Ralph Lauren Corporation (NYSE:RL) today reported net income of $215
million, or $2.41 per diluted share, for the third quarter of Fiscal
2015, compared to net income of $237 million, or $2.57 per diluted
share, for the third quarter of Fiscal 2014.
The Company also announced that its Board of Directors declared an 11%
increase in the regular quarterly cash dividend on the Company's Common
Stock. The new quarterly cash dividend is $0.50 per share. Over the next
year, the new annual dividend amount will be $2.00 per share. The next
quarterly dividend is payable on April 10, 2015 to shareholders of
record at the close of business on March 27, 2015.
“Our year-to-date results reflect continued focus on our long-term
strategic growth initiatives,” said Ralph Lauren, Chairman and Chief
Executive Officer. “We opened several new stores around the world; we
invested in advertising and marketing to support substantial product
innovation, including the launch of Polo for women; and we made
important upgrades to our infrastructure. Our long-range goals remain
unchanged, and we have a clear roadmap to achieve them. As we work to
realize these goals and maximize our investments in an increasingly
complex global environment, we are making the right organizational
changes to ensure a strong and healthy future for the Company. The
Board’s decision to raise our quarterly dividend demonstrates its
conviction in the Company’s growth objectives and an ongoing commitment
to returning cash to our shareholders.”
“The resilience of the third quarter’s operating profitability is a
testament to the strong, consistent operational discipline of our global
teams,” said Jacki Nemerov, President and Chief Operating Officer.
“Although our sales were below the expectations we had set, we navigated
through the volatile global marketplace by controlling the controllable
and delivered an operating margin at the high end of our outlook.
Foreign exchange and global consumer spending remain unpredictable, and
we are planning our business accordingly. While we are cautious with our
outlook, we are bold with our actions to offset some of these ongoing
external pressures. Over the next several months, we will implement a
new, carefully considered, global brand management structure that we are
confident will enable us to operate in a more customer-centric way and
provide substantial operating efficiencies."
Third Quarter Fiscal 2015 Income Statement Review
Net Revenues. Net revenues for the third quarter of Fiscal
2015 rose 1% to $2.0 billion. Excluding the net negative impact from
foreign currency effects, net revenues increased approximately 3%,
reflecting growth in all geographic regions.
-
Wholesale Sales. Wholesale segment sales of $837 million in the
third quarter of Fiscal 2015 were in line with the prior year period.
Growth in European wholesale shipments was offset by lower shipments
in the Americas and unfavorable foreign currency translation.
Excluding negative foreign currency effects, wholesale segment sales
increased 2%.
-
Retail Sales. Retail sales increased 2% to $1.1 billion in the
third quarter, led by double-digit growth in global e-commerce and the
contribution from new store openings. Excluding the negative impact
from foreign currency translation, retail sales rose 5% over the prior
year period. Consolidated comparable store sales declined 2% on a
reported basis during the third quarter and were in line with the
prior year in constant currency.
-
Licensing. Licensing revenues of $47 million in the third
quarter were 6% above the prior year period, reflecting higher
royalties from increased sales of Ralph Lauren, Polo and Lauren
products worldwide.
Gross Profit. Gross profit for the third quarter of Fiscal
2015 declined 1% to $1.2 billion. Gross profit margin of 57.0% was 120
basis points lower than the comparable prior year period, due to mix
impacts, a more promotional U.S. marketplace and unfavorable foreign
currency effects.
Operating Expenses. Operating expenses of $844 million in
the third quarter were 1% above the prior year period. Operating expense
rate of 41.5% was 10 basis points lower than the third quarter of Fiscal
2014 as incremental investments in global retail development, marketing
and infrastructure were more than offset by disciplined operational
management and lower restructuring and other charges.
Operating Income. Operating income declined 6% to $315
million in the third quarter of Fiscal 2015. Operating margin of 15.5%
was 110 basis points below the prior year due to the lower gross profit
margin.
-
Wholesale Operating Income. Wholesale operating income of $207
million was 5% below the prior year period. Wholesale operating margin
declined 120 basis points to 24.7% due to product mix impacts.
