Ralph Lauren(US:RL)2025-08-07 14:56Financial Performance - For the three-month period ended June 28, 2025, the company reported net revenues of approximately $1.5 billion, reflecting a 10% increase compared to the same period in the prior year[165]. - Net revenues increased by $206.9 million, or 13.7%, to $1.719 billion for the three months ended June 28, 2025, compared to the same period in 2024, with growth across all reportable segments[181][196]. - Net income rose by $51.8 million to $220.4 million during the same period, reflecting a 30.7% increase year-over-year[185][196]. - Gross profit increased by $176.5 million, or 16.6%, to $1.242 billion, with gross profit as a percentage of net revenues rising to 72.3%[203]. - Operating income increased by $65.1 million, or 31.2%, to $273.6 million, with an operating margin of 15.9%[207]. - Net income per diluted share rose to $3.52 for the three months ended June 28, 2025, compared to $2.61 for the same period in 2024, an increase of $0.91 per share[216]. Revenue Breakdown - The North America segment accounted for approximately 43% of Fiscal 2025 net revenues, while Europe and Asia represented 31% and 24%, respectively[171]. - Approximately 57% of Fiscal 2025 net revenues were generated outside of the U.S., indicating a strong international presence[169]. - North America net revenues rose by $48.0 million, or 7.9%, driven by a $48.1 million increase in comparable store sales[200]. - Europe net revenues increased by $75.4 million, or 15.7%, with a constant currency increase of 10.3%[201]. - Asia net revenues grew by $83.1 million, or 21.2%, with a constant currency increase of 18.9%[202]. Operational Efficiency - Selling, general, and administrative expenses as a percentage of net revenues declined by 100 basis points to 55.2% due to operating leverage on higher revenues[184][196]. - The company is executing a multi-year Next Generation Transformation project aimed at enhancing operational efficiency and transitioning to a direct-to-consumer model[173]. - The company plans to enhance its digital commerce capabilities and expand its direct-to-consumer presence through new retail stores and concession shops[161]. Cash Flow and Liquidity - The company ended the first quarter of Fiscal 2026 with a net cash and short-term investments position of $639.8 million, down from $940.4 million at the end of Fiscal 2025[187]. - Net cash provided by operating activities was $176.1 million, a decrease from $277.3 million in the prior year period[188]. - Cash and cash equivalents increased to $2,090.2 million as of June 28, 2025, from $1,922.5 million as of March 29, 2025, a change of $167.7 million[218]. - The company had $2.277 billion in cash, cash equivalents, and short-term investments as of June 28, 2025, with $1.308 billion held by subsidiaries outside the U.S.[226]. Risk Management - The company is focused on mitigating risks related to supply chain disruptions, including potential delays and increased costs due to geopolitical tensions and natural disasters[161]. - Ongoing global economic challenges, including inflation and geopolitical tensions, are impacting consumer sentiment and may affect future performance[175][177]. - The company has identified risks related to changes in consumer preferences and economic conditions that could impact discretionary spending on luxury products[161]. - The company actively manages foreign currency risk using forward foreign currency exchange and cross-currency swap contracts, primarily related to the Euro and Japanese Yen[249]. Capital Expenditures and Investments - The company plans to spend approximately 4% to 5% of net revenues on capital expenditures in Fiscal 2026, primarily for real estate purchases, store openings, and IT system enhancements[223]. - The company incurred restructuring-related charges of $19.3 million during the three months ended June 28, 2025, compared to $7.4 million in the prior year[186][196]. Shareholder Returns - The quarterly cash dividend was increased from $0.825 to $0.9125 per share, effective May 15, 2025[242]. - As of June 28, 2025, the remaining availability under the Class A common stock repurchase program was approximately $1.602 billion, following an expansion approved on May 15, 2025, allowing for an additional $1.500 billion in repurchases[240]. - The company has maintained a regular quarterly cash dividend program since 2003 and intends to continue this practice, subject to Board discretion[243].