Ralph Lauren(US:RL)2025-05-22 12:11Financial Performance - Fourth quarter revenue increased 8% to $1.7 billion on a reported basis and 10% in constant currency, while full year revenue rose 7% to $7.1 billion[4][15]. - Net revenues for the three months ended March 29, 2025, increased to $1,697.3 million, a rise of 8.3% compared to $1,567.9 million for the same period in 2024[46]. - Gross profit for the twelve months ended March 29, 2025, reached $4,852.9 million, up from $4,431.8 million in 2024, reflecting a strong performance[46]. - Operating income for the three months ended March 29, 2025, was $155.0 million, compared to $107.8 million in the prior year, marking a significant increase[46]. - Net income for the twelve months ended March 29, 2025, was $742.9 million, an increase of 14.9% from $646.3 million in 2024[44]. - Total segment operating income for the twelve months ended March 29, 2025, was $1,745.3 million, up from $1,478.3 million in 2024, indicating robust growth across segments[46]. - Retail sales for the twelve months ended March 29, 2025, reached $4,770.1 million, up from $4,351.0 million in the previous year, reflecting a growth of 9.6%[57]. - For the three months ended March 29, 2025, net income was reported at $129.0 million, compared to $90.7 million for the same period in 2024, representing an increase of 42.2%[60]. - The adjusted net income for the twelve months ended March 29, 2025, was $788.9 million, up from $685.8 million in the previous year, reflecting a growth of 15.1%[60]. Revenue Growth by Region - North America revenue in the fourth quarter increased 6% to $705 million, with comparable store sales up 9%[11][18]. - Europe revenue in the fourth quarter increased 12% to $526 million on a reported basis, with comparable store sales up 18%[11][18]. - Asia revenue in the fourth quarter increased 9% to $432 million on a reported basis, with comparable store sales up 15%[11][18]. Shareholder Returns - The company returned a total of $625 million to shareholders through dividends and stock repurchases in Fiscal 2025, with a 10% dividend increase approved[4][24][25]. - The company declared dividends of $0.825 per share for the three months ended March 29, 2025, compared to $0.75 per share in the same period last year[46]. Future Outlook - For Fiscal 2026, the company expects revenue growth of low-single digits on a constant currency basis, reflecting caution on the global operating environment[4][27]. - Operating margin for Fiscal 2026 is expected to expand modestly, with gross margin projected to be approximately flat in constant currency[4][28]. - The full year Fiscal 2026 tax rate is expected to be in the range of 20% to 22%[30]. - Capital expenditures for Fiscal 2026 are planned to be approximately 4% to 5% of revenue[30]. Customer Acquisition and Digital Strategy - The company recruited 5.9 million new customers in direct-to-consumer channels during Fiscal 2025, supported by growth in social media followers[4][8]. - The company is focused on enhancing its digital footprint and capabilities to expand its direct-to-consumer presence[36]. - The company is undergoing a Next Generation Transformation project aimed at significantly transforming its operations towards a global direct-to-consumer model[62]. Financial Position - Total assets increased to $7,047.3 million in March 2025 from $6,602.6 million in March 2024, representing a growth of approximately 6.7%[39]. - Current liabilities rose to $2,133.7 million in March 2025 from $1,467.2 million in March 2024, an increase of approximately 45.4%[39]. - Retained earnings increased to $7,590.1 million in March 2025 from $7,051.6 million in March 2024, reflecting a growth of approximately 7.6%[39]. - The company reported cash and cash equivalents of $1,922.5 million as of March 2025, up from $1,662.2 million in March 2024, a rise of approximately 15.6%[39]. - The company’s total liabilities increased to $4,458.8 million in March 2025 from $4,152.3 million in March 2024, an increase of approximately 7.4%[39]. - The company’s net cash and short-term investments amounted to $940.4 million in March 2025, compared to $642.7 million in March 2024, a growth of approximately 46.4%[39]. - The company’s total equity increased to $2,588.5 million in March 2025 from $2,450.3 million in March 2024, reflecting a growth of approximately 5.6%[39]. Operating Metrics - Fourth quarter adjusted gross margin was 68.6%, 200 basis points above the prior year, driven by favorable geographic, channel, and product mix[9][16]. - Digital commerce sales in North America increased by 8% for the three months ended March 29, 2025, while brick-and-mortar sales rose by 9%[48]. - In Europe, digital commerce sales surged by 25% for the three months ended March 29, 2025, with brick-and-mortar sales increasing by 16%[48]. - The gross profit margin for the three months ended March 29, 2025, was 68.6%, compared to 66.6% for the same period in 2024[57]. - The adjusted operating margin for the twelve months ended March 29, 2025, was 14.0%, compared to 12.5% for the same period in 2024[59]. Tax and Earnings Per Share - The effective tax rate for the three months ended March 29, 2025, was 20.5%, compared to 18.7% for the same period in 2024[60]. - The diluted earnings per share (EPS) for the three months ended March 29, 2025, was $2.03, an increase from $1.38 in the same period of 2024, marking a growth of 47.0%[60]. - The adjusted effective tax rate for the twelve months ended March 29, 2025, was 21.8%, compared to 19.1% for the same period in 2024[60]. Store Operations - The total number of directly operated stores globally remained stable at 564 as of March 29, 2025, compared to the same number in 2024[54]. - The company opened 20 new Ralph Lauren stores in Asia, increasing the total to 154 stores as of March 29, 2025, compared to 138 stores in 2024[54]. - Licensing revenues for the twelve months ended March 29, 2025, totaled $144.6 million, consistent with $146.3 million in the previous year[57]. Impairment Charges - The company recorded impairment charges related to the write-down of long-lived assets in connection with certain North America wholesale shops[62].