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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended March 31, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-2622036
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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650 Madison Avenue, New York, New York
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10022
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, $.01 par value
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New York Stock Exchange
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the loss of key personnel, including Mr. Ralph Lauren, or other changes in our executive and senior management team or to our operating structure, and our ability to effectively transfer knowledge during periods of transition;
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our ability to successfully implement our long-term growth strategy and achieve anticipated operating enhancements and cost reductions from our restructuring plans;
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the impact to our business resulting from investments and other costs incurred in connection with the execution of our long-term growth strategy, including restructuring-related charges, which may be dilutive to our earnings in the short term;
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our ability to continue to expand or grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result;
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our ability to open new retail stores, concession shops, and digital commerce sites in an effort to expand our direct-to-consumer presence;
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the impact to our business resulting from changes in consumers' ability, willingness, or preferences to purchase premium lifestyle products that we offer for sale and our ability to forecast consumer demand, which could result in either a build-up or shortage of inventory;
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our ability to continue to maintain our brand image and reputation and protect our trademarks;
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our ability to effectively manage inventory levels and the increasing pressure on our margins in a highly promotional retail environment;
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the impact to our business resulting from potential costs and obligations related to the early closure of our stores or termination of our long-term, non-cancellable leases;
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the impact of economic, political, and other conditions on us, our customers, suppliers, vendors, and lenders;
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our ability to secure our facilities and systems and those of our third-party service providers from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, or similar Internet or email events;
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our efforts to successfully enhance, upgrade, and/or transition our global information technology systems and digital commerce platform;
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a variety of legal, regulatory, tax, political, and economic risks, including risks related to the importation and exportation of products, tariffs, and other trade barriers which our operations are currently subject to, or may become subject to as a result of potential changes in legislation, and other risks associated with our international operations, such as compliance with the Foreign Corrupt Practices Act or violations of other anti-bribery and corruption laws prohibiting improper payments, and the burdens of complying with a variety of foreign laws and regulations, including tax laws, trade and labor restrictions, and related laws that may reduce the flexibility of our business;
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changes in our tax obligations and effective tax rate due to a variety of other factors, including potential additional changes in U.S. or foreign tax laws and regulations, accounting rules, or the mix and level of earnings by jurisdiction in future periods that are not currently known or anticipated;
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the impact to our business resulting from the recently enacted U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act, including related changes to our tax obligations and effective tax rate in future periods, as well as the enactment-related charges that were recorded during Fiscal 2018 on a provisional basis based on a reasonable
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2
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the impact to our business resulting from the United Kingdom's decision to exit the European Union and the uncertainty surrounding the terms and conditions of such a withdrawal, as well as the related impact to global stock markets and currency exchange rates;
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the impact to our business resulting from increases in the costs of raw materials, transportation, and labor;
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our exposure to currency exchange rate fluctuations from both a transactional and translational perspective;
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the potential impact to our business resulting from the financial difficulties of certain of our large wholesale customers, which may result in consolidations, liquidations, restructurings, and other ownership changes in the retail industry, as well as other changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors;
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the potential impact on our operations and on our suppliers and customers resulting from natural or man-made disasters;
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the impact to our business of events of unrest and instability that are currently taking place in certain parts of the world, as well as from any terrorist action, retaliation, and the threat of further action or retaliation;
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our ability to maintain our credit profile and ratings within the financial community;
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our ability to access sources of liquidity to provide for our cash needs, including our debt obligations, tax obligations, payment of dividends, capital expenditures, and potential repurchases of our Class A common stock, as well as the ability of our customers, suppliers, vendors, and lenders to access sources of liquidity to provide for their own cash needs;
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the potential impact to the trading prices of our securities if our Class A common stock share repurchase activity and/or cash dividend payments differ from investors' expectations;
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our intention to introduce new products or enter into or renew alliances;
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changes in the business of, and our relationships with, major department store customers and licensing partners; and
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our ability to make certain strategic acquisitions and successfully integrate the acquired businesses into our existing operations.
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3
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Item 1.
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Business.
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4
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Elevating our brand through improved quality of sales, distribution, and product;
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Evolving product, marketing, and shopping experience to increase reach and appeal with new consumers;
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Expanding our digital and international presence; and
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Working in new ways to drive productivity and agility.
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5
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Apparel
— Our apparel products include extensive collections of men's, women's, and children's clothing, which are sold under various brand names, including Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, Chaps, and Club Monaco, among others;
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Accessories
— Our range of accessories encompasses men's, women's, and children's, including footwear, eyewear, watches, fashion and fine jewelry, scarves, hats, gloves, umbrellas, and leather goods, including handbags, luggage, small leather goods, and belts, which are sold under the Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, Chaps, and Club Monaco;
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Home
— Our coordinated home products include bedding and bath products, furniture, fabric and wallpaper, lighting, tabletop, floorcovering, and giftware;
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6
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Fragrance
— Our fragrance offerings capture the essence of Ralph Lauren's men's and women's brands with numerous labels, designed to appeal to a variety of audiences. Women's fragrance products are sold under our Ralph Lauren Collection, Woman by Ralph Lauren, Romance Collection, Ralph Collection, and Big Pony Women's brands. Men's fragrance products are sold under our Polo Blue, Safari, Purple Label, Polo Red, Polo Green, Polo Black, Polo Supreme, Polo Sport, and Big Pony Men's brands; and
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Restaurants
— Our restaurants translate Ralph Lauren's distinctive vision into places to gather with family and friends to enjoy fine food. Our restaurant concepts include
The Polo Bar
in New York City,
RL Restaurant
located in Chicago,
Ralph's
located in Paris, and our Ralph's Coffee
concept, with locations in London and Hong Kong.
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1.
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Ralph Lauren Luxury
— Our Luxury group includes:
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2.
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Polo Ralph Lauren
— The Polo Ralph Lauren group includes:
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7
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3.
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Lauren Ralph Lauren
— Our Lauren group includes:
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4.
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Chaps
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Launched in 1978 and celebrating its 40th anniversary, Chaps presents a vision of timeless, all-American style for men, women, children and home. The complete lifestyle collection offers casual sportswear, workday essentials, tailored clothing, and occasion dresses. Chaps effortless and spirited style is available in over 2,000 doors across the U.S., Canada, Mexico, and China.
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5.
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Club Monaco
— Founded in 1985, Club Monaco is a celebration of the individual. It designs and markets its own clothing and accessories for a new generation of women and men who value versatile, thoughtful design that can take them through every moment of life. Club Monaco apparel and accessories are available at Club Monaco stores and select department stores in North America and around the world, as well as online at ClubMonaco.com and ClubMonaco.ca.
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North America
— Our North America segment, representing approximately
52%
of our
Fiscal 2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. In North America, our wholesale business is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. Our retail business in North America is comprised of our Ralph Lauren stores, our factory stores, and our digital commerce site, www.RalphLauren.com.
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Europe
— Our Europe segment, representing approximately
26%
of our
Fiscal 2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. In Europe, our wholesale business is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country. Our retail business in Europe is comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our various digital commerce sites.
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Asia
— Our Asia segment, representing approximately
15%
of our
Fiscal 2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in Asia, Australia, and New Zealand. Our retail business in Asia is comprised of our Ralph Lauren stores, our factory stores, and our
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8
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March 31,
2018 |
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April 1,
2017 |
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North America
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6,848
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7,018
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Europe
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4,928
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5,690
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Asia
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341
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187
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Other non-reportable segments
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109
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171
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Total
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12,226
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13,066
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9
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March 31,
2018 |
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April 1,
2017 |
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North America
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16,276
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18,979
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Europe
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5,302
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6,164
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Asia
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499
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339
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Other non-reportable segments
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311
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372
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Total
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22,388
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25,854
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10
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Factory Stores
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North America
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174
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Europe
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62
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Asia
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54
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Total
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290
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Concession-based
Shop-within-Shops
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North America
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2
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Europe
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25
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Asia
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603
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Other non-reportable segments
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2
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Total
(a)
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632
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(a)
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Our concession-based shop-within-shops were located at approximately
295
retail locations.
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(a)
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Our Club Monaco business has been aggregated with other non-reportable segments.
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11
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Category
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Licensed Products
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Licensing Partners
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Men's Apparel
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Underwear and Sleepwear
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Hanesbrands, Inc. (includes Japan)
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Chaps, Lauren, and Ralph Tailored Clothing
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Peerless Clothing International, Inc.
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Beauty Products
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Fragrances, Cosmetics, Color, and Skin Care
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L'Oreal S.A. (global)
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Accessories
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Eyewear
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Luxottica Group, S.p.A. (global)
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Home
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Bedding and Bath
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Ichida Co., Ltd.
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Utility and Blankets
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Hollander Sleep Products LLC and Ichida Co., Ltd.
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Fabric and Wallpaper
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P. Kaufmann, Inc.
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12
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13
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14
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anticipate and respond to changing consumer demands in a timely manner;
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create and maintain favorable brand recognition, loyalty, and reputation for quality;
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develop and produce innovative, high-quality products that appeal to consumers of varying age groups;
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competitively price our products and create an acceptable value proposition for consumers;
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provide strong and effective marketing support;
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obtain additional points of distribution and sufficient retail floor space, and effectively present our products to consumers;
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attract consumer traffic to both retail stores and websites;
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source raw materials at cost-effective prices;
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anticipate and maintain proper inventory levels; and
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ensure product availability and optimize supply chain and distribution efficiencies.
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15
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Facility Location
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Geographic Region Serviced
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Facility
Ownership
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Greensboro, North Carolina
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U.S.
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Owned
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N. Pendleton Street, High Point, North Carolina
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U.S.
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Owned
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NC Highway 66, High Point, North Carolina
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U.S.
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Leased
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Eagle Hill Drive, High Point, North Carolina
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U.S.
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Leased
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Chino Hills, California
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U.S.
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Third-party
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Miami, Florida
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U.S.
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Third-party
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Toronto, Ontario
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Canada
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Third-party
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Parma, Italy
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Europe
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Third-party
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Yokohama, Japan
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Japan
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Third-party
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Bugok, South Korea
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South Korea
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Leased
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Tuen Mun, Hong Kong
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Greater China and Southeast Asia
(a)
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Third-party
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Colón, Panama
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Latin America
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Third-party
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(a)
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Includes Australia, China, Hong Kong, Macau, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.
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comprehensive order processing;
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production and design information;
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accounting information; and
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an enterprise view of information for our design, marketing, manufacturing, importing, and distribution functions.
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16
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March 31,
2018 |
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April 1,
2017 |
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(billions)
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North America
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$
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0.6
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$
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0.8
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Europe
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0.4
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0.4
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Total
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$
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1.0
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$
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1.2
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PURPLE LABEL;
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DOUBLE RL;
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RRL;
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17
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RLX;
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LAUREN RALPH LAUREN;
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PINK PONY;
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LAUREN;
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RALPH;
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CHAPS;
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CLUB MONACO; and
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Various other trademarks, including those pertaining to fragrances and cosmetics.
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18
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19
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Ralph Lauren
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Age 78
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Mr. Ralph Lauren founded our business in 1967 and, for five decades, has cultivated the iconography of America into a global lifestyle brand. He has been our Executive Chairman and Chief Creative Officer since November 2015, and a director of the Company since prior to our initial public offering in 1997. He had previously been our Chairman and Chief Executive Officer since prior to our initial public offering in 1997 until November 2015. In addition, he was previously a member of our Advisory Board or the Board of Directors of our predecessors since their organization.
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Patrice Louvet
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Age 53
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Mr. Louvet has served as our President and Chief Executive Officer, and a director of the Company since July 2017. Prior to joining the Company, he served as the Group President, Global Beauty, of Procter & Gamble Co. ("P&G") since February 2015. Prior to that role, Mr. Louvet held successively senior leadership positions at P&G, including the roles of Group President, Global Grooming (Gillette), and President of P&G's Global Prestige Business. Before he joined P&G, he served as a Naval Officer, Admiral Aide de Camp in the French Navy from 1987 to 1989. Mr. Louvet graduated from École Supérieure de Commerce de Paris and received his M.B.A. from the University of Illinois. He has served as a member of the board of directors of Bacardi Limited since July 2012.
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Valérie Hermann
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Age 55
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Ms. Hermann has been our President, Global Brands since September 2016, with responsibility for all aspects of the development of our global brand groups, including Ralph Lauren Luxury, Polo Ralph Lauren, Lauren, Chaps, and Ralph Lauren Home. She served as our Global Brand President of Luxury, Women's Collections, and World of Accessories from May 2016 through September 2016, and was our President of Luxury Collections from April 2014 through April 2016. Ms. Hermann was President and Chief Executive Officer of Reed Krakoff Co. from April 2011 through March 2014. From 2005 to 2011, she served as Chief Executive Officer of Saint Laurent Paris. Prior to that, Ms. Hermann held various positions at LVMH Moët Hennessy Louis Vuitton, including Director of Women's Ready to Wear at Dior.
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David Lauren
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Age 46
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Mr. David Lauren is our Chief Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board. He has served as our Chief Innovation Officer and Vice Chairman of the Board since October 2016. From November 2010 to October 2016, he served as our Executive Vice President of Global Advertising, Marketing and Communications. Prior to that, he served in numerous leadership roles at the Company with responsibility for advertising, marketing, and communications. He has been a director of the Company since August 2013. Mr. D. Lauren oversees the Company's innovation processes and capabilities to drive its brand strength and financial performance across all channels. He has been instrumental in growing the Company's global digital commerce business and pioneering our technology initiatives. He serves on the board of trustees of the Ralph Lauren Center for Cancer Care and Prevention and the board of directors of The National Museum of American History. Mr. D. Lauren is also the Head of The Polo Ralph Lauren Foundation. Before joining the Company in 2000, he was Editor-In-Chief and President of Swing, a general interest publication for Generation X. Mr. D. Lauren is the son of Mr. R. Lauren.
