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Ralph Lauren reports fourth quarter of fiscal 2020

Ralph Lauren

Ralph Lauren Corporation, a global leader in the design, marketing, and distribution of premium lifestyle products, reported earnings per diluted share of $3.38 on a reported basis and $0.68 on an adjusted basis, excluding restructuring-related and other charges, for the fourth quarter of fiscal 2020.

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This compared to earnings per diluted share of $0.39 on a reported basis and $1.07 on an adjusted basis, excluding restructuring-related and other charges, for the fourth quarter of fiscal 2019.

For fiscal 2020, earnings per diluted share was $4.98 on a reported basis and $6.56 on an adjusted basis, excluding restructuring-related and other charges. This compared to earnings per diluted share of $5.27 on a reported basis and $7.19 on an adjusted basis, excluding restructuring-related and other charges, for the full year of fiscal 2019.

“From the onset of COVID-19, our teams moved quickly around the world to protect the safety and well-being of our employees, consumers, and communities, while also taking steps to ensure our long-term financial health and bring relevant digital commerce and experiences to our consumers,” said Patrice Louvet, President & Chief Executive Officer.

Mr. Louvet continued, “Reflecting on our performance prior to the crisis, our underlying progress was strong, as our AUR and overall brand elevation journey continued across every region, exceeding our expectations for both the quarter and year.”

 In the fourth quarter of fiscal 2020, revenue declined 15% to $1.3 billion on a reported basis and was down 14% in constant currency. The decline in revenue reflects adverse impacts related to COVID-19 and Hong Kong protest business disruptions.

Gross profit was $594 million and gross margin was 46.7%. On an adjusted basis, gross margin was 59.1% compared to 60.1% in the prior year period. Foreign currency negatively impacted gross margin by 20 basis points in the fourth quarter. North America revenue decreased 11% to $629 million, including adverse impacts related to COVID-19 business disruptions across distribution channels. North America wholesale revenue was down 12% to last year. In retail, comparable store sales in North America were down 13%, including a 15% decline in brick and mortar stores and a 7% decrease in digital commerce.

Europe revenue decreased 19% to $353 million on a reported basis and decreased 16% to last year in constant currency, reflecting adverse impacts related to COVID-19 business disruptions across channels. In retail, comparable store sales in Europe were down 16% on a constant currency basis, driven by an 18% decrease in brick and mortar stores and a 2% decrease in digital commerce. Europe wholesale revenue decreased 21% on a reported basis and decreased 18% in constant currency.

Asia revenue  decreased 22% to $214 million on a reported basis and decreased 21% in constant currency, including adverse impacts related to COVID-19 and Hong Kong protest business disruptions. Comparable store sales in Asia decreased 23% in constant currency, with a 15% increase in digital commerce operations more than offset by brick and mortar declines during the period due to COVID-19-related store closures.

Operating expenses were $878 million on a reported basis, including $82 million in restructuring-related and other charges. On an adjusted basis, excluding such charges, operating expenses were $796 million, down 2% to prior year. Adjusted operating expense rate was 62.5%, compared to 53.8% in the prior year period, excluding restructuring-related and other charges, primarily due to fixed expense deleverage.

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“For more than 50 years, we have embraced the idea of timelessness – it defines not only our products but our business and our culture. It has guided us through the best and the worst of times and will carry us through this unprecedented challenge too. Together our leaders and teams worldwide remain focused on not only enduring through this global pandemic but thriving for decades to come, and supporting the communities where we operate around the world,” said Ralph Lauren, Executive Chairman & Chief Creative Officer.

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