$
|
216
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - Basic
|
|
|
|
|
$
|
2.62
|
|
|
|
|
$
|
2.37
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - Diluted
|
|
|
|
|
$
|
2.57
|
|
|
|
|
$
|
2.31
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Basic
|
|
|
|
|
|
90.1
|
|
|
|
|
|
91.1
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
91.8
|
|
|
|
|
|
93.3
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
|
|
$
|
0.45
|
|
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes total depreciation expense of:
|
|
|
|
|
$
|
(58
|
)
|
|
|
|
$
|
(54
|
)
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED STATEMENTS OF INCOME
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
December 28,
|
|
|
|
December 29,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale net sales
|
|
|
|
|
$
|
2,503
|
|
|
|
|
$
|
2,342
|
|
Retail net sales
|
|
|
|
|
|
2,953
|
|
|
|
|
|
2,820
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
5,456
|
|
|
|
|
|
5,162
|
|
|
|
|
|
|
|
|
|
|
|
Licensing revenue
|
|
|
|
|
|
127
|
|
|
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
|
|
|
5,583
|
|
|
|
|
|
5,301
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold(a)
|
|
|
|
|
|
(2,323
|
)
|
|
|
|
|
(2,120
|
)
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
3,260
|
|
|
|
|
|
3,181
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses(a)
|
|
|
|
|
|
(2,327
|
)
|
|
|
|
|
(2,201
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
(28
|
)
|
|
|
|
|
(20
|
)
|
Gain on acquisition of Chaps
|
|
|
|
|
|
16
|
|
|
|
|
|
-
|
|
Impairment of assets
|
|
|
|
|
|
-
|
|
|
|
|
|
(12
|
)
|
Restructuring and other charges
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
(3
|
)
|
Total other operating expenses, net
|
|
|
|
|
|
(2,355
|
)
|
|
|
|
|
(2,236
|
)
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
905
|
|
|
|
|
|
945
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency losses
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net
|
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
Equity in losses of equity-method investees
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
|
|
877
|
|
|
|
|
|
921
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
|
(254
|
)
|
|
|
|
|
(298
|
)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
623
|
|
|
|
|
$
|
623
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - Basic
|
|
|
|
|
$
|
6.89
|
|
|
|
|
$
|
6.80
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - Diluted
|
|
|
|
|
$
|
6.74
|
|
|
|
|
$
|
6.63
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Basic
|
|
|
|
|
|
90.4
|
|
|
|
|
|
91.6
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
92.4
|
|
|
|
|
|
93.9
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
|
|
|
$
|
1.25
|
|
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes total depreciation expense of:
|
|
|
|
|
$
|
(165
|
)
|
|
|
|
$
|
(154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
OTHER INFORMATION
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues and operating income for the periods ended December 28,
2013 and December 29, 2012 for each segment were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
December 28,
|
|
|
December 29,
|
|
|
December 28,
|
|
|
December 29,
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