-
Retail Operating Income. Retail operating income of $194
million in the third quarter of Fiscal 2015 was 12% lower than the
prior year period. Retail operating margin declined 260 basis points
to 16.9% due to a more promotional U.S. marketplace and increased
expenses associated with the Company’s global store and e-commerce
development efforts.
-
Licensing Operating Income. Licensing operating income of $42
million increased 7% from the prior year period, consistent with the
increase in licensing revenues.
Net Income and Diluted EPS. Net income for the third
quarter of Fiscal 2015 was $215 million, 9% lower than the $237 million
achieved in the comparable period of Fiscal 2014, and net income per
diluted share declined 6% to $2.41 from $2.57 for the same time period.
The decline in net income and net income per diluted share was
principally the result of lower operating income and a higher effective
tax rate of 29% compared to 27% in the third quarter of Fiscal 2014.
Third Quarter Fiscal 2015 Balance Sheet and Cash Flow Review
The Company ended the third quarter with $1.4 billion in cash and
investments, or $1.0 billion in cash and investments net of debt ("net
cash"), compared to $1.4 billion in cash and investments and $1.1
billion in net cash at the end of the third quarter of Fiscal 2014. The
third quarter ended with inventory of $1.2 billion compared to $1.1
billion in the comparable prior year period.
The Company had $124 million in capital expenditures in the third
quarter of Fiscal 2015 compared to $81 million in the prior year period.
The Company repurchased approximately 0.5 million shares of Class A
Common Stock during the third quarter, utilizing $100 million of its
share repurchase authorization and bringing year-to-date repurchases to
$350 million. Approximately $230 million remains available for future
share repurchases.
Global Retail Store Network
The Company ended the third quarter of Fiscal 2015 with 470 directly
operated stores, comprised of 148 Ralph Lauren stores, 65 Club Monaco
stores and 257 Polo factory stores. The Company also operated 504
concession shop locations worldwide at the end of the third quarter. In
addition to Company-operated locations, international licensing partners
operated 71 Ralph Lauren stores and 23 dedicated shops, as well as 114
Club Monaco stores and shops at the end of the third quarter.
Fiscal 2015 Outlook
In the fourth quarter of Fiscal 2015, the Company expects consolidated
net revenues to increase at a mid-single digit rate in constant
currency. Based on current rates, the net negative impact from foreign
currency translation is estimated at approximately 550 basis points.
Operating margin for the fourth quarter of Fiscal 2015 is expected to be
250-300 basis points below the comparable prior year period, reflecting
relatively equal pressure from the gross margin and operating expenses.
The fourth quarter tax rate is estimated at 31%-32%.
Based on the third quarter results and incrementally unfavorable foreign
currency movements, the Company is adjusting its outlook for Fiscal
2015. The Company now expects consolidated net revenues for Fiscal 2015
to increase by approximately 4% in constant currency. Based on current
rates, the net negative impact from foreign currency translation is
estimated at approximately 200 basis points. The revised revenue outlook
compares to the Company’s previous expectation of 5%-7% growth. The
Fiscal 2015 operating margin is now estimated to be approximately
170-190 basis points below Fiscal 2014’s level, which compares to a
prior expectation of a 100-125 basis point decline. The full year Fiscal
2015 tax rate continues to be estimated at 30%. Based on current rates,
foreign exchange is expected to have a negative impact on the Company’s
sales and profits in Fiscal 2016.
Conference Call
As previously announced, the Company will host a conference call and
live online webcast today, Wednesday, February 4, 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 2015 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 4, 2015 through 6:00 P.M. Eastern,
Wednesday, February 11, 2015 by dialing 203-369-3606 and entering
passcode 1035.
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 47 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
Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black
Label, Lauren by Ralph Lauren, RRL, RLX, Ralph Lauren Childrenswear,
Denim & Supply Ralph Lauren, American Living, 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.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
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 the statements
under “Fiscal 2015 Outlook” and 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 and to
capitalize on our repositioning initiatives in certain merchandise
categories; 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 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; the impact of the volatile state
of the global economy or consumer preferences on 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 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; the impact to our business of events of unrest and
instability that are currently taking place in certain parts of the
world; our ability to continue to expand our business internationally;
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); 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 on our 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 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.