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Jane Hamilton Nielsen
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Age 54
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Ms. Nielsen has been our Chief Financial Officer since September 2016. She served as Chief Financial Officer of Coach, Inc. from September 2011 to August 2016. From 2009 to 2011, she was Senior Vice President and Chief Financial Officer of PepsiCo Beverages Americas and the Global Nutrition Group, divisions of PepsiCo, Inc., with responsibility for all financial management including financial reporting, performance management, capital allocation, and strategic planning. Prior to that, Ms. Nielsen held various senior roles in finance at PepsiCo, Inc. and Pepsi Bottling Group starting in 1996. She also serves on the board of directors of Pinnacle Foods Inc. Ms. Nielsen received her M.B.A. from the Harvard Business School and B.A. from Smith College.
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20
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Item 1A.
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Risk Factors
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21
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higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the U.S.;
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higher than anticipated lease termination and store closure costs (see "
Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases
");
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failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge;
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failure to maintain adequate controls and procedures while executing, and subsequent to completing, our restructuring plans;
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diversion of management attention and resources from ongoing business activities and/or a decrease in employee morale;
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attrition beyond any planned reduction in workforce; and
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damage to our reputation and brand image due to our restructuring-related activities, including the closure of certain of our stores.
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identify new or underpenetrated markets where our products and brand will be accepted by consumers;
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attract customers, particularly in new markets;
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identify desirable freestanding and department store locations, the availability of which may be out of our control;
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negotiate acceptable lease terms, including desired tenant improvement allowances;
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efficiently and cost effectively build-out stores and shop-within-shop locations;
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source sufficient inventory levels to meet the needs of the new stores and shop-within-shops;
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22
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hire, train, and retain competent store personnel; and
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integrate new stores and shop-within-shops into our existing systems and operations.
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23
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anticipating and responding in a timely fashion to changing consumer demands and shopping preferences, including the increasing shift to digital brand engagement, social media communications, and online shopping;
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creating and maintaining favorable brand recognition, loyalty, and a reputation for quality;
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developing and producing innovative, high-quality products in sizes, colors, and styles that appeal to consumers of varying age groups;
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competitively pricing our products and creating an acceptable value proposition for consumers;
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providing strong and effective marketing support;
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obtaining sufficient retail floor space and effective presentation of our products at retail stores;
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attracting consumer traffic to both retail stores and websites;
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•
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sourcing raw materials at cost-effective prices;
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•
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anticipating and maintaining proper inventory levels;
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ensuring product availability and optimizing supply chain and distribution efficiencies with third-party manufacturers and retailers;
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recruiting and retaining key employees;
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maintaining and growing market share; and
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protecting our intellectual property.
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24
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•
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actual and perceived economic conditions;
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employment levels and wage rates;
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stock market performance;
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inflation;
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interest rates;
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25
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foreign currency exchange rates;
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the housing market;
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consumer debt levels;
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the availability of consumer credit;
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commodity prices, including fuel and energy costs;
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taxation;
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consumer confidence in future economic conditions;
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general domestic and international political conditions;
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the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; and
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weather conditions.
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26
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complying with a variety of U.S. and foreign laws and regulations, including, but not limited to, trade, labor, and product safety trading restrictions, as well as the Foreign Corrupt Practices Act, which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business, and similar
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27
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•
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adapting to local customs and culture;
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unexpected changes in laws, judicial processes, or regulatory requirements;
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the imposition of additional duties, tariffs, taxes, and other charges or other barriers to trade;
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changes in diplomatic and trade relationships;
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political instability and terrorist attacks; and
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general economic fluctuations in specific countries or markets.
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28
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•
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changes in social, political, and economic conditions or terrorist acts that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located;
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the imposition of additional regulations, quotas, or safeguards relating to imports or exports, and costs of complying with such regulations and other laws relating to the identification and reporting of the sources of minerals used in our products;
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the imposition of additional duties, tariffs, taxes, and other charges on imports or exports;
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unfavorable changes in the availability, cost, or quality of raw materials and commodities;
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increases in the cost of labor, travel, and transportation;
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•
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disruptions of shipping and international trade caused by natural and man-made disasters, labor strikes, or other unforeseen events;
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heightened terrorism-related security concerns, which could subject imported or exported goods to additional, more frequent, or more thorough inspections, leading to delays in the delivery of cargo;
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decreased scrutiny by customs officials for counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures, and damage to the reputation of our brands;
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pandemic and epidemic diseases, which could result in closed factories, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in infected areas;
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the imposition of anti-dumping or countervailing duty proceedings resulting in the potential assessment of special duties; and
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the imposition of sanctions in the form of additional duties either by the U.S. or its trading partners to remedy perceived illegal actions by national governments.
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29
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30
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31
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32
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•
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obtain capital;
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•
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execute its business plans;
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•
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manage its labor relations;
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•
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maintain relationships with its suppliers and customers; and
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•
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manage its credit and bankruptcy risks effectively.
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33
|
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Location
|
|
Use
|
|
Approximate
Square Feet
|
|
|
|
|
|
Greensboro, NC
|
|
Wholesale and retail distribution facility
|
|
1,300,000
|
NC Highway 66, High Point, NC
|
|
Wholesale and retail distribution facility
|
|
847,000
|
N. Pendleton Street, High Point, NC
|
|
Retail digital commerce call center and distribution facility
|
|
805,000
|
625 Madison Avenue, NYC
|
|
Corporate offices and showrooms
|
|
362,000
|
Eagle Hill Drive, High Point, NC
|
|
Wholesale distribution facility
|
|
343,000
|
650 Madison Avenue, NYC
|
|
Executive and corporate offices, design studio, and showrooms
|
|
270,000
|
Lyndhurst, NJ
|
|
Corporate and retail administrative offices
|
|
178,000
|
601 West 26th Street, NYC
|
|
Corporate offices
|
|
137,800
|
Geneva, Switzerland
|
|
European corporate offices
|
|
107,000
|
7th Avenue, NYC
|
|
Corporate offices, design studio, and Women's showrooms
|
|
104,000
|
Manhattan Place, Hong Kong
|
|
Asia sourcing offices
|
|
46,000
|
Gateway Office, Hong Kong
|
|
Asia corporate offices
|
|
37,500
|
888 Madison Avenue, NYC
|
|
Retail flagship store
|
|
37,900
|
N. Michigan Avenue, Chicago
|
|
Retail flagship store
|
|
37,500
|
New Bond Street, London, UK
|
|
Retail flagship store
|
|
31,500
|
867 Madison Avenue, NYC
|
|
Retail flagship store
|
|
27,700
|
Paris, France
|
|
Retail flagship store
|
|
25,700
|
Tokyo, Japan
|
|
Retail flagship store
|
|
25,000
|
N. Rodeo Drive, Beverly Hills
|
|
Retail flagship store
|
|
19,400
|
Regent Street, London, UK
|
|
Retail flagship store
|
|
19,000
|
|
34
|
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
|
35
|
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
|
Market Price of
Class A
Common Stock
|
|
Dividends
Declared per
Common Share
|
||||||||
|
|
High
|
|
Low
|
|
|||||||
Fiscal 2018:
|
|
|
|
|
|
|
||||||
First Quarter
|
|
$
|
84.47
|
|
|
$
|
66.06
|
|
|
$
|
0.50
|
|
Second Quarter
|
|
92.55
|
|
|
70.36
|
|
|
0.50
|
|
|||
Third Quarter
|
|
105.52
|
|
|
83.26
|
|
|
0.50
|
|
|||
Fourth Quarter
|
|
119.33
|
|
|
100.09
|
|
|
0.50
|
|
|||
Fiscal 2017:
|
|
|
|
|
|
|
||||||
First Quarter
|
|
$
|
98.50
|
|
|
$
|
83.66
|
|
|
$
|
0.50
|
|
Second Quarter
|
|
109.85
|
|
|
87.26
|
|
|
0.50
|
|
|||
Third Quarter
|
|
114.00
|
|
|
89.24
|
|
|
0.50
|
|
|||
Fourth Quarter
|
|
93.05
|
|
|
75.62
|
|
|
0.50
|
|
|
|
Total Number of Shares Purchased
(a)
|
|
Average
Price
Paid per
Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Approximate Dollar
Value of Shares
That May Yet Be
Purchased Under the
Plans or Programs
(b)
|
||||||
|
|
|
|
|
|
|
|
(millions)
|
||||||
December 31, 2017 to January 27, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
100
|
|
January 28, 2018 to February 24, 2018
|
|
639
|
|
|
116.20
|
|
|
—
|
|
|
100
|
|
||
February 25, 2018 to March 31, 2018
|
|
7,098
|
|
|
108.46
|
|
|
—
|
|
|
100
|
|
||
|
|
7,737
|
|
|
|
|
—
|
|
|
|
|
(a)
|
Represents shares surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under its long-term stock incentive plans.
|
(b)
|
Repurchases of shares of Class A common stock are subject to overall business and market conditions.
|
|
36
|
|
Item 6.
|
Selected Financial Data
|
|
37
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Overview.
This section provides a general description of our business, global economic conditions and industry trends, and a summary of our financial performance for
Fiscal 2018
. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our results of operations and financial condition, and in anticipating future trends.
|
•
|
Results of operations.
This section provides an analysis of our results of operations for
Fiscal 2018
and
Fiscal 2017
as compared to the respective prior fiscal year.
|
•
|
Financial condition and liquidity.
This section provides a discussion of our financial condition and liquidity as of
March 31, 2018
, which includes (i) an analysis of our financial condition as compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for
Fiscal 2018
and
Fiscal 2017
as compared to the respective prior fiscal year; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, common stock repurchases, payments of dividends, and our outstanding debt and covenant compliance; and (iv) a summary of our contractual and other obligations as of
March 31, 2018
.
|
•
|
Market risk management.
This section discusses how we manage our risk exposures related to foreign currency exchange rates, interest rates, and our investments as of
March 31, 2018
.
|
•
|
Critical accounting policies.
This section discusses accounting policies considered to be important to our results of operations and financial condition, which typically require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 to the accompanying consolidated financial statements.
|
•
|
Recently issued accounting standards.
This section discusses the potential impact on our reported results of operations and financial condition of certain accounting standards that have been recently issued or proposed.
|
|
38
|
|
•
|
North America
— Our North America segment, representing approximately
52%
of our
Fiscal 2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. In North America, our wholesale business is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. Our retail business in North America is comprised of our Ralph Lauren stores, our factory stores, and our digital commerce site, www.RalphLauren.com.
|
•
|
Europe
— Our Europe segment, representing approximately
26%
of our
Fiscal 2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. In Europe, our wholesale business is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country. Our retail business in Europe is comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our various digital commerce sites.
|
•
|
Asia
— Our Asia segment, representing approximately
15%
of our
Fiscal 2018
net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses in Asia, Australia, and New Zealand. Our retail business in Asia is comprised of our Ralph Lauren stores, our factory stores, and our concession-based shop-within-shops. In addition, we sell our products through various third-party digital partner commerce sites. In Asia, our wholesale business is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
|
|
39
|
|
|
40
|
|
|
41
|
|
|
42
|
|
•
|
charges incurred in connection with our restructuring plans, as well as certain other asset impairments and other charges, as summarized below (references to "Notes" are to the notes to the accompanying consolidated financial statements):
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Impairment of assets (see Note 8)
|
|
$
|
(50.0
|
)
|
|
$
|
(253.8
|
)
|
|
$
|
(48.8
|
)
|
Restructuring and other charges (see Note 9)
|
|
(108.0
|
)
|
|
(318.6
|
)
|
|
(142.6
|
)
|
|||
Restructuring-related inventory charges (see Note 9)
(a)
|
|
(7.6
|
)
|
|
(197.9
|
)
|
|
(20.4
|
)
|
|||
Total charges
|
|
$
|
(165.6
|
)
|
|
$
|
(770.3
|
)
|
|
$
|
(211.8
|
)
|
|
(a)
|
Non-cash restructuring-related inventory charges are recorded within cost of goods sold in the consolidated statements of operations.
|
•
|
TCJA enactment-related charges of
$221.4 million
recorded within the income tax provision in the consolidated statements of operations during Fiscal 2018;
|
•
|
the reversal of an income tax reserve resulting from a change in tax law that impacted an interest assessment on a prior year withholding tax, which favorably impacted our income tax benefit by
$15.9 million
during Fiscal 2017; and
|
•
|
the inclusion of the 53rd week in Fiscal 2016, which resulted in incremental net revenues of $72.2 million and net income of $8.3 million.
|
|
43
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
$
Change
|
|
% / bps
Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
|
$
|
6,182.3
|
|
|
$
|
6,652.8
|
|
|
$
|
(470.5
|
)
|
|
(7.1
|
%)
|
Cost of goods sold
|
|
(2,430.6
|
)
|
|
(3,001.7
|
)
|
|
571.1
|
|
|
(19.0
|
%)
|
|||
Gross profit
|
|
3,751.7
|
|
|
3,651.1
|
|
|
100.6
|
|
|
2.8
|
%
|
|||
Gross profit as % of net revenues
|
|
60.7
|
%
|
|
54.9
|
%
|
|
|
|
580 bps
|
|
||||
Selling, general, and administrative expenses
|
|
(3,095.5
|
)
|
|
(3,171.0
|
)
|
|
75.5
|
|
|
(2.4
|
%)
|
|||
SG&A expenses as % of net revenues
|
|
50.1
|
%
|
|
47.7
|
%
|
|
|
|
240 bps
|
|
||||
Impairment of assets
|
|
(50.0
|
)
|
|
(253.8
|
)
|
|
203.8
|
|
|
(80.3
|
%)
|
|||
Restructuring and other charges
|
|
(108.0
|
)
|
|
(318.6
|
)
|
|
210.6
|
|
|
(66.1
|
%)
|
|||
Operating income (loss)
|
|
498.2
|
|
|
(92.3
|
)
|
|
590.5
|
|
|
NM
|
|
|||
Operating income (loss) as % of net revenues
|
|
8.1
|
%
|
|
(1.4
|
%)
|
|
|
|
950 bps
|
|
||||
Interest expense
|
|
(18.2
|
)
|
|
(12.4
|
)
|
|
(5.8
|
)
|
|
46.8
|
%
|
|||
Interest income
|
|
12.3
|
|
|
7.3
|
|
|
5.0
|
|
|
69.0
|
%
|
|||
Other expense, net
|
|
(3.1
|
)
|
|
(7.5
|
)
|
|
4.4
|
|
|
(57.9
|
%)
|
|||
Income (loss) before income taxes
|
|
489.2
|
|
|
(104.9
|
)
|
|
594.1
|
|
|
NM
|
|
|||
Income tax benefit (provision)
|
|
(326.4
|
)
|
|
5.6
|
|
|
(332.0
|
)
|
|
NM
|
|
|||
Effective tax rate
(a)
|
|
66.7
|
%
|
|
5.3
|
%
|
|
|
|
6,140 bps
|
|
||||
Net income (loss)
|
|
$
|
162.8
|
|
|
$
|
(99.3
|
)
|
|
$
|
262.1
|
|
|
NM
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
1.99
|
|
|
$
|
(1.20
|
)
|
|
$
|
3.19
|
|
|
NM
|
|
Diluted
|
|
$
|
1.97
|
|
|
$
|
(1.20
|
)
|
|
$
|
3.17
|
|
|
NM
|
|
|
(a)
|
Effective tax rate is calculated by dividing the income tax benefit (provision) by income (loss) before income taxes.
