Ralph Lauren(RL) - 2025 Q3 - Quarterly Report

Financial Performance - For the third quarter of Fiscal 2025, the company reported net revenues of $1.2 billion, a 5$2.143 billion, a 10.8% increase compared to $1.934 billion for the same period in 2023[180]. - Net revenues increased by$209.5 million, or 10.8%, to $2.143 billion for the three months ended December 28, 2024, compared to the prior year[198]. - Net revenues for the nine months ended December 28, 2024, increased by$318.2 million, or 6.3%, to $5.3817 billion, with growth across all reportable segments[223]. - North America net revenues increased by$62.6 million, or 2.7%, driven by an $85.7 million increase in retail, despite a$23.1 million decline in wholesale[226]. - Europe net revenues rose by $150.6 million, or 10.0$105.5 million, or 9.0%, for the nine months ended December 28, 2024, compared to the prior year, with a constant currency increase of $138.7 million, or 11.8$297.4 million, up from $276.6 million in the prior year, resulting in net income per diluted share of$4.66, an increase of $0.47[180][184]. - Net income increased to$613.9 million for the nine months ended December 28, 2024, up from $555.6 million in the prior year[243]. - Net income per diluted share rose to$9.57, an increase of $1.26 from$8.31 in the prior year[244]. - Operating income increased by $128.5 million, or 19.8$777.1 million, with operating income as a percentage of net revenues improving to 14.4%[235]. - Total operating income increased by $72.0 million to$389.7 million, with an operating margin improvement of 180 basis points to 18.2% for the three months ended December 28, 2024[212]. Expenses and Costs - Selling, general, and administrative expenses as a percentage of net revenues decreased by 30 basis points to 49.7% for the three months ended December 28, 2024, due to operating leverage on higher revenues[183]. - SG&A expenses increased by $178.6 million, or 6.6$2.873 billion, with SG&A as a percentage of net revenues rising to 53.4% from 53.2%[232]. - The company incurred other charges of $9.1 million and$17.1 million related to the preliminary phase of the Next Generation Transformation project during the three-month and nine-month periods ended December 28, 2024, respectively[173]. - The company experienced a net restructuring-related charge of $12.2 million during the three months ended December 28, 2024, which reduced net income by$10.5 million[186]. Cash Flow and Investments - The company ended the third quarter of Fiscal 2025 with a net cash and short-term investments position of $1.001 billion, up from$642.7 million at the end of Fiscal 2024[187]. - Net cash provided by operating activities was $1.113 billion for the nine months ended December 28, 2024, compared to$948.7 million for the same period in 2023[188]. - Cash and cash equivalents increased by $278.0 million to$1.940 billion as of December 28, 2024, compared to March 30, 2024[245]. - The company generated $1.113 billion in net cash flows from operations during the nine months ended December 28, 2024[254]. - Net cash used in investing activities rose to$224.4 million, compared to $204.2 million in the previous year, marking a$20.2 million increase primarily driven by capital expenditures[250]. - Net cash used in financing activities increased to $571.2 million from$491.8 million, with a $75.8 million rise in cash used for share repurchases, totaling$348.5 million during the nine months ended December 28, 2024[252]. Market Performance - Approximately 55% of Fiscal 2024 net revenues were generated outside the U.S., indicating strong international performance[169]. - The North America segment accounted for about 44% of Fiscal 2024 net revenues, primarily from retail and wholesale sales in the U.S. and Canada[170]. - The Europe segment represented approximately 30% of Fiscal 2024 net revenues, with a diverse mix of retail and wholesale sales across various countries[170]. - The Asia segment contributed around 24% to Fiscal 2024 net revenues, with significant sales through both retail and wholesale channels[170]. - Digital commerce sales increased by 8%, while brick-and-mortar sales rose by 13%, leading to total comparable store sales growth of 12%[199]. Strategic Initiatives - The company plans to enhance its digital commerce capabilities to expand its direct-to-consumer presence[161]. - The company is focused on maintaining its brand image and reputation while responding to changing fashion trends and consumer demands[161]. - The company aims to achieve its sustainability goals, including those related to climate change and supply chain practices[161]. - The company is actively managing inventory levels to address pressures on margins in a highly promotional retail environment[160]. - The company is exploring strategic acquisitions to integrate new businesses into its existing operations[164]. Economic Environment - The global economic environment continues to be challenging, with inflationary pressures and geopolitical uncertainties impacting consumer sentiment and spending[174][175]. Accounting and Compliance - A qualitative approach was used for the annual goodwill assessment, concluding that fair values of reporting units significantly exceed their carrying values[282]. - There have been no significant changes in the application of critical accounting policies since March 30, 2024[281]. - The company has not identified any reporting units at risk of impairment based on the latest qualitative assessment[282]. - Recent accounting standards may impact the company's consolidated financial statements in future reporting periods[283].