|
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
December 27,
|
|
March 29,
|
|
December 28,
|
|
|
|
2014
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
763
|
|
|
$
|
797
|
|
|
$
|
882
|
|
Short-term investments
|
|
|
644
|
|
|
|
488
|
|
|
|
533
|
|
Accounts receivable, net of allowances
|
|
|
416
|
|
|
|
588
|
|
|
|
425
|
|
Inventories
|
|
|
1,211
|
|
|
|
1,020
|
|
|
|
1,117
|
|
Income tax receivable
|
|
|
60
|
|
|
|
62
|
|
|
|
32
|
|
Deferred tax assets
|
|
|
149
|
|
|
|
150
|
|
|
|
125
|
|
Prepaid expenses and other current assets
|
|
|
276
|
|
|
|
224
|
|
|
|
228
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
3,519
|
|
|
|
3,329
|
|
|
|
3,342
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,454
|
|
|
|
1,322
|
|
|
|
1,299
|
|
Deferred tax assets
|
|
|
49
|
|
|
|
39
|
|
|
|
21
|
|
Goodwill
|
|
|
917
|
|
|
|
964
|
|
|
|
958
|
|
Intangible assets, net
|
|
|
273
|
|
|
|
299
|
|
|
|
305
|
|
Other non-current assets
|
|
|
132
|
|
|
|
137
|
|
|
|
135
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
6,344
|
|
|
$
|
6,090
|
|
|
$
|
6,060
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
113
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Accounts payable
|
|
|
229
|
|
|
|
203
|
|
|
|
207
|
|
Income tax payable
|
|
|
132
|
|
|
|
77
|
|
|
|
49
|
|
Accrued expenses and other current liabilities
|
|
|
784
|
|
|
|
690
|
|
|
|
728
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
1,258
|
|
|
|
970
|
|
|
|
984
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
300
|
|
|
|
300
|
|
|
|
300
|
|
Non-current liability for unrecognized tax benefits
|
|
|
112
|
|
|
|
132
|
|
|
|
122
|
|
Other non-current liabilities
|
|
|
599
|
|
|
|
654
|
|
|
|
620
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
2,269
|
|
|
|
2,056
|
|
|
|
2,026
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Common stock
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in-capital
|
|
|
2,089
|
|
|
|
1,979
|
|
|
|
1,952
|
|
Retained earnings
|
|
|
5,706
|
|
|
|
5,257
|
|
|
|
5,144
|
|
Treasury stock, Class A, at cost
|
|
|
(3,699
|
)
|
|
|
(3,317
|
)
|
|
|
(3,167
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
(22
|
)
|
|
|
114
|
|
|
|
104
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
4,075
|
|
|
|
4,034
|
|
|
|
4,034
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
6,344
|
|
|
$
|
6,090
|
|
|
$
|
6,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
CONSOLIDATED STATEMENTS OF INCOME
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 27,
|
|
December 28,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale net sales
|
|
$
|
837
|
|
|
$
|
840
|
|
Retail net sales
|
|
|
1,149
|
|
|
|
1,130
|
|
|
|
|
|
|
Net sales
|
|
|
1,986
|
|
|
|
1,970
|
|
|
|
|
|
|
Licensing revenue
|
|
|
47
|
|
|
|
45
|
|
|
|
|
|
|
Net revenues
|
|
|
2,033
|
|
|
|
2,015
|
|
|
|
|
|
|
Cost of goods sold(a)
|
|
|
(874
|
)
|
|
|
(843
|
)
|
|
|
|
|
|
Gross profit
|
|
|
1,159
|
|
|
|
1,172
|
|
|
|
|
|
|
Selling, general, and administrative expenses(a)
|
|
|
(837
|
)
|
|
|
(815
|
)
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
(6
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
Restructuring and other charges
|
|
|
(1
|
)
|
|
|
(14
|
)
|
|
|
|
|
|
Total other operating expenses, net
|
|
|
(844
|
)
|
|
|
(838
|
)
|
|
|
|
|
|
Operating income
|
|
|
315
|
|
|
|
334
|
|
|
|
|
|
|
Foreign currency losses
|
|
|
(8
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