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Digital commerce comparable store sales
|
|
(15
|
%)
|
|
(16
|
%)
|
Comparable store sales excluding digital commerce
|
|
(2
|
%)
|
|
(3
|
%)
|
Total comparable store sales
|
|
(4
|
%)
|
|
(5
|
%)
|
|
44
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||
Freestanding Stores:
|
|
|
|
|
||
North America
|
|
215
|
|
|
216
|
|
Europe
|
|
81
|
|
|
82
|
|
Asia
|
|
105
|
|
|
89
|
|
Other non-reportable segments
|
|
71
|
|
|
79
|
|
Total freestanding stores
|
|
472
|
|
|
466
|
|
|
|
|
|
|
||
Concession Shops:
|
|
|
|
|
||
North America
|
|
2
|
|
|
1
|
|
Europe
|
|
25
|
|
|
31
|
|
Asia
|
|
603
|
|
|
586
|
|
Other non-reportable segments
|
|
2
|
|
|
2
|
|
Total concession shops
|
|
632
|
|
|
620
|
|
Total stores
|
|
1,104
|
|
|
1,086
|
|
|
|
Fiscal Years Ended
|
|
$ Change
|
|
Foreign Exchange Impact
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
As
Reported
|
|
|
Constant Currency
|
|
As
Reported
|
|
Constant
Currency
|
|||||||||||||
|
|
(millions)
|
|
|
|
|
||||||||||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
3,231.0
|
|
|
$
|
3,783.0
|
|
|
$
|
(552.0
|
)
|
|
$
|
3.0
|
|
|
$
|
(555.0
|
)
|
|
(14.6
|
%)
|
|
(14.7
|
%)
|
Europe
|
|
1,585.0
|
|
|
1,543.4
|
|
|
41.6
|
|
|
81.2
|
|
|
(39.6
|
)
|
|
2.7
|
%
|
|
(2.6
|
%)
|
|||||
Asia
|
|
933.7
|
|
|
882.5
|
|
|
51.2
|
|
|
1.9
|
|
|
49.3
|
|
|
5.8
|
%
|
|
5.6
|
%
|
|||||
Other non-reportable segments
|
|
432.6
|
|
|
443.9
|
|
|
(11.3
|
)
|
|
0.4
|
|
|
(11.7
|
)
|
|
(2.5
|
%)
|
|
(2.6
|
%)
|
|||||
Total net revenues
|
|
$
|
6,182.3
|
|
|
$
|
6,652.8
|
|
|
$
|
(470.5
|
)
|
|
$
|
86.5
|
|
|
$
|
(557.0
|
)
|
|
(7.1
|
%)
|
|
(8.4
|
%)
|
•
|
a $435.0 million net decrease related to our North America wholesale business, largely driven by a strategic reduction of shipments (including within the off-price channel) and points of distribution in connection with our long-term growth strategy, the impact of brand discontinuances, and the continued challenging department store traffic trends;
|
•
|
a $115.0 million net decrease in comparable store sales, primarily driven by lower sales from our Ralph Lauren digital commerce operations and certain of our retail stores due in part to a decline in traffic, as well as lower levels of promotional activity and a planned reduction in inventory in connection with our long-term growth strategy. The following table summarizes the percentage change in comparable store sales related to our North America retail business on both a reported and constant currency basis:
|
|
45
|
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Digital commerce comparable store sales
|
|
(22
|
%)
|
|
(22
|
%)
|
Comparable store sales excluding digital commerce
|
|
(3
|
%)
|
|
(3
|
%)
|
Total comparable store sales
|
|
(7
|
%)
|
|
(7
|
%)
|
•
|
a $2.0 million net decrease in non-comparable store sales.
|
•
|
a $43.5 million net increase in non-comparable store sales, primarily driven by new store openings and net favorable foreign currency effects of $10.1 million; and
|
•
|
a $15.2 million net increase related to our Europe wholesale business, largely driven by net favorable foreign currency effects of $45.1 million, partially offset by the impact of brand discontinuances and a strategic reduction of shipments within the off-price channel in connection with our long-term growth strategy.
|
•
|
a $17.1 million net decrease in comparable store sales, including net favorable foreign currency effects of $26.0 million. Our comparable store sales decreased by $43.1 million on a constant currency basis, primarily driven by lower sales from certain of our retail stores due in part to lower levels of promotional activity and a planned reduction in inventory in connection with our long-term growth strategy. The following table summarizes the percentage change in comparable store sales related to our Europe retail business on both a reported and constant currency basis:
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Digital commerce comparable store sales
|
|
4
|
%
|
|
(2
|
%)
|
Comparable store sales excluding digital commerce
|
|
(4
|
%)
|
|
(8
|
%)
|
Total comparable store sales
|
|
(3
|
%)
|
|
(7
|
%)
|
•
|
a $21.4 million net increase in non-comparable store sales, primarily driven by new store openings;
|
•
|
an $18.3 million net increase in comparable store sales, including net favorable foreign currency effects of $1.0 million. Our comparable store sales increased by $17.3 million on a constant currency basis, primarily driven by higher sales from certain of our retail locations due in part to improved conversion, partially offset by the impact of lower levels of promotional activity in connection with our long-term growth strategy. The following table summarizes the percentage change in comparable store sales related to our Asia retail business on both a reported and constant currency basis:
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Total comparable store sales
(a)
|
|
3
|
%
|
|
3
|
%
|
|
(a)
|
Comparable store sales for our Asia segment were comprised primarily of sales made through our stores and concession shops.
|
•
|
an $11.5 million net increase related to our Asia wholesale business, largely driven by our expansion in Japan.
|
|
46
|
|
|
|
Fiscal 2018
Compared to
Fiscal 2017
|
||
|
|
(millions)
|
||
SG&A expense category:
|
|
|
||
Depreciation and amortization expense
|
|
$
|
(26.1
|
)
|
Shipping and handling costs
|
|
(18.4
|
)
|
|
Compensation-related expenses
|
|
(16.4
|
)
|
|
Non-income tax related expenses
|
|
(9.4
|
)
|
|
Selling-related expenses
|
|
(8.3
|
)
|
|
Rent and occupancy expenses
|
|
(6.9
|
)
|
|
Marketing and advertising expenses
|
|
21.3
|
|
|
Other
|
|
(11.3
|
)
|
|
Total decline in SG&A expenses
|
|
$
|
(75.5
|
)
|
|
47
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
|
|
|
|||||||||||
|
Operating
Income
(Loss)
|
|
Operating
Margin
|
|
Operating
Income
(Loss)
|
|
Operating
Margin
|
|
$
Change
|
|
Margin
Change
|
|||||||
|
(millions)
|
|
|
|
(millions)
|
|
|
|
(millions)
|
|
|
|||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
677.6
|
|
|
21.0%
|
|
$
|
666.8
|
|
|
17.6%
|
|
$
|
10.8
|
|
|
340 bps
|
Europe
|
|
356.7
|
|
|
22.5%
|
|
305.2
|
|
|
19.8%
|
|
51.5
|
|
|
270 bps
|
|||
Asia
|
|
137.2
|
|
|
14.7%
|
|
(86.3
|
)
|
|
(9.8%)
|
|
223.5
|
|
|
2,450 bps
|
|||
Other non-reportable segments
|
|
107.5
|
|
|
24.9%
|
|
81.0
|
|
|
18.2%
|
|
26.5
|
|
|
670 bps
|
|||
|
|
1,279.0
|
|
|
|
|
966.7
|
|
|
|
|
312.3
|
|
|
|
|||
Unallocated corporate expenses
|
|
(672.8
|
)
|
|
|
|
(740.4
|
)
|
|
|
|
67.6
|
|
|
|
|||
Unallocated restructuring and other charges
|
|
(108.0
|
)
|
|
|
|
(318.6
|
)
|
|
|
|
210.6
|
|
|
|
|||
Total operating income (loss)
|
|
$
|
498.2
|
|
|
8.1%
|
|
$
|
(92.3
|
)
|
|
(1.4%)
|
|
$
|
590.5
|
|
|
950 bps
|
|
48
|
|
•
|
a $5.0 million increase in interest income driven by the increase in our cash, cash equivalents, and investments as compared to the prior fiscal year; and
|
•
|
a $3.4 million increase in foreign currency gains, largely related to the net favorable revaluation and settlement of foreign currency-denominated intercompany receivables and payables, inclusive of the impact of forward foreign currency exchange contracts, as compared to the prior fiscal year (foreign currency gains (losses) do not result from the translation of the operating results of our foreign subsidiaries to U.S. Dollars).
|
•
|
a $5.8 million increase in interest expense driven by the less favorable impact of our swap contracts during Fiscal 2018 as compared to the prior fiscal year. See
Note 13
to the accompanying consolidated financial statements for further discussion of our swap contracts.
|
|
49
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
|
$
Change
|
|
% / bps
Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
|
$
|
6,652.8
|
|
|
$
|
7,405.2
|
|
|
$
|
(752.4
|
)
|
|
(10.2
|
%)
|
Cost of goods sold
|
|
(3,001.7
|
)
|
|
(3,218.5
|
)
|
|
216.8
|
|
|
(6.7
|
%)
|
|||
Gross profit
|
|
3,651.1
|
|
|
4,186.7
|
|
|
(535.6
|
)
|
|
(12.8
|
%)
|
|||
Gross profit as % of net revenues
|
|
54.9
|
%
|
|
56.5
|
%
|
|
|
|
(160 bps)
|
|
||||
Selling, general, and administrative expenses
|
|
(3,171.0
|
)
|
|
(3,412.5
|
)
|
|
241.5
|
|
|
(7.1
|
%)
|
|||
SG&A expenses as % of net revenues
|
|
47.7
|
%
|
|
46.1
|
%
|
|
|
|
160 bps
|
|
||||
Impairment of assets
|
|
(253.8
|
)
|
|
(48.8
|
)
|
|
(205.0
|
)
|
|
NM
|
|
|||
Restructuring and other charges
|
|
(318.6
|
)
|
|
(142.6
|
)
|
|
(176.0
|
)
|
|
123.4
|
%
|
|||
Operating income (loss)
|
|
(92.3
|
)
|
|
582.8
|
|
|
(675.1
|
)
|
|
(115.8
|
%)
|
|||
Operating income (loss) as % of net revenues
|
|
(1.4
|
%)
|
|
7.9
|
%
|
|
|
|
(930 bps)
|
|
||||
Interest expense
|
|
(12.4
|
)
|
|
(21.0
|
)
|
|
8.6
|
|
|
(41.0
|
%)
|
|||
Interest income
|
|
7.3
|
|
|
6.3
|
|
|
1.0
|
|
|
14.9
|
%
|
|||
Other expense, net
|
|
(7.5
|
)
|
|
(16.3
|
)
|
|
8.8
|
|
|
(53.9
|
%)
|
|||
Income (loss) before income taxes
|
|
(104.9
|
)
|
|
551.8
|
|
|
(656.7
|
)
|
|
(119.0
|
%)
|
|||
Income tax benefit (provision)
|
|
5.6
|
|
|
(155.4
|
)
|
|
161.0
|
|
|
(103.6
|
%)
|
|||
Effective tax rate
(a)
|
|
5.3
|
%
|
|
28.2
|
%
|
|
|
|
(2,290 bps)
|
|
||||
Net income (loss)
|
|
$
|
(99.3
|
)
|
|
$
|
396.4
|
|
|
$
|
(495.7
|
)
|
|
(125.1
|
%)
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
(1.20
|
)
|
|
$
|
4.65
|
|
|
$
|
(5.85
|
)
|
|
(125.8
|
%)
|
Diluted
|
|
$
|
(1.20
|
)
|
|
$
|
4.62
|
|
|
$
|
(5.82
|
)
|
|
(126.0
|
%)
|
|
(a)
|
Effective tax rate is calculated by dividing the income tax benefit (provision) by income (loss) before income taxes.
