Ralph Lauren(US:RL)2024-11-07 13:25Financial Performance - Second quarter revenue increased 6% to $1.7 billion on a reported basis, with a 10% growth in global direct-to-consumer comparable store sales[1][6] - Earnings per diluted share for the second quarter were $2.31, up 5% year-over-year on a reported basis, and $2.54, up 21% on an adjusted basis[1][14] - Net revenues for the three months ended September 28, 2024, increased to $1,726.0 million, a 5.7% increase compared to $1,633.0 million for the same period in 2023[34] - Gross profit for the six months ended September 28, 2024, was $2,221.5 million, up from $2,102.1 million in the prior year, reflecting a strong performance[34] - Operating income for the three months ended September 28, 2024, was $178.9 million, compared to $164.5 million in the same period last year, indicating a growth of 8.2%[34] - The company reported a net income of $147.9 million for the three months ended September 28, 2024, slightly up from $146.9 million in the prior year[34] - Net revenues for the six months ended September 28, 2024, were reported at $3,238.2 million, with a gross profit of $2,221.5 million, resulting in a gross profit margin of 68.6%[46] - Operating income for the same period was $387.4 million, with an operating margin of 12.0%[46] - Net income for the six months ended September 28, 2024, was $316.5 million, translating to a net income per diluted common share of $4.93[46] Revenue by Geography - Revenue growth by geography included Asia up 9% to $380 million, Europe up 7% to $566 million, and North America up 3% to $739 million[5][7][8] - North America segment revenues increased by 3.0% to $739.5 million for the three months ended September 28, 2024, compared to $717.8 million in the same period last year[37] - Europe segment revenues grew by 7.4% to $565.9 million for the three months ended September 28, 2024, compared to $526.8 million in the same period last year[39] - Asia segment revenues increased by 9.1% to $380.2 million for the three months ended September 28, 2024, compared to $348.4 million in the same period last year[39] - North America contributed $739.5 million to net revenues, while Europe and Asia contributed $565.9 million and $380.2 million, respectively[45] Shareholder Returns - The company returned approximately $375 million to shareholders through dividends and stock repurchases year-to-date[1][16] - The company declared a dividend of $0.825 per share for the three months ended September 28, 2024, up from $0.75 per share in the prior year[34] Assets and Liabilities - Total assets increased to $6,800.0 million as of September 28, 2024, compared to $6,602.6 million on March 30, 2024, and $6,723.1 million on September 30, 2023[33] - Cash and cash equivalents decreased to $1,355.0 million from $1,662.2 million in March 2024 and $1,381.8 million in September 2023[33] - Current liabilities increased significantly to $2,092.4 million from $1,467.2 million in March 2024 and $1,610.4 million in September 2023[33] - Long-term debt decreased to $742.2 million from $1,140.5 million in March 2024 and $1,139.5 million in September 2023[33] - Retained earnings increased to $7,265.4 million from $7,051.6 million in March 2024 and $6,779.7 million in September 2023[33] - Total equity slightly decreased to $2,442.3 million from $2,450.3 million in March 2024 and increased from $2,369.2 million in September 2023[33] Inventory Management - Inventory at the end of the second quarter was $1.1 billion, down 6% compared to the prior year, indicating strategic reductions in North America[16] - Inventories rose to $1,127.9 million, up from $902.2 million in March 2024 and down from $1,195.3 million in September 2023[33] - Future strategies include managing inventory levels effectively and responding to changing consumer demands[30] Direct-to-Consumer Strategy - The company acquired 1.5 million new consumers in direct-to-consumer businesses, with over 62 million social media followers, reflecting a low double-digit increase from last year[3] - The company is focused on expanding its direct-to-consumer presence and enhancing digital capabilities[30] - The total number of directly operated stores globally increased to 570 as of September 28, 2024, compared to 564 a year earlier[44] - The company reported a total of 238 Ralph Lauren stores in Asia, an increase from 128 stores in the previous year[44] Operating Expenses - The company recorded total other operating expenses of $(1,834.1) million for the six months ended September 28, 2024, reflecting a significant impact on overall profitability[46] - Total adjusted other operating expenses, net excluding marketing expenses for the three months ended September 30, 2023, were $763.5 million, with an operating expense margin of 46.8%[57] - The company reported total other operating expenses, net as adjusted (including marketing) of $896.6 million for the same period[57] - The operating expense margin for the three months ended September 30, 2023, was 54.9% when including marketing expenses[57] Guidance and Future Outlook - The company expects full year Fiscal 2025 revenue growth in the range of 3% to 4%, with operating margin expansion of approximately 110 to 130 basis points[19][20] - Capital expenditures for Fiscal 2025 are projected to be approximately $250 million to $300 million[22] - Full year Fiscal 2025 guidance excludes potential restructuring-related and other charges that may be incurred in future periods[61] - The company is unable to provide a full reconciliation of non-U.S. GAAP financial measures to U.S. GAAP due to the uncertain nature of potential future charges[61]