Interest expense
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
Interest and other income, net
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
Equity in losses of equity-method investees
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
301
|
|
|
|
324
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(86
|
)
|
|
|
(87
|
)
|
|
|
|
|
|
Net income
|
|
$
|
215
|
|
|
$
|
237
|
|
|
|
|
|
|
Net income per share - Basic
|
|
$
|
2.44
|
|
|
$
|
2.62
|
|
|
|
|
|
|
Net income per share - Diluted
|
|
$
|
2.41
|
|
|
$
|
2.57
|
|
|
|
|
|
|
Weighted average shares outstanding - Basic
|
|
|
88.1
|
|
|
|
90.1
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
89.0
|
|
|
|
91.8
|
|
|
|
|
|
|
Dividends declared per share
|
|
$
|
0.45
|
|
|
$
|
0.45
|
|
|
|
|
|
|
(a) Includes total depreciation expense of:
|
|
$
|
(72
|
)
|
|
$
|
(58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
Prepared in accordance with U.S. Generally Accepted Accounting
Principles
|
(in millions, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 27,
|
|
December 28,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale net sales
|
|
$
|
2,488
|
|
|
$
|
2,503
|
|
Retail net sales
|
|
|
3,115
|
|
|
|
2,953
|
|
|
|
|
|
|
Net sales
|
|
|
5,603
|
|
|
|
5,456
|
|
|
|
|
|
|
Licensing revenue
|
|
|
132
|
|
|
|
127
|
|
|
|
|
|
|
Net revenues
|
|
|
5,735
|
|
|
|
5,583
|
|
|
|
|
|
|
Cost of goods sold(a)
|
|
|
(2,401
|
)
|
|
|
(2,323
|
)
|
|
|
|
|
|
Gross profit
|
|
|
3,334
|
|
|
|
3,260
|
|
|
|
|
|
|
Selling, general, and administrative expenses(a)
|
|
|
(2,463
|
)
|
|
|
(2,327
|
)
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
(19
|
)
|
|
|
(28
|
)
|
|
|
|
|
|
Gain on acquisition of Chaps
|
|
|
-
|
|
|
|
16
|
|
|
|
|
|
|
Restructuring and other charges
|
|
|
(7
|
)
|
|
|
(16
|
)
|
|
|
|
|
|
Total other operating expenses, net
|
|
|
(2,489
|
)
|
|
|
(2,355
|
)
|
|
|
|
|
|
Operating income
|
|
|
845
|
|
|
|
905
|
|
|
|
|
|
|
Foreign currency losses
|
|
|
(14
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
Interest expense
|
|
|
(12
|
)
|
|
|
(16
|
)
|
|
|
|
|
|
Interest and other income, net
|
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
Equity in losses of equity-method investees
|
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
814
|
|
|
|
877
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(236
|
)
|
|
|
(254
|
)
|
|
|
|
|
|
Net income
|
|
$
|
578
|
|
|
$
|
623
|
|
|
|
|
|
|
Net income per share - Basic
|
|
$
|
6.53
|
|
|
$
|
6.89
|
|
|
|
|
|
|
Net income per share - Diluted
|
|
$
|
6.46
|
|
|
$
|
6.74
|
|
|
|
|
|
|
Weighted average shares outstanding - Basic
|
|
|
88.5
|
|
|
|
90.4
|
|
|
|
|
|
|
Weighted average shares outstanding - Diluted
|
|
|
89.5
|
|
|
|
92.4
|
|
|
|
|
|
|
Dividends declared per share
|
|
$
|
1.35
|
|
|
$
|
1.25
|
|
|
|
|
|
|
(a) Includes total depreciation expense of:
|
|
$
|
(200
|
)
|
|
$
|
(165
|
)
|
|
|
|
|
|
|
|
|
|
|
RALPH LAUREN CORPORATION
|
|
OTHER INFORMATION
|
|
(in millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
|
|
Net revenues and operating income for the periods ended December 27,
2014 and December 28, 2013 for each segment were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 27,
|
|
December 28,
|
|
|
December 27,
|
|
December 28,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
$
|
837
|
|
|
$
|
840
|
|
|
|
$
|
2,488
|
|
|
$
|
2,503
|
|
|
Retail
|
|
|
1,149
|
|
|
|
