Ralph Lauren(US:RL)2024-11-07 15:33Revenue Breakdown - North America segment accounted for approximately 44% of Fiscal 2024 net revenues, primarily from retail and wholesale sales in the U.S. and Canada [179]. - Europe segment represented about 30% of Fiscal 2024 net revenues, with sales through retail and wholesale businesses in Europe and emerging markets [180]. - Asia segment contributed approximately 24% of Fiscal 2024 net revenues, focusing on retail and wholesale sales in Asia, Australia, and New Zealand [181]. - Approximately 55% of Fiscal 2024 net revenues were generated outside of the U.S. [183]. - For the three months ended September 28, 2024, the company reported net revenues of $1.726 billion, a 5.7% increase from $1.633 billion in the same period last year [194]. - During the six months ended September 28, 2024, net revenues reached $3.238 billion, reflecting a 3.5% increase compared to $3.130 billion in the prior year [195]. - Net revenues increased by $93.0 million, or 5.7%, to $1.726 billion for the three months ended September 28, 2024, compared to the same period in 2023 [213]. - Net revenues for the six months ended September 28, 2024, increased by $108.7 million, or 3.5%, to $3.238 billion, driven by direct-to-consumer channels and international businesses [242]. Profitability Metrics - Net income for the same period was $147.9 million, up from $146.9 million, resulting in net income per diluted share of $2.31, an increase of $0.12 from $2.19 [194]. - Gross profit as a percentage of net revenues increased by 150 basis points to 67.0% for the three months ended September 28, 2024, driven by favorable product and geographic mix shifts [196]. - Operating income increased by $14.4 million, or 8.8%, to $178.9 million, with operating income as a percentage of net revenues at 10.4% [212]. - Net income increased to $147.9 million for the three months ended September 28, 2024, compared to $146.9 million for the same period last year [239]. - Net income per diluted share rose to $2.31, up from $2.19, primarily due to lower weighted-average diluted shares outstanding and higher net income [240]. - Net income increased to $316.5 million for the six months ended September 28, 2024, up from $279.0 million for the same period in 2023, representing a $37.5 million increase [264]. - Net income per diluted share rose to $4.93 for the six months ended September 28, 2024, compared to $4.15 for the same period in 2023, an increase of $0.78 per share [265]. Expenses and Cost Management - Selling, general, and administrative expenses as a percentage of net revenues increased by 60 basis points to 55.5% for the three months ended September 28, 2024, largely due to higher marketing investments [197]. - SG&A expenses increased by $62.1 million, or 6.9%, to $958.4 million, with SG&A as a percentage of net revenues rising to 55.5% [226]. - SG&A expenses increased by $62.1 million, driven by compensation-related expenses of $26.2 million, marketing and advertising expenses of $17.6 million, and rent and occupancy expenses of $8.9 million [227]. - Selling, General, and Administrative (SG&A) expenses increased by $82.0 million, or 4.7%, to $1.808 billion, with SG&A as a percentage of net revenues rising to 55.8% [253]. Cash Flow and Investments - Net cash provided by operating activities was $374.5 million during the six months ended September 28, 2024, compared to $343.6 million in the same period last year [202]. - Cash and cash equivalents decreased to $1,355.0 million as of September 28, 2024, down from $1,662.2 million as of March 30, 2024, a change of $307.2 million [267]. - Net cash used in investing activities increased to $279.8 million for the six months ended September 28, 2024, compared to $132.9 million for the same period in 2023, a rise of $146.9 million [274]. - Net cash used in financing activities was $439.9 million for the six months ended September 28, 2024, up from $335.1 million for the same period in 2023, an increase of $104.8 million [277]. - The company reported a net unfavorable change in operating assets and liabilities, primarily due to higher in-transit inventory and a decline in wholesale net revenues [272][273]. Operational Challenges and Strategic Initiatives - The business is affected by seasonal trends, with higher retail sales in the second and third fiscal quarters [184]. - The company is focused on managing inventory levels amid increasing pressure on margins in a highly promotional retail environment [167]. - The company faces risks from supply chain disruptions, inflationary pressures, and geopolitical tensions impacting its operations [166]. - The company aims to enhance its digital footprint and capabilities to expand direct-to-consumer presence [167]. - The company plans to introduce new products and brands, as well as enter into or renew alliances [168]. - The company continues to face challenges from global economic conditions, including inflationary pressures and supply chain disruptions, which have impacted consumer sentiment and spending [187]. Capital Structure and Financing - The company issued $400 million of 3.750% Senior Notes due September 15, 2025, and $750 million of 2.950% Senior Notes due June 15, 2030 [285]. - The company has a $750 million senior unsecured revolving line of credit available until June 30, 2028, with the potential to expand to $1.5 billion [287]. - As of September 28, 2024, the remaining availability under the Class A common stock repurchase program was approximately $502 million [290]. - The quarterly cash dividend was increased from $0.75 to $0.825 per share as of May 16, 2024 [292]. - The company has maintained a regular quarterly cash dividend program since 2003 [292]. Asset Management - The company actively monitors its investment portfolio to ensure capital preservation and adequate liquidity [305]. - The company performed its annual goodwill assessment and concluded that no reporting units were at risk of impairment [308]. - The company had cash and cash equivalents of $1.355 billion and short-term investments of $334.7 million as of September 28, 2024 [304]. - As of September 28, 2024, the company had $1.690 billion in cash, cash equivalents, and short-term investments, with $1.359 billion held by subsidiaries outside the U.S. [279].