|
|
50
|
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Digital commerce comparable store sales
|
|
(10
|
%)
|
|
(10
|
%)
|
Comparable store sales excluding digital commerce
|
|
(7
|
%)
|
|
(7
|
%)
|
Total comparable store sales
|
|
(7
|
%)
|
|
(7
|
%)
|
|
|
April 1,
2017 |
|
April 2,
2016 |
||
Freestanding Stores:
|
|
|
|
|
||
North America
|
|
216
|
|
|
224
|
|
Europe
|
|
82
|
|
|
87
|
|
Asia
|
|
89
|
|
|
105
|
|
Other non-reportable segments
|
|
79
|
|
|
77
|
|
Total freestanding stores
|
|
466
|
|
|
493
|
|
|
|
|
|
|
||
Concession Shops:
|
|
|
|
|
||
North America
|
|
1
|
|
|
2
|
|
Europe
|
|
31
|
|
|
34
|
|
Asia
|
|
586
|
|
|
545
|
|
Other non-reportable segments
|
|
2
|
|
|
2
|
|
Total concession shops
|
|
620
|
|
|
583
|
|
Total stores
|
|
1,086
|
|
|
1,076
|
|
|
|
Fiscal Years Ended
|
|
$ Change
|
|
Foreign Exchange Impact
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
|
As
Reported
|
|
|
Constant Currency
|
|
As
Reported
|
|
Constant
Currency
|
|||||||||||||
|
|
(millions)
|
|
|
|
|
||||||||||||||||||||
Net Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
3,783.0
|
|
|
$
|
4,479.6
|
|
|
$
|
(696.6
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(696.2
|
)
|
|
(15.6
|
%)
|
|
(15.5
|
%)
|
Europe
|
|
1,543.4
|
|
|
1,561.7
|
|
|
(18.3
|
)
|
|
(64.3
|
)
|
|
46.0
|
|
|
(1.2
|
%)
|
|
2.9
|
%
|
|||||
Asia
|
|
882.5
|
|
|
892.4
|
|
|
(9.9
|
)
|
|
43.6
|
|
|
(53.5
|
)
|
|
(1.1
|
%)
|
|
(6.0
|
%)
|
|||||
Other non-reportable segments
|
|
443.9
|
|
|
471.5
|
|
|
(27.6
|
)
|
|
(0.1
|
)
|
|
(27.5
|
)
|
|
(5.8
|
%)
|
|
(5.8
|
%)
|
|||||
Total net revenues
|
|
$
|
6,652.8
|
|
|
$
|
7,405.2
|
|
|
$
|
(752.4
|
)
|
|
$
|
(21.2
|
)
|
|
$
|
(731.2
|
)
|
|
(10.2
|
%)
|
|
(9.9
|
%)
|
|
51
|
|
•
|
a $510.3 million net decrease related to our North America wholesale business, reflecting lower sales across all of our major apparel and accessories businesses, due in part to a strategic reduction of shipments in connection with our long-term growth strategy and a decline in department store traffic, which contributed to a more competitive retail environment. This decrease also reflected the absence of the 53rd week, which resulted in incremental net revenues of $10.0 million during the prior fiscal year;
|
•
|
a $165.5 million net decrease in comparable store sales, primarily driven by lower sales from certain of our retail stores and Ralph Lauren digital commerce operations due in part to a decline in traffic. The following table summarizes our comparable store sales percentages on both a reported and constant currency basis related to our North America retail business:
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Digital commerce comparable store sales
|
|
(15
|
%)
|
|
(15
|
%)
|
Comparable store sales excluding digital commerce
|
|
(8
|
%)
|
|
(8
|
%)
|
Total comparable store sales
|
|
(10
|
%)
|
|
(10
|
%)
|
•
|
a $20.8 million net decrease in non-comparable store sales, primarily driven by the absence of the 53rd week, which resulted in incremental net revenues of $28.2 million during the prior fiscal year, partially offset by new store openings during Fiscal 2017.
|
•
|
a $57.1 million net decrease in comparable store sales, including net unfavorable foreign currency effects of $26.9 million. Our comparable store sales decreased by $30.2 million on a constant currency basis, primarily driven by lower sales from certain retail stores due in part to a decline in traffic, as well as lower levels of promotional activity in connection with our long-term growth strategy, partially offset by higher sales from our Ralph Lauren digital commerce operations. The following table summarizes our comparable store sales percentages on both a reported and constant currency basis related to our Europe retail business:
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Digital commerce comparable store sales
|
|
7
|
%
|
|
11
|
%
|
Comparable store sales excluding digital commerce
|
|
(10
|
%)
|
|
(6
|
%)
|
Total comparable store sales
|
|
(8
|
%)
|
|
(4
|
%)
|
•
|
a $25.4 million net increase related to our Europe wholesale business, reflecting increased sales across all of our major apparel and accessories businesses. This increase was net of unfavorable foreign currency effects of $23.0 million; and
|
•
|
a $13.4 million net increase in non-comparable store sales, primarily driven by new store openings during Fiscal 2017, partially offset by net unfavorable foreign currency effects of $14.4 million and the absence of the 53rd week, which resulted in incremental net revenues of $14.3 million during the prior fiscal year.
|
|
52
|
|
•
|
a $17.1 million net decrease in non-comparable store sales, primarily driven by the absence of the 53rd week, which resulted in incremental net revenues of $15.4 million during the prior fiscal year, as well as lower sales from certain of our stores and concession shops due in part to a decline in traffic, lower levels of promotional activity in connection with our long-term growth strategy, and the strategic closure of certain of our locations, partially offset by net favorable foreign currency effects of $11.1 million and new store openings during Fiscal 2017; and
|
•
|
a $5.1 million net decrease related to our Asia wholesale business, primarily driven by lower sales in Greater China and Southeast Asia, partially offset by net favorable foreign currency effects of $3.4 million.
|
•
|
a $12.3 million net increase in comparable store sales, including net favorable foreign currency effects of $29.1 million. Our comparable store sales decreased by $16.8 million on a constant currency basis, primarily driven by lower sales from certain of our stores and concession shops due in part to a decline in traffic, and lower levels of promotional activity in connection with our long-term growth strategy. The following table summarizes our comparable store sales percentage on both a reported and constant currency basis related to our Asia retail business:
|
|
|
As
Reported
|
|
Constant
Currency
|
||
Total comparable store sales
(a)
|
|
2
|
%
|
|
(3
|
%)
|
|
(a)
|
Comparable store sales for our Asia segment were comprised solely of sales made through our stores and concession shops.
|
|
|
Fiscal 2017
Compared to
Fiscal 2016
|
||
|
|
(millions)
|
||
SG&A expense category:
|
|
|
||
Compensation-related expenses
|
|
$
|
(108.8
|
)
|
Marketing and advertising expenses
|
|
(60.1
|
)
|
|
Consulting fees
|
|
(23.0
|
)
|
|
Rent and occupancy expenses
|
|
(19.3
|
)
|
|
Shipping and handling costs
|
|
(12.9
|
)
|
|
Other
|
|
(17.4
|
)
|
|
Total decline in SG&A expenses
|
|
$
|
(241.5
|
)
|
|
53
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
||||||||||||
|
April 1, 2017
|
|
April 2, 2016
|
|
|
|
|
|||||||||||
|
Operating
Income
(Loss)
|
|
Operating
Margin
|
|
Operating
Income (Loss) |
|
Operating
Margin
|
|
$
Change
|
|
Margin
Change
|
|||||||
|
(millions)
|
|
|
|
(millions)
|
|
|
|
(millions)
|
|
|
|||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
666.8
|
|
|
17.6%
|
|
$
|
941.3
|
|
|
21.0%
|
|
$
|
(274.5
|
)
|
|
(340 bps)
|
Europe
|
|
305.2
|
|
|
19.8%
|
|
281.0
|
|
|
18.0%
|
|
24.2
|
|
|
180 bps
|
|||
Asia
|
|
(86.3
|
)
|
|
(9.8%)
|
|
(1.2
|
)
|
|
(0.1%)
|
|
(85.1
|
)
|
|
(970 bps)
|
|||
Other non-reportable segments
|
|
81.0
|
|
|
18.2%
|
|
119.3
|
|
|
25.3%
|
|
(38.3
|
)
|
|
(710 bps)
|
|||
|
|
966.7
|
|
|
|
|
1,340.4
|
|
|
|
|
(373.7
|
)
|
|
|
|||
Unallocated corporate expenses
|
|
(740.4
|
)
|
|
|
|
(615.0
|
)
|
|
|
|
(125.4
|
)
|
|
|
|||
Unallocated restructuring and other charges
|
|
(318.6
|
)
|
|
|
|
(142.6
|
)
|
|
|
|
(176.0
|
)
|
|
|
|||
Total operating income (loss)
|
|
$
|
(92.3
|
)
|
|
(1.4%)
|
|
$
|
582.8
|
|
|
7.9%
|
|
$
|
(675.1
|
)
|
|
(930 bps)
|
|
54
|
|
•
|
an $8.6 million decrease in interest expense driven by the net favorable impact of our swap contracts entered into during Fiscal 2016, partially offset by the inclusion of twelve months of interest expense during Fiscal 2017 related to the 2.625% unsecured senior notes issued in August 2015, as compared to approximately seven months of interest expense during the prior year period. See
Note 13
to the accompanying consolidated financial statements for further discussion of our swap contracts;
|
•
|
a $5.7 million decrease in equity in losses of equity-method investees, primarily related to our share in losses from our joint venture, the Ralph Lauren Watch and Jewelry Company Sárl, which is accounted for under the equity method of accounting; and
|
•
|
a $4.9 million decrease in foreign currency losses, largely related to the net favorable revaluation and settlement of foreign currency-denominated intercompany receivables and payables, inclusive of the impact of forward foreign currency exchange contracts, as compared to the prior fiscal year (foreign currency gains (losses) do not result from the translation of the operating results of our foreign subsidiaries to U.S. Dollars).
|
|
55
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Cash and cash equivalents
|
|
$
|
1,304.6
|
|
|
$
|
668.3
|
|
|
$
|
636.3
|
|
Short-term investments
|
|
699.4
|
|
|
684.7
|
|
|
14.7
|
|
|||
Non-current investments
(a)
|
|
86.2
|
|
|
21.4
|
|
|
64.8
|
|
|||
Short-term debt
(b)
|
|
(10.1
|
)
|
|
—
|
|
|
(10.1
|
)
|
|||
Current portion of long-term debt
(b)
|
|
(298.1
|
)
|
|
—
|
|
|
(298.1
|
)
|
|||
Long-term debt
(b)
|
|
(288.0
|
)
|
|
(588.2
|
)
|
|
300.2
|
|
|||
Net cash and investments
(c)
|
|
$
|
1,494.0
|
|
|
$
|
786.2
|
|
|
$
|
707.8
|
|
Equity
|
|
$
|
3,457.4
|
|
|
$
|
3,299.6
|
|
|
$
|
157.8
|
|
|
(a)
|
Recorded within other non-current assets in our consolidated balance sheets.
|
(b)
|
See
Note 11
to the accompanying consolidated financial statements for discussion of the carrying values of our debt.
|
(c)
|
"Net cash and investments" is defined as cash and cash equivalents, plus short-term and non-current investments, less total debt.
|
|
|
Fiscal Years Ended
|
|
|
||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
975.1
|
|
|
$
|
952.6
|
|
|
$
|
22.5
|
|
Net cash used in investing activities
|
|
(189.1
|
)
|
|
(208.1
|
)
|
|
19.0
|
|
|||
Net cash used in financing activities
|
|
(197.5
|
)
|
|
(518.4
|
)
|
|
320.9
|
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
55.2
|
|
|
(16.4
|
)
|
|
71.6
|
|
|||
Net increase in cash, cash equivalents, and restricted cash
|
|
$
|
643.7
|
|
|
$
|
209.7
|
|
|
$
|
434.0
|
|
|
56
|
|
•
|
favorable changes in our (i) other income tax receivables and payables (excluding the impact of the one-time mandatory transition tax) and (ii) deferred income, both largely driven by the timing of cash collections and payments.
|
•
|
a less favorable change related to our inventory in Fiscal 2018 as compared to Fiscal 2017, largely driven by the timing of our inventory management initiatives and the timing of inventory receipts; and
|
•
|
unfavorable changes in our (i) accounts payable and accrued liabilities and (ii) accounts receivable, largely driven by the timing of cash payments and collections, respectively.
|
•
|
a
$122.4 million
decline in capital expenditures. During
Fiscal 2018
, we spent
$161.6 million
on capital expenditures, as compared to
$284.0 million
during
Fiscal 2017
. Our capital expenditures during
Fiscal 2018
primarily related to our global retail and department store renovations, new store openings, and the continued enhancements to our global information technology systems.
|
•
|
a
$104.9 million
increase in purchases of investments, less proceeds from sales and maturities of investments. During
Fiscal 2018
, we made net investment purchases of
$22.9 million
, as compared to receiving net proceeds from sales and maturities of investments of
$82.0 million
during
Fiscal 2017
.
|
•
|
a
$198.1 million
decline in cash used to repurchase shares of our Class A common stock. During
Fiscal 2018
,
$17.1 million
in shares of Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our long-term stock incentive plans. On a comparative basis, during
Fiscal 2017
, we used
$200.0 million
to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional
$15.2 million
in shares of Class A common stock were surrendered or withheld for taxes; and
|
•
|
a
$126.2 million
decline in cash used to repay debt, less proceeds from debt issuances. During
Fiscal 2018
, we received
$10.1 million
in borrowings under our credit facilities. During
Fiscal 2017
, we made
$90.0 million
in net repayments related to our commercial paper note issuances and repayments and repaid
$26.1 million
of borrowings previously outstanding under our credit facilities.