1,130
|
|
|
|
|
3,115
|
|
|
|
2,953
|
|
|
Licensing
|
|
|
47
|
|
|
|
45
|
|
|
|
|
132
|
|
|
|
127
|
|
|
Total net revenues
|
|
$
|
2,033
|
|
|
$
|
2,015
|
|
|
|
$
|
5,735
|
|
|
$
|
5,583
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
$
|
207
|
|
|
$
|
217
|
|
|
|
$
|
634
|
|
|
$
|
667
|
|
|
Retail
|
|
|
194
|
|
|
|
221
|
|
|
|
|
499
|
|
|
|
521
|
|
|
Licensing
|
|
|
42
|
|
|
|
40
|
|
|
|
|
120
|
|
|
|
115
|
|
|
|
|
|
443
|
|
|
|
478
|
|
|
|
|
1,253
|
|
|
|
1,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses
|
|
|
(127
|
)
|
|
|
(130
|
)
|
|
|
|
(401
|
)
|
|
|
(398
|
)
|
|
Gain on acquisition of Chaps
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
16
|
|
|
Unallocated restructuring and other charges
|
|
|
(1
|
)
|
|
|
(14
|
)
|
|
|
|
(7
|
)
|
|
|
(16
|
)
|
|
Total operating income
|
|
$
|
315
|
|
|
$
|
334
|
|
|
|
$
|
845
|
|
|
$
|
905
|
|
|
|
|
|
|
|
|
|
|
|
|
* During the fourth quarter of Fiscal 2014, the Company changed the
manner in which it allocates certain costs for management reporting due
to strategic changes it implemented to globalize certain functions that
will position the Company for future growth. These changes included
realigning certain costs between segments and retaining other costs at
the corporate level for some of the Company's global functions.
Management believes these changes allow for a better representation of
segment profitability and are aligned with how segment performance is
assessed. This expense realignment did not result in a change to the
Company’s reportable segments. However, as a result of these changes,
the Company determined that it is more appropriate to retain certain
previously allocated corporate expenses within its corporate unallocated
expenses. All prior period segment information has been recast to
reflect the change in the Company’s segment measurement on a comparable
basis. This recast had no impact on the Company’s consolidated financial
statements in any period.
RALPH LAUREN CORPORATION
|
Constant Currency Financial Measures
|
(in millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Same - Store Sales Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 27, 2014
% Change
|
|
Nine Months Ended
December 27, 2014
% Change
|
|
|
As Reported
|
|
Constant Currency
|
|
As Reported
|
|
Constant Currency
|
Total Ralph Lauren
|
|
|
(2
|
%)
|
|
|
0
|
%
|
|
0
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
% Change
|
|
|
December 27, 2014
|
|
December 28, 2013
|
|
As Reported
|
|
Constant Currency
|
Wholesale net sales
|
|
$
|
837
|
|
|
$
|
840
|
|
|
(0.4
|
%)
|
|
1.5
|
%
|
Retail net sales
|
|
|
1,149
|
|
|
|
1,130
|
|
|
1.7
|
%
|
|
4.5
|
%
|
Net sales
|
|
|
1,986
|
|
|
|
1,970
|
|
|
0.8
|
%
|
|
3.2
|
%
|
Licensing revenue
|
|
|
47
|
|
|
|
45
|
|
|
6.1
|
%
|
|
6.1
|
%
|
Net revenues
|
|
$
|
2,033
|
|
|
$
|
2,015
|
|
|
0.9
|
%
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
% Change
|
|
|
December 27, 2014
|
|
December 28, 2013
|
|
As Reported
|
|
Constant Currency
|
Wholesale net sales
|
|
$
|
2,488
|
|
|
$
|
2,503
|
|
|
(0.6
|
%)
|
|
(0.1
|
%)
|
Retail net sales
|
|
|
3,115
|
|
|
|
2,953
|
|
|
5.5
|
%
|
|
5.9
|
%
|
Net sales
|
|
|
5,603
|
|
|
|
5,456
|
|
|
2.7
|
%
|
|
3.2
|
%
|
Licensing revenue
|
|
|
132
|
|
|
|
127
|
|
|
3.9
|
%
|
|
3.9
|
%
|
Net revenues
|
|
$
|
5,735
|
|
|
$
|
5,583
|
|
|
2.7
|
%
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Copyright Business Wire 2015