Ralph Lauren(RL) - 2025 Q1 - Quarterly Results

Revenue Performance - First quarter revenue increased 1% to $1.5 billion on a reported basis and 3% in constant currency, with growth driven by Europe and Asia[1] - Net revenues for the three months ended June 29, 2024, were $1,512.2 million, a slight increase from $1,496.5 million in the same period last year, representing a growth of 1.1%[26] - Total net revenues for the same period reached $1,512.2 million, up 1.1% from $1,496.5 million year-over-year[30] - North America segment revenues decreased by 3.7% to $608.2 million, while Europe and Asia segments saw increases of 6.3% and 3.6%, respectively[30] - North America revenue decreased 4% to $608 million, with retail comparable store sales increasing 1%[5] - Europe revenue increased 6% to $479 million, with retail comparable store sales up 8%[6] - Asia revenue increased 4% to $391 million, with comparable store sales up 9%[7] Profitability Metrics - Adjusted gross margin was 70.5%, up 170 basis points from the prior year, driven by favorable product and geographic mix shifts[7] - Gross profit for the same period was $1,065.8 million, compared to $1,032.0 million in the prior year, indicating a year-over-year increase of 3.3%[26] - Operating income rose to $208.5 million, up from $166.4 million, reflecting a significant increase of 25.4%[26] - Operating income for the three months ended June 29, 2024, was $208.5 million, compared to $166.4 million in the prior year, reflecting a 25.4% increase[28] - Net income for the quarter was $168.6 million, compared to $132.1 million in the previous year, marking a year-over-year growth of 27.6%[26] - Basic net income per common share increased to $2.67 from $2.01, representing a growth of 33%[26] - Net income for the three months ended June 29, 2024, was $168.6 million, an increase from $132.1 million in the same period last year, representing a 27.5% growth[27] - Operating income was $208.5 million, with an operating margin of 13.8%, adjusted to $226.9 million and 14.8% respectively in constant currency[34] Shareholder Returns - The company returned approximately $225 million to shareholders through dividends and stock repurchases[1] - The company repurchased $201.2 million in common stock during the quarter, significantly higher than $56.8 million in the same period last year[27] Financial Position - The company ended the quarter with $1.8 billion in cash and short-term investments, down 13% in inventory compared to the prior year[12] - Total current assets increased to $3,447.9 million from $3,359.8 million, a rise of 2.6%[25] - Total liabilities rose to $4,274.0 million from $4,152.3 million, reflecting an increase of 2.9%[25] - Cash and cash equivalents decreased to $1,586.9 million from $1,662.2 million, a decline of 4.5%[25] - The company reported an increase in inventories to $1,039.1 million, up from $902.2 million, indicating a rise of 15.2%[25] Future Outlook - Full year Fiscal 2025 outlook reaffirms low-single digit revenue growth and adjusted operating margin expansion of 100 to 120 basis points[1] - Capital expenditures for Fiscal 2025 are expected to be approximately $300 million to $325 million[15] - The company's full year Fiscal 2025 guidance excludes potential restructuring-related and other charges[44] - The second quarter guidance also does not account for any future charges that may be incurred[44] Digital Strategy - The company aims to enhance its digital footprint and capabilities to expand its direct-to-consumer presence[22] - Global direct-to-consumer comparable store sales grew 5%, supported by positive retail comps across all regions[1] - Digital commerce sales in North America declined by 4%, while Europe and Asia saw increases of 14% and 21%, respectively[29] Currency Impact - The company emphasizes the impact of foreign currency exchange rate fluctuations on its reported results, providing constant currency measures for better comparability[41] - Net revenues for the three months ended June 29, 2024, were reported at $1,512.2 million, with a constant currency adjustment resulting in $1,538.3 million[34] Other Financial Information - Total other operating expenses, net, were reported at $(857.3) million, with an operating expense margin of 56.7%[34] - The effective tax rate for the period was 22.1%[34] - Adjustments for the three months ended June 29, 2024, included $3.3 million for restructuring activities and $2.3 million related to the Next Generation Transformation project[37] - The company reported a net cash used in investing activities of $87.6 million, compared to $77.5 million in the previous year[27] - Cash flows from operating activities were $277.3 million, slightly up from $270.7 million year-over-year[27] Store Network Expansion - Ralph Lauren's global retail store network expanded to 565 directly operated stores, up from 560 a year ago, with notable growth in Asia[33]