|
|
57
|
|
|
|
Fiscal Years Ended
|
|
|
||||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
|
$
Change |
||||||
|
|
(millions)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
952.6
|
|
|
$
|
1,016.7
|
|
|
$
|
(64.1
|
)
|
Net cash used in investing activities
|
|
(208.1
|
)
|
|
(576.3
|
)
|
|
368.2
|
|
|||
Net cash used in financing activities
|
|
(518.4
|
)
|
|
(483.0
|
)
|
|
(35.4
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
(16.4
|
)
|
|
7.2
|
|
|
(23.6
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
|
$
|
209.7
|
|
|
$
|
(35.4
|
)
|
|
$
|
245.1
|
|
•
|
a decline in our inventory levels, largely driven by our inventory management initiatives, lower sourcing costs, and the timing of inventory receipts.
|
•
|
an unfavorable change in our accounts receivable, largely driven by the timing of cash collections; and
|
•
|
an unfavorable change in our prepaid expenses and other current assets, largely driven by the timing of payments.
|
•
|
a $224.3 million increase in proceeds from sales and maturities of investments, less cash used to purchase investments. During Fiscal 2017, we received net proceeds from sales and maturities of investments of $82.0 million, as compared to making net investment purchases of $142.3 million during Fiscal 2016; and
|
•
|
a $133.7 million decline in capital expenditures. During Fiscal 2017, we spent $284.0 million on capital expenditures, as compared to $417.7 million during Fiscal 2016. Our capital expenditures during Fiscal 2017 primarily related to our global retail store openings, department store renovations, enhancements to our global information technology systems, and further development of our infrastructure.
|
•
|
a $296.8 million increase in cash used to repay debt, less proceeds from debt issuances. During Fiscal 2017, we made $90.0 million in net repayments related to our commercial paper note issuances and repayments and repaid $26.1 million of borrowings previously outstanding under our credit facilities. During Fiscal 2016, we received net proceeds of $299.4 million from the issuance of our 2.625% unsecured senior notes and $26.1 million in borrowings under our credit facilities, which were partially offset by net repayments of $144.8 million related to our commercial paper note issuances and repayments; and
|
•
|
a $28.2 million decline in proceeds from the exercise of stock options.
|
•
|
a $285.2 million decrease in cash used to repurchase shares of our Class A common stock. During Fiscal 2017, we used $200.0 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $15.2 million in shares of Class A common stock were surrendered or withheld in satisfaction of
|
|
58
|
|
|
|
March 31, 2018
|
||||||||||
Description
(a)
|
|
Total
Availability
|
|
Borrowings
Outstanding
|
|
Remaining
Availability
|
||||||
|
|
(millions)
|
||||||||||
Global Credit Facility and Commercial Paper Program
(b)
|
|
$
|
500
|
|
|
$
|
8
|
|
(c)
|
$
|
492
|
|
Pan-Asia Credit Facilities
|
|
52
|
|
|
10
|
|
|
42
|
|
|
(a)
|
As defined in
Note 11
to the accompanying consolidated financial statements.
|
(b)
|
Borrowings under the Commercial Paper Program are supported by the Global Credit Facility. Accordingly, we do not expect combined borrowings outstanding under the Commercial Paper Program and the Global Credit Facility to exceed $500 million.
|
(c)
|
Represents outstanding letters of credit for which we were contingently liable under the Global Credit Facility as of
March 31, 2018
.
|
|
59
|
|
|
60
|
|
|
|
Fiscal
2019 |
|
Fiscal
2020-2021 |
|
Fiscal
2022-2023 |
|
Fiscal
2024 and Thereafter |
|
Total
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Senior Notes
|
|
$
|
300.0
|
|
|
$
|
300.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
600.0
|
|
Interest payments on Senior Notes
|
|
11.1
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
22.9
|
|
|||||
Operating leases
|
|
343.8
|
|
|
580.7
|
|
|
419.2
|
|
|
504.5
|
|
|
1,848.2
|
|
|||||
Capital leases
|
|
29.6
|
|
|
62.4
|
|
|
58.3
|
|
|
78.5
|
|
|
228.8
|
|
|||||
Inventory purchase commitments
|
|
741.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
741.7
|
|
|||||
Mandatory transition tax payments
|
|
23.0
|
|
|
23.2
|
|
|
30.8
|
|
|
70.8
|
|
|
147.8
|
|
|||||
Other commitments
|
|
40.6
|
|
|
55.4
|
|
|
11.0
|
|
|
—
|
|
|
107.0
|
|
|||||
Total
|
|
$
|
1,489.8
|
|
|
$
|
1,033.5
|
|
|
$
|
519.3
|
|
|
$
|
653.8
|
|
|
$
|
3,696.4
|
|
•
|
Senior Notes
represent the principal amount of our outstanding 2.125% Senior Notes and 2.625% Senior Notes. Amounts do not include any fair value adjustments, call premiums, unamortized debt issuance costs, or interest payments (see below);
|
•
|
Interest payments on Senior Notes
represent the semi-annual contractual interest payments due on our 2.125% Senior Notes and 2.625% Senior Notes. Amounts do not include the impact of potential cash flows underlying our swap contracts entered into during Fiscal 2016 (see
Note 13
to the accompanying consolidated financial statements for discussion of our swap contracts);
|
•
|
Lease obligations
represent the minimum rental payments due under noncancelable leases for our real estate and operating equipment. In addition to such amounts, we are normally required to pay taxes, insurance, and certain occupancy costs relating to our leased real estate properties, which are not included in the table above. Approximately 75% of these lease obligations relate to our retail operations. Information has been presented separately for operating and capital leases;
|
•
|
Inventory purchase commitments
represent our legally-binding agreements to purchase fixed or minimum quantities of goods at determinable prices;
|
•
|
Mandatory transition tax payments
represent our tax obligation incurred in connection with the deemed repatriation of previously deferred foreign earnings pursuant to the TCJA (see
Note 10
to the accompanying consolidated financial statements for discussion of the TCJA). The expected mandatory transition tax payments have been presented net of foreign tax credits and other federal income tax activity of
$61.5 million
, which we expect to utilize to partially reduce this tax obligation; and
|
•
|
Other commitments
primarily represent our legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements; distribution-related agreements; information technology-related service agreements; and pension-related obligations.
|
|
61
|
|
|
62
|
|
•
|
Forecasted Inventory Transactions
— recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party.
|
•
|
Intercompany Royalties/Settlement of Foreign Currency Balances
— recognized within other expense, net, during the period that the hedged balance is remeasured through earnings, generally through its settlement when the related payment occurs.
|
|
63
|
|
|
64
|
|
|
65
|
|
|
66
|
|
|
67
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
|
68
|
|
Item 9B.
|
Other Information.
|
|
69
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Plan Category
|
|
Numbers of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options ($)
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a))
|
|
||||
Equity compensation plans approved by security holders
|
|
3,829,623
|
|
(1)
|
$
|
157.86
|
|
(2)
|
3,111,331
|
|
(3)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
3,829,623
|
|
|
$
|
157.86
|
|
|
3,111,331
|
|
|
|
(1)
|
Consists of 1,150,895 options to purchase shares of our Class A common stock and 2,678,728 restricted stock units that are payable solely in shares of Class A common stock (including 449,426 service-based restricted stock units that have fully vested but for which the underlying shares have not yet been delivered as of
March 31, 2018
). Does not include 19,096 outstanding restricted shares that are subject to forfeiture.
|
(2)
|
Represents the weighted average exercise price of outstanding stock options.
|
(3)
|
All of the securities remaining available for future issuance set forth in column (c) may be in the form of options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other stock-based awards under the Company's 1997 Incentive Plan and 2010 Incentive Plan (the "Plans"). An additional 19,096 outstanding shares of restricted stock granted under the Company's Plans that remain subject to forfeiture are not reflected in column (c).
|
|
70
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
Exhibit
Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
71
|
|
Exhibit
Number
|
|
Description
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
|
10.31
|
|
|
10.32
|
|
|
12.1*
|
|
|
72
|
|
Exhibit
Number
|
|
Description
|
14.1
|
|
|
14.2
|
|
|
21.1*
|
|
|
23.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
101*
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at March 31, 2018 and April 1, 2017, (ii) the Consolidated Statements of Operations for the fiscal years ended March 31, 2018, April 1, 2017, and April 2, 2016, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended March 31, 2018, April 1, 2017, and April 2, 2016, (iv) the Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2018, April 1, 2017, and April 2, 2016, (v) the Consolidated Statements of Equity for the fiscal years ended March 31, 2018, April 1, 2017, and April 2, 2016, and (vi) the Notes to the Consolidated Financial Statements.
|
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
73
|
|
|
|
RALPH LAUREN CORPORATION
|
|
|
|
|
By:
|
/
S
/ JANE HAMILTON NIELSEN
|
|
|
Jane Hamilton Nielsen
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Date: May 23, 2018
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ RALPH LAUREN
|
|
Executive Chairman, Chief Creative Officer, and Director
|
|
May 23, 2018
|
Ralph Lauren
|
|
|||
|
|
|
|
|
/
S
/ PATRICE LOUVET
|
|
President, Chief Executive Officer, and Director (Principal Executive Officer)
|
|
May 23, 2018
|
Patrice Louvet
|
|
|||
|
|
|
|
|
/
S
/ JANE HAMILTON NIELSEN
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
May 23, 2018
|
Jane Hamilton Nielsen
|
|
|||
|
|
|
|
|
/s/ DAVID LAUREN
|
|
Vice Chairman, Chief Innovation Officer, Strategic Advisor to the CEO, and Director
|
|
May 23, 2018
|
David Lauren
|
|
|||
|
|
|
|
|
/
S
/ JOHN R. ALCHIN
|
|
Director
|
|
May 23, 2018
|
John R. Alchin
|
|
|||
|
|
|
|
|
/
S
/ ARNOLD H. ARONSON
|
|
Director
|
|
May 23, 2018
|
Arnold H. Aronson
|
|
|||
|
|
|
|
|
/
S
/ FRANK A. BENNACK, JR.
|
|
Director
|
|
May 23, 2018
|
Frank A. Bennack, Jr.