|
|
|
$
|
840
|
|
|
|
$
|
733
|
|
|
|
$
|
2,503
|
|
|
|
$
|
2,342
|
|
Retail
|
|
|
|
|
|
1,130
|
|
|
|
|
1,062
|
|
|
|
|
2,953
|
|
|
|
|
2,820
|
|
Licensing
|
|
|
|
|
|
45
|
|
|
|
|
51
|
|
|
|
|
127
|
|
|
|
|
139
|
|
Total net revenues
|
|
|
|
|
$
|
2,015
|
|
|
|
$
|
1,846
|
|
|
|
$
|
5,583
|
|
|
|
$
|
5,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
|
|
|
$
|
168
|
|
|
|
$
|
146
|
|
|
|
$
|
524
|
|
|
|
$
|
532
|
|
Retail
|
|
|
|
|
|
223
|
|
|
|
|
201
|
|
|
|
|
518
|
|
|
|
|
537
|
|
Licensing
|
|
|
|
|
|
34
|
|
|
|
|
37
|
|
|
|
|
98
|
|
|
|
|
101
|
|
|
|
|
|
|
|
425
|
|
|
|
|
384
|
|
|
|
|
1,140
|
|
|
|
|
1,170
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses
|
|
|
|
|
|
(77
|
)
|
|
|
|
(76
|
)
|
|
|
|
(235
|
)
|
|
|
|
(222
|
)
|
Gain on acquisition of Chaps
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
16
|
|
|
|
|
-
|
|
Unallocated restructuring and other charges, net
|
|
|
|
|
(14
|
)
|
|
|
|
(3
|
)
|
|
|
|
(16
|
)
|
|
|
|
(3
|
)
|
Total operating income
|
|
|
|
|
$
|
334
|
|
|
|
$
|
305
|
|
|
|
$
|
905
|
|
|
|
$
|
945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
Constant Currency Financial Measures
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same - Store Sales Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 28, 2013
% Change
|
Nine Months Ended
December 28, 2013
% Change
|
|
|
|
|
|
|
As Reported
|
|
|
Constant Currency
|
|
|
|
As Reported
|
|
|
Constant Currency
|
Total Ralph Lauren
|
|
|
|
|
|
|
1%
|
|
|
|
2%
|
|
|
|
0%
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
% Change
|
|
|
|
|
|
|
December 28, 2013
|
|
|
December 29, 2012
|
|
|
|
As Reported
|
|
|
Constant Currency
|
Wholesale net sales
|
|
|
|
|
|
$
|
840
|
|
|
$
|
733
|
|
|
|
14.5%
|
|
|
14.4%
|
Retail net sales
|
|
|
|
|
|
|
1,130
|
|
|
|
1,062
|
|
|
|
6.4%
|
|
|
7.8%
|
Net sales
|
|
|
|
|
|
|
1,970
|
|
|
|
1,795
|
|
|
|
9.7%
|
|
|
10.5%
|
Licensing revenue
|
|
|
|
|
|
|
45
|
|
|
|
51
|
|
|
|
(11.9%)
|
|
|
(11.9%)
|
Net revenues
|
|
|
|
|
|
$
|
2,015
|
|
|
$
|
1,846
|
|
|
|
9.1%
|
|
|
9.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
% Change
|
|
|
|
|
|
|
December 28, 2013
|
|
|
December 29, 2012
|
|
|
|
As Reported
|
|
|
Constant Currency
|
Wholesale net sales
|
|
|
|
|
|
$
|
2,503
|
|
|
$
|
2,342
|
|
|
|
6.8%
|
|
|
6.8%
|
Retail net sales
|
|
|
|
|
|
|
2,953
|
|
|
|
2,820
|
|
|
|
4.7%
|
|
|
6.3%
|
Net sales
|
|
|
|
|
|
|
5,456
|
|
|
|
5,162
|
|
|
|
5.7%
|
|
|
6.6%
|
Licensing revenue
|
|
|
|
|
|
|
127
|
|
|
|
139
|
|
|
|
(8.7%)
|
|
|
(8.7%)
|
Net revenues
|
|
|
|
|
|
$
|
5,583
|
|
|
$
|
5,301
|
|
|
|
5.3%
|
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Presented below is a reconciliation of the Company’s non-GAAP measure of
reported to adjusted revenues:
|
RALPH LAUREN CORPORATION
|
Reconciliation of Certain Non-GAAP Financial Measures
|
(in millions, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
December 28, 2013
|
|
|
|
|
|
|
Net revenue growth, as reported
|
|
|
|
|
9%
|
Impacts of foreign currency and discontinued businesses
|
|
|
|
|
2%
|
Adjusted net revenue growth
|
|
|
|
|
11%
|
|
|
|
|
|
|
Net retail revenue growth, as reported
|
|
|
|
|
6%
|
Impacts of foreign currency and discontinued businesses
|
|
|
|
|
4%
|
Adjusted net retail revenue growth
|
|
|
|
|
10%
|
Copyright Business Wire 2014