|
|
|||
|
|
|
|
|
/
S
/ DR. JOYCE F. BROWN
|
|
Director
|
|
May 23, 2018
|
Dr. Joyce F. Brown
|
|
|||
|
|
|
|
|
/
S
/ JOEL L. FLEISHMAN
|
|
Director
|
|
May 23, 2018
|
Joel L. Fleishman
|
|
|||
|
|
|
|
|
/s/ MICHAEL A. GEORGE
|
|
Director
|
|
May 23, 2018
|
Michael A. George
|
|
|
74
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ HUBERT JOLY
|
|
Director
|
|
May 23, 2018
|
Hubert Joly
|
|
|||
|
|
|
|
|
/
S
/ JUDITH MCHALE
|
|
Director
|
|
May 23, 2018
|
Judith McHale
|
|
|||
|
|
|
|
|
/
S
/ ROBERT C. WRIGHT
|
|
Director
|
|
May 23, 2018
|
Robert C. Wright
|
|
|
75
|
|
|
Page
|
|
Consolidated Financial Statements:
|
|
|
Supplementary Information:
|
|
|
|
||
EX-12.1
|
|
|
EX-21.1
|
|
|
EX-23.1
|
|
|
EX-31.1
|
|
|
EX-31.2
|
|
|
EX-32.1
|
|
|
EX-32.2
|
|
|
EX-101
|
INSTANCE DOCUMENT
|
|
EX-101
|
SCHEMA DOCUMENT
|
|
EX-101
|
CALCULATION LINKBASE DOCUMENT
|
|
EX-101
|
LABELS LINKBASE DOCUMENT
|
|
EX-101
|
PRESENTATION LINKBASE DOCUMENT
|
|
EX-101
|
DEFINITION LINKBASE DOCUMENT
|
|
|
F-1
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
ASSETS
|
||||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,304.6
|
|
|
$
|
668.3
|
|
Short-term investments
|
|
699.4
|
|
|
684.7
|
|
||
Accounts receivable, net of allowances of $222.2 million and $214.4 million
|
|
421.4
|
|
|
450.2
|
|
||
Inventories
|
|
761.3
|
|
|
791.5
|
|
||
Income tax receivable
|
|
38.0
|
|
|
79.4
|
|
||
Prepaid expenses and other current assets
|
|
323.7
|
|
|
280.4
|
|
||
Total current assets
|
|
3,548.4
|
|
|
2,954.5
|
|
||
Property and equipment, net
|
|
1,186.3
|
|
|
1,316.0
|
|
||
Deferred tax assets
|
|
86.6
|
|
|
125.9
|
|
||
Goodwill
|
|
950.5
|
|
|
904.6
|
|
||
Intangible assets, net
|
|
188.0
|
|
|
219.8
|
|
||
Other non-current assets
|
|
183.5
|
|
|
131.2
|
|
||
Total assets
|
|
$
|
6,143.3
|
|
|
$
|
5,652.0
|
|
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
10.1
|
|
|
$
|
—
|
|
Current portion of long-term debt
|
|
298.1
|
|
|
—
|
|
||
Accounts payable
|
|
165.6
|
|
|
147.7
|
|
||
Income tax payable
|
|
30.0
|
|
|
29.5
|
|
||
Accrued expenses and other current liabilities
|
|
1,083.4
|
|
|
982.7
|
|
||
Total current liabilities
|
|
1,587.2
|
|
|
1,159.9
|
|
||
Long-term debt
|
|
288.0
|
|
|
588.2
|
|
||
Income tax payable
|
|
124.8
|
|
|
—
|
|
||
Non-current liability for unrecognized tax benefits
|
|
79.2
|
|
|
62.7
|
|
||
Other non-current liabilities
|
|
606.7
|
|
|
541.6
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
||||
Total liabilities
|
|
2,685.9
|
|
|
2,352.4
|
|
||
Equity:
|
|
|
|
|
||||
Class A common stock, par value $.01 per share; 102.0 million and 101.5 million shares issued; 55.4 million and 55.1 million shares outstanding
|
|
1.0
|
|
|
0.9
|
|
||
Class B common stock, par value $.01 per share; 25.9 million shares issued and outstanding
|
|
0.3
|
|
|
0.3
|
|
||
Additional paid-in-capital
|
|
2,383.4
|
|
|
2,308.8
|
|
||
Retained earnings
|
|
5,752.2
|
|
|
5,751.9
|
|
||
Treasury stock, Class A, at cost; 46.6 million and 46.4 million shares
|
|
(4,581.0
|
)
|
|
(4,563.9
|
)
|
||
Accumulated other comprehensive loss
|
|
(98.5
|
)
|
|
(198.4
|
)
|
||
Total equity
|
|
3,457.4
|
|
|
3,299.6
|
|
||
Total liabilities and equity
|
|
$
|
6,143.3
|
|
|
$
|
5,652.0
|
|
|
F-2
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions, except per share data)
|
||||||||||
Net revenues
|
|
$
|
6,182.3
|
|
|
$
|
6,652.8
|
|
|
$
|
7,405.2
|
|
Cost of goods sold
|
|
(2,430.6
|
)
|
|
(3,001.7
|
)
|
|
(3,218.5
|
)
|
|||
Gross profit
|
|
3,751.7
|
|
|
3,651.1
|
|
|
4,186.7
|
|
|||
Selling, general, and administrative expenses
|
|
(3,095.5
|
)
|
|
(3,171.0
|
)
|
|
(3,412.5
|
)
|
|||
Impairment of assets
|
|
(50.0
|
)
|
|
(253.8
|
)
|
|
(48.8
|
)
|
|||
Restructuring and other charges
|
|
(108.0
|
)
|
|
(318.6
|
)
|
|
(142.6
|
)
|
|||
Total other operating expenses, net
|
|
(3,253.5
|
)
|
|
(3,743.4
|
)
|
|
(3,603.9
|
)
|
|||
Operating income (loss)
|
|
498.2
|
|
|
(92.3
|
)
|
|
582.8
|
|
|||
Interest expense
|
|
(18.2
|
)
|
|
(12.4
|
)
|
|
(21.0
|
)
|
|||
Interest income
|
|
12.3
|
|
|
7.3
|
|
|
6.3
|
|
|||
Other expense, net
|
|
(3.1
|
)
|
|
(7.5
|
)
|
|
(16.3
|
)
|
|||
Income (loss) before income taxes
|
|
489.2
|
|
|
(104.9
|
)
|
|
551.8
|
|
|||
Income tax benefit (provision)
|
|
(326.4
|
)
|
|
5.6
|
|
|
(155.4
|
)
|
|||
Net income (loss)
|
|
$
|
162.8
|
|
|
$
|
(99.3
|
)
|
|
$
|
396.4
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.99
|
|
|
$
|
(1.20
|
)
|
|
$
|
4.65
|
|
Diluted
|
|
$
|
1.97
|
|
|
$
|
(1.20
|
)
|
|
$
|
4.62
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
81.7
|
|
|
82.7
|
|
|
85.2
|
|
|||
Diluted
|
|
82.5
|
|
|
82.7
|
|
|
85.9
|
|
|||
Dividends declared per share
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
F-3
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Net income (loss)
|
|
$
|
162.8
|
|
|
$
|
(99.3
|
)
|
|
$
|
396.4
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation gains (losses)
|
|
126.9
|
|
|
(48.6
|
)
|
|
36.4
|
|
|||
Net gains (losses) on cash flow hedges
|
|
(30.6
|
)
|
|
26.6
|
|
|
(55.2
|
)
|
|||
Net gains on defined benefit plans
|
|
3.6
|
|
|
5.1
|
|
|
2.9
|
|
|||
Other comprehensive income (loss), net of tax
|
|
99.9
|
|
|
(16.9
|
)
|
|
(15.9
|
)
|
|||
Total comprehensive income (loss)
|
|
$
|
262.7
|
|
|
$
|
(116.2
|
)
|
|
$
|
380.5
|
|
|
F-4
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
162.8
|
|
|
$
|
(99.3
|
)
|
|
$
|
396.4
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
|
295.2
|
|
|
307.5
|
|
|
309.4
|
|
|||
Deferred income tax expense (benefit)
|
|
84.1
|
|
|
(38.9
|
)
|
|
(7.9
|
)
|
|||
Equity in losses of equity-method investees
|
|
4.5
|
|
|
5.2
|
|
|
10.9
|
|
|||
Non-cash stock-based compensation expense
|
|
74.5
|
|
|
63.6
|
|
|
97.0
|
|
|||
Non-cash impairment of assets
|
|
50.0
|
|
|
253.8
|
|
|
48.8
|
|
|||
Non-cash restructuring-related inventory charges
|
|
7.6
|
|
|
197.9
|
|
|
20.4
|
|
|||
Other non-cash charges
|
|
7.4
|
|
|
29.2
|
|
|
19.7
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
34.5
|
|
|
54.1
|
|
|
129.4
|
|
|||
Inventories
|
|
57.8
|
|
|
120.4
|
|
|
(90.9
|
)
|
|||
Prepaid expenses and other current assets
|
|
(15.1
|
)
|
|
(27.8
|
)
|
|
30.2
|
|
|||
Accounts payable and accrued liabilities
|
|
64.6
|
|
|
112.9
|
|
|
90.1
|
|
|||
Income tax receivables and payables
|
|
165.1
|
|
|
(34.0
|
)
|
|
(14.6
|
)
|
|||
Deferred income
|
|
1.4
|
|
|
(20.7
|
)
|
|
(7.9
|
)
|
|||
Other balance sheet changes
|
|
(19.3
|
)
|
|
28.7
|
|
|
(14.3
|
)
|
|||
Net cash provided by operating activities
|
|
975.1
|
|
|
952.6
|
|
|
1,016.7
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(161.6
|
)
|
|
(284.0
|
)
|
|
(417.7
|
)
|
|||
Purchases of investments
|
|
(1,605.6
|
)
|
|
(860.4
|
)
|
|
(1,085.0
|
)
|
|||
Proceeds from sales and maturities of investments
|
|
1,582.7
|
|
|
942.4
|
|
|
942.7
|
|
|||
Acquisitions and ventures
|
|
(4.6
|
)
|
|
(6.1
|
)
|
|
(16.3
|
)
|
|||
Net cash used in investing activities
|
|
(189.1
|
)
|
|
(208.1
|
)
|
|
(576.3
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of short-term debt
|
|
10.1
|
|
|
3,735.2
|
|
|
4,343.9
|
|
|||
Repayments of short-term debt
|
|
—
|
|
|
(3,851.3
|
)
|
|
(4,462.6
|
)
|
|||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
—
|
|
|
299.4
|
|
|||
Payments of capital lease obligations
|
|
(28.2
|
)
|
|
(27.3
|
)
|
|
(24.3
|
)
|
|||
Payments of dividends
|
|
(162.4
|
)
|
|
(164.8
|
)
|
|
(170.3
|
)
|
|||
Repurchases of common stock, including shares surrendered for tax withholdings
|
|
(17.1
|
)
|
|
(215.2
|
)
|
|
(500.4
|
)
|
|||
Proceeds from exercise of stock options
|
|
0.1
|
|
|
5.0
|
|
|
33.2
|
|
|||
Other financing activities
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
|||
Net cash used in financing activities
|
|
(197.5
|
)
|
|
(518.4
|
)
|
|
(483.0
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
55.2
|
|
|
(16.4
|
)
|
|
7.2
|
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
|
643.7
|
|
|
209.7
|
|
|
(35.4
|
)
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
711.8
|
|
|
502.1
|
|
|
537.5
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
1,355.5
|
|
|
$
|
711.8
|
|
|
$
|
502.1
|
|
|
F-5
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||
|
|
Common Stock
(a)
|
|
Paid-in
|
|
Retained
|
|
at Cost
|
|
|
|
Total
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
AOCI
(b)
|
|
Equity
|
||||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||
Balance at March 28, 2015
|
|
125.9
|
|
|
$
|
1.2
|
|
|
$
|
2,117.1
|
|
|
$
|
5,787.2
|
|
|
39.6
|
|
|
$
|
(3,848.3
|
)
|
|
$
|
(165.6
|
)
|
|
$
|
3,891.6
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
396.4
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15.9
|
)
|
|
|
|||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
380.5
|
|
|||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(168.6
|
)
|
|
|
|
|
|
|
|
(168.6
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
|
|
|
|
|
4.4
|
|
|
(500.4
|
)
|
|
|
|
(500.4
|
)
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
97.0
|
|
|
|
|
|
|
|
|
|
|
97.0
|
|
||||||||||||
Shares issued and tax benefits recognized
pursuant to stock-based compensation plans
(c)
|
|
1.0
|
|
|
—
|
|
|
43.4
|
|
|
|
|
|
|
|
|
|
|
43.4
|
|
||||||||||
Balance at April 2, 2016
|
|
126.9
|
|
|
$
|
1.2
|
|
|
$
|
2,257.5
|
|
|
$
|
6,015.0
|
|
|
44.0
|
|
|
$
|
(4,348.7
|
)
|
|
$
|
(181.5
|
)
|
|
$
|
3,743.5
|
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
|
|
|
|
|
|
|
(99.3
|
)
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16.9
|
)
|
|
|
|||||||||||||
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(116.2
|
)
|
|||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(163.8
|
)
|
|
|
|
|
|
|
|
(163.8
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
|
|
|
|
|
2.4
|
|
|
(215.2
|
)
|
|
|
|
(215.2
|
)
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
63.6
|
|
|
|
|
|
|
|
|
|
|
63.6
|
|
||||||||||||
Shares issued and tax shortfalls recognized
pursuant to stock-based compensation plans
(c)
|
|
0.5
|
|
|
—
|
|
|
(12.3
|
)
|
|
|
|
|
|
|
|
|
|
(12.3
|
)
|
||||||||||
Balance at April 1, 2017
|
|
127.4
|
|
|
$
|
1.2
|
|
|
$
|
2,308.8
|
|
|
$
|
5,751.9
|
|
|
46.4
|
|
|
$
|
(4,563.9
|
)
|
|
$
|
(198.4
|
)
|
|
$
|
3,299.6
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
162.8
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.9
|
|
|
|
|||||||||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262.7
|
|
|||||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(162.5
|
)
|
|
|
|
|
|
|
|
(162.5
|
)
|
||||||||||||
Repurchases of common stock
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|
(17.1
|
)
|
|
|
|
(17.1
|
)
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
74.5
|
|
|
|
|
|
|
|
|
|
|
74.5
|
|
||||||||||||
Shares issued pursuant to stock-based
compensation plans
(c)
|
|
0.5
|
|
|
0.1
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
0.2
|
|
||||||||||
Balance at March 31, 2018
|
|
127.9
|
|
|
$
|
1.3
|
|
|
$
|
2,383.4
|
|
|
$
|
5,752.2
|
|
|
46.6
|
|
|
$
|
(4,581.0
|
)
|
|
$
|
(98.5
|
)
|
|
$
|
3,457.4
|
|
|
(a)
|
Includes Class A and Class B common stock.
|
(b)
|
Accumulated other comprehensive income (loss).
|
(c)
|
Includes an excess tax shortfall relating to stock-based compensation plans of
$17.3 million
in
Fiscal 2017
and an excess tax benefit of
$10.2 million
in
Fiscal 2016
. In
Fiscal 2018
, the Company adopted ASU 2016-09 (as defined in
Note 4
), which requires such excess tax benefits and shortfalls be reflected prospectively as income tax benefit (provision) in the statements of operations. See
Note 4
for further discussion of the Company's adoption of ASU 2016-09.
|
|
F-6
|
|
1.
|
Description of Business
|
2.
|
Basis of Presentation
|
|
F-7
|
|
3.
|
Summary of Significant Accounting Policies
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Shipping costs
|
|
$
|
39.1
|
|
|
$
|
42.8
|
|
|
$
|
44.6
|
|
Handling costs
|
|
155.4
|
|
|
170.1
|
|
|
181.2
|
|
|
F-8
|
|
|
F-9
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
|||
|
|
(millions)
|
|||||||
Basic shares
|
|
81.7
|
|
|
82.7
|
|
|
85.2
|
|
Dilutive effect of stock options and RSUs
|
|
0.8
|
|
|
—
|
|
(a)
|
0.7
|
|
Diluted shares
|
|
82.5
|
|
|
82.7
|
|
|
85.9
|
|
|
(a)
|
Incremental shares of
0.7 million
attributable to outstanding stock options and RSUs were excluded from the computation of diluted shares for Fiscal 2017, as such shares would not be dilutive as a result of the net loss incurred.
|
|
F-10
|
|
|
F-11
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Beginning reserve balance
|
|
$
|
202.8
|
|
|
$
|
239.7
|
|
|
$
|
239.7
|
|
Amount charged against revenue to increase reserve
|
|
585.0
|
|
|
666.6
|
|
|
749.0
|
|
|||
Amount credited against customer accounts to decrease reserve
|
|
(596.6
|
)
|
|
(698.8
|
)
|
|
(753.0
|
)
|
|||
Foreign currency translation
|
|
11.3
|
|
|
(4.7
|
)
|
|
4.0
|
|
|||
Ending reserve balance
|
|
$
|
202.5
|
|
|
$
|
202.8
|
|
|
$
|
239.7
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Beginning reserve balance
|
|
$
|
11.6
|
|
|
$
|
14.5
|
|
|
$
|
11.4
|
|
Amount recorded to expense to increase reserve
(a)
|
|
10.2
|
|
|
6.2
|
|
|
6.8
|
|
|||
Amount written-off against customer accounts to decrease reserve
|
|
(3.2
|
)
|
|
(8.5
|
)
|
|
(4.1
|
)
|
|||
Foreign currency translation
|
|
1.1
|
|
|
(0.6
|
)
|
|
0.4
|
|
|||
Ending reserve balance
|
|
$
|
19.7
|
|
|
$
|
11.6
|
|
|
$
|
14.5
|
|
|
(a)
|
Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of operations.
|
|
F-12
|
|
|
F-13
|
|
|
F-14
|
|
•
|
Forecasted Inventory Transactions
— recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party.
|
•
|
Intercompany Royalties/Settlement of Foreign Currency Balances
— recognized within other expense, net, during the period that the hedged balance is remeasured through earnings, generally through its settlement when the related payment occurs.
|
|
F-15
|
|
4.
|
Recently Issued Accounting Standards
|
|
F-16
|
|
|
F-17
|
|
5.
|
Property and Equipment
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Land and improvements
|
|
$
|
16.8
|
|
|
$
|
16.8
|
|
Buildings and improvements
|
|
460.5
|
|
|
457.2
|
|
||
Furniture and fixtures
|
|
671.0
|
|
|
687.2
|
|
||
Machinery and equipment
|
|
430.4
|
|
|
414.0
|
|
||
Capitalized software
|
|
578.4
|
|
|
549.0
|
|
||
Leasehold improvements
|
|
1,181.2
|
|
|
1,179.1
|
|
||
Construction in progress
|
|
41.5
|
|
|
33.4
|
|
||
|
|
3,379.8
|
|
|
3,336.7
|
|
||
Less: accumulated depreciation
|
|
(2,193.5
|
)
|
|
(2,020.7
|
)
|
||
Property and equipment, net
|
|
$
|
1,186.3
|
|
|
$
|
1,316.0
|
|
|
F-18
|
|
6.
|
Goodwill and Other Intangible Assets
|
|
|
Wholesale
|
|
Retail
|
|
Licensing
|
|
North America
|
|
Europe
|
|
Asia
|
|
Other Non-reportable Segments
|
|
Total
|
||||||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||
Balance at April 2, 2016
|
|
$
|
581.8
|
|
|
$
|
202.8
|
|
|
$
|
133.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
917.9
|
|
Foreign currency translation
|
|
(14.3
|
)
|
|
(2.6
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.2
|
)
|
||||||||
Balance at December 31, 2016
|
|
567.5
|
|
|
200.2
|
|
|
132.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
899.7
|
|
||||||||
Segment reallocation
(a)
|
|
(567.5
|
)
|
|
(200.2
|
)
|
|
(132.0
|
)
|
|
421.8
|
|
|
269.2
|
|
|
71.5
|
|
|
137.2
|
|
|
—
|
|
||||||||
Impairments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
(5.2
|
)
|
||||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
3.4
|
|
|
—
|
|
|
10.1
|
|
||||||||
Balance at April 1, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
421.8
|
|
|
275.9
|
|
|
74.9
|
|
|
132.0
|
|
|
904.6
|
|
||||||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42.0
|
|
|
3.9
|
|
|
—
|
|
|
45.9
|
|
||||||||
Balance at March 31, 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
421.8
|
|
|
$
|
317.9
|
|
|
$
|
78.8
|
|
|
$
|
132.0
|
|
|
$
|
950.5
|
|
|
(a)
|
In connection with the realignment of the Company's segment reporting structure, the Company reallocated the carrying amount of goodwill to its new reporting units based upon each reporting unit's relative fair value as of the first day of its fourth quarter of Fiscal 2017.
|
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||||||||||||||
|
|
Gross Carrying Amount
|
|
Accum. Amort.
|
|
Net
|
|
Gross Carrying Amount
|
|
Accum. Amort.
|
|
Net
|
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Re-acquired licensed trademarks
|
|
$
|
232.7
|
|
|
$
|
(140.0
|
)
|
|
$
|
92.7
|
|
|
$
|
231.1
|
|
|
$
|
(130.2
|
)
|
|
$
|
100.9
|
|
Customer relationships
|
|
256.5
|
|
|
(171.4
|
)
|
|
85.1
|
|
|
252.1
|
|
|
(152.9
|
)
|
|
99.2
|
|
||||||
Other
|
|
10.1
|
|
|
(7.2
|
)
|
|
2.9
|
|
|
26.9
|
|
|
(14.5
|
)
|
|
12.4
|
|
||||||
Total intangible assets subject to amortization
|
|
499.3
|
|
|
(318.6
|
)
|
|
180.7
|
|
|
510.1
|
|
|
(297.6
|
)
|
|
212.5
|
|
||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and brands
|
|
7.3
|
|
|
N/A
|
|
|
7.3
|
|
|
7.3
|
|
|
N/A
|
|
|
7.3
|
|
||||||
Total intangible assets
|
|
$
|
506.6
|
|
|
$
|
(318.6
|
)
|
|
$
|
188.0
|
|
|
$
|
517.4
|
|
|
$
|
(297.6
|
)
|
|
$
|
219.8
|
|
|
F-19
|
|
|
|
Amortization Expense
|
||
|
|
(millions)
|
||
Fiscal 2019
|
|
$
|
23.6
|
|
Fiscal 2020
|
|
22.9
|
|
|
Fiscal 2021
|
|
20.1
|
|
|
Fiscal 2022
|
|
18.1
|
|
|
Fiscal 2023
|
|
14.4
|
|
|
Fiscal 2024 and thereafter
|
|
81.6
|
|
|
Total
|
|
$
|
180.7
|
|
7.
|
Other Assets and Liabilities
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Other taxes receivable
|
|
$
|
171.4
|
|
|
$
|
127.8
|
|
Prepaid rent expense
|
|
37.0
|
|
|
37.4
|
|
||
Restricted cash
|
|
15.5
|
|
|
9.8
|
|
||
Derivative financial instruments
|
|
12.3
|
|
|
23.0
|
|
||
Prepaid samples
|
|
11.2
|
|
|
5.9
|
|
||
Prepaid software maintenance
|
|
8.7
|
|
|
6.5
|
|
||
Prepaid advertising and marketing
|
|
6.8
|
|
|
4.1
|
|
||
Tenant allowances receivable
|
|
4.3
|
|
|
16.4
|
|
||
Other prepaid expenses and current assets
|
|
56.5
|
|
|
49.5
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
323.7
|
|
|
$
|
280.4
|
|
|
F-20
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Non-current investments
|
|
$
|
86.2
|
|
|
$
|
21.4
|
|
Restricted cash
|
|
35.4
|
|
|
33.7
|
|
||
Security deposits
|
|
27.3
|
|
|
26.5
|
|
||
Derivative financial instruments
|
|
—
|
|
|
9.6
|
|
||
Other non-current assets
|
|
34.6
|
|
|
40.0
|
|
||
Total other non-current assets
|
|
$
|
183.5
|
|
|
$
|
131.2
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Accrued payroll and benefits
|
|
$
|
227.8
|
|
|
$
|
173.5
|
|
Accrued operating expenses
|
|
225.8
|
|
|
188.0
|
|
||
Other taxes payable
|
|
194.2
|
|
|
172.2
|
|
||
Accrued inventory
|
|
174.0
|
|
|
154.9
|
|
||
Restructuring reserve
|
|
69.6
|
|
|
140.8
|
|
||
Derivative financial instruments
|
|
60.8
|
|
|
12.3
|
|
||
Dividends payable
|
|
40.6
|
|
|
40.5
|
|
||
Accrued capital expenditures
|
|
37.0
|
|
|
45.7
|
|
||
Deferred income
|
|
30.4
|
|
|
29.7
|
|
||
Capital lease obligations
|
|
19.5
|
|
|
22.6
|
|
||
Other accrued expenses and current liabilities
|
|
3.7
|
|
|
2.5
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
1,083.4
|
|
|
$
|
982.7
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Capital lease obligations
|
|
$
|
236.4
|
|
|
$
|
250.9
|
|
Deferred rent obligations
|
|
212.2
|
|
|
211.1
|
|
||
Derivative financial instruments
|
|
49.2
|
|
|
9.4
|
|
||
Deferred tax liabilities
|
|
36.5
|
|
|
11.8
|
|
||
Deferred compensation
|
|
7.0
|
|
|
7.8
|
|
||
Other non-current liabilities
|
|
65.4
|
|
|
50.6
|
|
||
Total other non-current liabilities
|
|
$
|
606.7
|
|
|
$
|
541.6
|
|
|
F-21
|
|
8.
|
Impairment of Assets
|
9.
|
Restructuring and Other Charges
|
|
F-22
|
|
|
|
Fiscal Year Ended
|
|
Cumulative Charges
|
||||||||
|
|
March 31, 2018
|
|
April 1, 2017
|
|
|||||||
|
|
(millions)
|
||||||||||
Cash-related restructuring charges:
|
|
|
|
|
|
|
||||||
Severance and benefits costs
|
|
$
|
39.0
|
|
|
$
|
182.7
|
|
|
$
|
221.7
|
|
Lease termination and store closure costs
|
|
33.2
|
|
|
87.3
|
|
|
120.5
|
|
|||
Other cash charges
|
|
6.3
|
|
|
19.1
|
|
|
25.4
|
|
|||
Total cash-related restructuring charges
|
|
78.5
|
|
|
289.1
|
|
|
367.6
|
|
|||
Non-cash charges:
|
|
|
|
|
|
|
||||||
Impairment of assets (see Note 8)
|
|
16.0
|
|
|
234.6
|
|
|
250.6
|
|
|||
Inventory-related charges
(a)
|
|
7.6
|
|
|
197.9
|
|
|
205.5
|
|
|||
Accelerated stock-based compensation expense
(b)
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|||
Total non-cash charges
|
|
24.3
|
|
|
432.5
|
|
|
456.8
|
|
|||
Total charges
|
|
$
|
102.8
|
|
|
$
|
721.6
|
|
|
$
|
824.4
|
|
|
(a)
|
Includes charges of
$155.2 million
associated with the destruction of inventory out of current liquidation channels during Fiscal 2017. Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.
|
(b)
|
Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.
|
|
|
Severance and Benefits Costs
|
|
Lease Termination
and Store
Closure Costs
|
|
Other Cash Charges
|
|
Total
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at April 2, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions charged to expense
|
|
182.7
|
|
|
87.3
|
|
|
19.1
|
|
|
289.1
|
|
||||
Cash payments charged against reserve
|
|
(87.4
|
)
|
|
(52.2
|
)
|
|
(11.5
|
)
|
|
(151.1
|
)
|
||||
Non-cash adjustments
|
|
(1.0
|
)
|
|
(0.8
|
)
|
|
(1.0
|
)
|
|
(2.8
|
)
|
||||
Balance at April 1, 2017
|
|
94.3
|
|
|
34.3
|
|
|
6.6
|
|
|
135.2
|
|
||||
Additions charged to expense
|
|
39.0
|
|
|
33.2
|
|
|
6.3
|
|
|
78.5
|
|
||||
Cash payments charged against reserve
|
|
(97.9
|
)
|
|
(22.8
|
)
|
|
(11.1
|
)
|
|
(131.8
|
)
|
||||
Non-cash adjustments
|
|
2.2
|
|
|
8.8
|
|
|
—
|
|
|
11.0
|
|
||||
Balance at March 31, 2018
|
|
$
|
37.6
|
|
|
$
|
53.5
|
|
|
$
|
1.8
|
|
|
$
|
92.9
|
|
|
F-23
|
|
|
|
Fiscal Years Ended
|
|
Cumulative Charges
|
||||||||
|
|
April 1, 2017
|
|
April 2, 2016
|
|
|||||||
|
|
(millions)
|
||||||||||
Cash-related restructuring charges:
|
|
|
|
|
|
|
||||||
Severance and benefits costs
|
|
$
|
4.7
|
|
|
$
|
64.4
|
|
|
$
|
69.1
|
|
Lease termination and store closure costs
|
|
0.2
|
|
|
7.8
|
|
|
8.0
|
|
|||
Other cash charges
|
|
—
|
|
|
13.8
|
|
|
13.8
|
|
|||
Total cash-related restructuring charges
|
|
4.9
|
|
|
86.0
|
|
|
90.9
|
|
|||
Non-cash charges:
|
|
|
|
|
|
|
||||||
Impairment of assets (see Note 8)
|
|
—
|
|
|
27.2
|
|
|
27.2
|
|
|||
Inventory-related charges
(a)
|
|
—
|
|
|
20.4
|
|
|
20.4
|
|
|||
Accelerated stock-based compensation expense
(b)
|
|
—
|
|
|
8.9
|
|
|
8.9
|
|
|||
Total non-cash charges
|
|
—
|
|
|
56.5
|
|
|
56.5
|
|
|||
Total charges
|
|
$
|
4.9
|
|
|
$
|
142.5
|
|
|
$
|
147.4
|
|
|
(a)
|
Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.
|
(b)
|
Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.
|
|
|
Severance and Benefits Costs
|
|
Lease Termination and Store Closure Costs
|
|
Other Cash Charges
|
|
Total
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at March 28, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions charged to expense
|
|
64.4
|
|
|
7.8
|
|
|
13.8
|
|
|
86.0
|
|
||||
Cash payments charged against reserve
|
|
(33.2
|
)
|
|
(2.5
|
)
|
|
(10.7
|
)
|
|
(46.4
|
)
|
||||
Non-cash adjustments
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Balance at April 2, 2016
|
|
31.2
|
|
|
6.0
|
|
|
3.1
|
|
|
40.3
|
|
||||
Additions charged to expense
|
|
4.7
|
|
|
0.2
|
|
|
—
|
|
|
4.9
|
|
||||
Cash payments charged against reserve
|
|
(27.3
|
)
|
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(33.0
|
)
|
||||
Balance at April 1, 2017
|
|
8.6
|
|
|
3.4
|
|
|
0.2
|
|
|
12.2
|
|
||||
Cash payments charged against reserve
|
|
(5.5
|
)
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|
(7.6
|
)
|
||||
Balance at March 31, 2018
|
|
$
|
3.1
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
F-24
|
|
10.
|
Income Taxes
|
|
F-25
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Domestic
|
|
$
|
16.4
|
|
|
$
|
(155.3
|
)
|
|
$
|
274.8
|
|
Foreign
|
|
472.8
|
|
|
50.4
|
|
|
277.0
|
|
|||
Total income (loss) before income taxes
|
|
$
|
489.2
|
|
|
$
|
(104.9
|
)
|
|
$
|
551.8
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
(a)
|
|
$
|
(154.6
|
)
|
|
$
|
29.1
|
|
|
$
|
(87.9
|
)
|
State and local
(a)
|
|
(5.0
|
)
|
|
2.3
|
|
|
3.2
|
|
|||
Foreign
|
|
(82.7
|
)
|
|
(64.7
|
)
|
|
(78.6
|
)
|
|||
|
|
(242.3
|
)
|
|
(33.3
|
)
|
|
(163.3
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(64.1
|
)
|
|
25.1
|
|
|
4.6
|
|
|||
State and local
|
|
(12.6
|
)
|
|
2.9
|
|
|
1.4
|
|
|||
Foreign
|
|
(7.4
|
)
|
|
10.9
|
|
|
1.9
|
|
|||
|
|
(84.1
|
)
|
|
38.9
|
|
|
7.9
|
|
|||
Total income tax benefit (provision)
|
|
$
|
(326.4
|
)
|
|
$
|
5.6
|
|
|
$
|
(155.4
|
)
|
|
(a)
|
Excludes federal, state, and local tax provisions of
$17.3 million
in
Fiscal 2017
and federal, state, and local tax benefits of
$10.2 million
in
Fiscal 2016
resulting from stock-based compensation arrangements. Such amounts were recorded within equity. In
Fiscal 2018
, the Company adopted ASU 2016-09, which requires such excess tax benefits and shortfalls be reflected prospectively in the income tax benefit (provision) in the statement of operations. See
Note 4
for further discussion of the Company's adoption of ASU 2016-09.
|
|
F-26
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Benefit (provision) for income taxes at the U.S. federal statutory rate
(a)
|
|
$
|
(154.3
|
)
|
|
$
|
36.7
|
|
|
$
|
(193.2
|
)
|
Change due to:
|
|
|
|
|
|
|
||||||
State and local income taxes, net of federal benefit
|
|
(1.6
|
)
|
|
2.7
|
|
|
(10.9
|
)
|
|||
Foreign income taxed at different rates, net of U.S. foreign tax credits
|
|
74.7
|
|
|
(25.4
|
)
|
|
33.6
|
|
|||
Unrecognized tax benefits and settlements of tax examinations
|
|
(14.4
|
)
|
|
0.5
|
|
|
12.7
|
|
|||
Changes in valuation allowance on deferred tax assets
|
|
2.5
|
|
|
(7.3
|
)
|
|
—
|
|
|||
TCJA enactment-related charges
|
|
(221.4
|
)
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
|
(15.4
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
3.5
|
|
|
(1.6
|
)
|
|
2.4
|
|
|||
Total income tax benefit (provision)
|
|
$
|
(326.4
|
)
|
|
$
|
5.6
|
|
|
$
|
(155.4
|
)
|
Effective tax rate
(b)
|
|
66.7
|
%
|
|
5.3
|
%
|
|
28.2
|
%
|
|
(a)
|
The U.S. federal statutory income tax rate for the Company's Fiscal 2017 and Fiscal 2016 was
35.0%
. The TCJA reduced the statutory tax rate from
35.0%
to
21.0%
, effective January 1, 2018, and resulted in a blended statutory rate of
31.5%
for the Company's Fiscal 2018.
|
(b)
|
Effective tax rate is calculated by dividing the income tax benefit (provision) by income (loss) before income taxes.
|
|
F-27
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Goodwill and other intangible assets
|
|
$
|
(149.2
|
)
|
|
$
|
(217.1
|
)
|
Property and equipment
|
|
(36.2
|
)
|
|
(61.6
|
)
|
||
Undistributed foreign earnings
|
|
(7.1
|
)
|
|
—
|
|
||
Net operating loss carryforwards
|
|
54.8
|
|
|
64.1
|
|
||
Lease obligations
|
|
49.6
|
|
|
80.7
|
|
||
Deferred compensation
|
|
45.7
|
|
|
141.6
|
|
||
Receivable allowances and reserves
|
|
38.5
|
|
|
65.8
|
|
||
Inventory basis difference
|
|
16.0
|
|
|
21.8
|
|
||
Cumulative translation adjustment and hedges
|
|
15.0
|
|
|
(10.8
|
)
|
||
Accrued expenses
|
|
12.1
|
|
|
9.8
|
|
||
Unrecognized tax benefits
|
|
10.8
|
|
|
16.0
|
|
||
Transfer pricing
|
|
9.0
|
|
|
5.6
|
|
||
Deferred rent
|
|
6.9
|
|
|
14.3
|
|
||
Deferred income
|
|
5.2
|
|
|
9.0
|
|
||
Excess foreign tax credits
|
|
—
|
|
|
7.9
|
|
||
Other
|
|
14.4
|
|
|
5.1
|
|
||
Valuation allowance
|
|
(35.4
|
)
|
|
(38.1
|
)
|
||
Net deferred tax assets
(a)
|
|
$
|
50.1
|
|
|
$
|
114.1
|
|
|
(a)
|
The net deferred tax balances as of
March 31, 2018
and
April 1, 2017
were comprised of non-current deferred tax assets of
$86.6 million
and
$125.9 million
, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of
$36.5 million
and
$11.8 million
, respectively, recorded within other non-current liabilities in the consolidated balance sheets.
|
|
F-28
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Unrecognized tax benefits beginning balance
|
|
$
|
49.9
|
|
|
$
|
49.7
|
|
|
$
|
68.0
|
|
Additions related to current period tax positions
|
|
6.8
|
|
|
5.3
|
|
|
5.0
|
|
|||
Additions related to prior period tax positions
|
|
9.5
|
|
|
15.3
|
|
|
6.9
|
|
|||
Reductions related to prior period tax positions
|
|
(1.3
|
)
|
|
(3.4
|
)
|
|
(11.3
|
)
|
|||
Reductions related to expiration of statutes of limitations
|
|
(3.3
|
)
|
|
(4.1
|
)
|
|
(7.2
|
)
|
|||
Reductions related to settlements with taxing authorities
|
|
(0.7
|
)
|
|
(12.0
|
)
|
|
(12.0
|
)
|
|||
Additions (reductions) related to foreign currency translation
|
|
3.3
|
|
|
(0.9
|
)
|
|
0.3
|
|
|||
Unrecognized tax benefits ending balance
|
|
$
|
64.2
|
|
|
$
|
49.9
|
|
|
$
|
49.7
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Accrued interest and penalties beginning balance
|
|
$
|
12.8
|
|
|
$
|
30.9
|
|
|
$
|
47.6
|
|
Net additions charged to expense
|
|
3.8
|
|
|
2.3
|
|
|
4.0
|
|
|||
Reductions related to prior period tax positions
|
|
(1.6
|
)
|
|
(18.3
|
)
|
(a)
|
(15.4
|
)
|
|||
Reductions related to settlements with taxing authorities
|
|
(0.3
|
)
|
|
(0.8
|
)
|
|
(5.3
|
)
|
|||
Additions (reductions) related to foreign currency translation
|
|
0.3
|
|
|
(1.3
|
)
|
|
—
|
|
|||
Accrued interest and penalties ending balance
|
|
$
|
15.0
|
|
|
$
|
12.8
|
|
|
$
|
30.9
|
|
|
(a)
|
Includes a
$15.9 million
reversal of an income tax reserve resulting from a change in tax law that impacted an interest assessment on a prior year withholding tax.
|
|
F-29
|
|
11.
|
Debt
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
$300 million 2.125% Senior Notes
(a)
|
|
$
|
298.1
|
|
|
$
|
298.1
|
|
$300 million 2.625% Senior Notes
(b)
|
|
288.0
|
|
|
290.1
|
|
||
Borrowings outstanding under credit facilities
|
|
10.1
|
|
|
—
|
|
||
Total debt
|
|
596.2
|
|
|
588.2
|
|
||
Less: short-term debt and current portion of long-term debt
|
|
308.2
|
|
|
—
|
|
||
Total long-term debt
|
|
$
|
288.0
|
|
|
$
|
588.2
|
|
|
(a)
|
During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.125% Senior Notes (see
Note 13
). Accordingly, the carrying value of the 2.125% Senior Notes as of
March 31, 2018
and
April 1, 2017
reflects adjustments of
$1.6 million
and
$1.2 million
, respectively, for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.125% Senior Notes is also net of unamortized debt issuance costs and discount of
$0.3 million
and
$0.7 million
as of
March 31, 2018
and
April 1, 2017
, respectively.
|
(b)
|
During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.625% Senior Notes (see
Note 13
). Accordingly, the carrying value of the 2.625% Senior Notes as of
March 31, 2018
and
April 1, 2017
reflects adjustments of
$10.8 million
and
$8.2 million
, respectively, for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.625% Senior Notes is also net of unamortized debt issuance costs and discount of
$1.2 million
and
$1.7 million
as of
March 31, 2018
and
April 1, 2017
, respectively.
|
|
F-30
|
|
|
F-31
|
|
•
|
China Credit Facility
— provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to
50 million
Chinese Renminbi (approximately
$8 million
) through
April 3, 2019
, which is also able to be used to support bank guarantees.
|
•
|
South Korea Credit Facility
— provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to
47 billion
South Korean Won (approximately
$44 million
) through
October 31, 2018
.
|
12.
|
Fair Value Measurements
|
•
|
Level 1
— inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2
— inputs to the valuation methodology based on quoted prices for similar assets or liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable.
|
•
|
Level 3
— inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement.
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Investments in commercial paper
(a)(b)
|
|
$
|
234.2
|
|
|
$
|
—
|
|
Derivative assets
(a)
|
|
12.3
|
|
|
32.6
|
|
||
Derivative liabilities
(a)
|
|
110.0
|
|
|
21.7
|
|
|
(a)
|
Based on Level 2 measurements.
|
(b)
|
$15.0 million
included within cash and cash equivalents and
$219.2 million
included within short-term investments in the consolidated balance sheet as of
March 31, 2018
.
|
|
F-32
|
|
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||||||
|
|
Carrying Value
|
|
Fair Value
(a)
|
|
Carrying Value
|
|
Fair Value
(a)
|
||||||||
|
|
(millions)
|
||||||||||||||
$300 million 2.125% Senior Notes
|
|
$
|
298.1
|
|
(b)
|
$
|
299.4
|
|
|
$
|
298.1
|
|
(b)
|
$
|
302.2
|
|
$300 million 2.625% Senior Notes
|
|
288.0
|
|
(b)
|
298.7
|
|
|
290.1
|
|
(b)
|
302.8
|
|
||||
Borrowings outstanding under credit facilities
|
|
10.1
|
|
|
10.1
|
|
|
—
|
|
|
—
|
|
|
(a)
|
Based on Level 2 measurements.
|
(b)
|
See
Note 11
for discussion of the carrying values of the Company's Senior Notes.
|
|
F-33
|
|
13.
|
Financial Instruments
|
|
|
Notional Amounts
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||||||||
Derivative Instrument
(a)
|
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31,
2018 |
|
April 1,
2017 |
|
March 31,
2018 |
|
April 1,
2017 |
||||||||||||||||||||
|
|
|
|
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
|
Balance
Sheet
Line
(b)
|
|
Fair
Value
|
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||||||||||
Designated Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Cash flow hedges
|
|
$
|
514.5
|
|
|
$
|
533.2
|
|
|
PP
|
|
$
|
1.1
|
|
|
PP
|
|
$
|
17.7
|
|
|
(e)
|
|
$
|
13.5
|
|
|
AE
|
|
$
|
3.7
|
|
IRS — Fixed-rate debt
|
|
600.0
|
|
|
600.0
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
(f)
|
|
12.4
|
|
|
ONCL
|
|
9.4
|
|
||||||
Net investment hedges
(c)
|
|
1,081.2
|
|
|
591.2
|
|
|
PP
|
|
0.1
|
|
|
ONCA
|
|
9.6
|
|
|
(g)
|
|
82.6
|
|
|
|
|
—
|
|
||||||
Total Designated Hedges
|
|
2,195.7
|
|
|
1,724.4
|
|
|
|
|
1.2
|
|
|
|
|
27.3
|
|
|
|
|
108.5
|
|
|
|
|
13.1
|
|
||||||
Undesignated Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FC — Undesignated hedges
(d)
|
|
459.2
|
|
|
375.1
|
|
|
PP
|
|
11.1
|
|
|
PP
|
|
5.3
|
|
|
AE
|
|
1.5
|
|
|
AE
|
|
8.6
|
|
||||||
Total Hedges
|
|
$
|
2,654.9
|
|
|
$
|
2,099.5
|
|
|
|
|
$
|
12.3
|
|
|
|
|
$
|
32.6
|
|
|
|
|
$
|
110.0
|
|
|
|
|
$
|
21.7
|
|
|
(a)
|
FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts.
|
(b)
|
PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities.
|
|
F-34
|
|
(c)
|
Includes cross-currency swaps and forward foreign currency exchange contracts designated as hedges of the Company's net investment in certain foreign operations.
|
(d)
|
Primarily includes undesignated hedges of foreign currency-denominated intercompany loans and other intercompany balances.
|
(e)
|
$12.9 million
included within accrued expenses and other current liabilities and
$0.6 million
included within other non-current liabilities.
|
(f)
|
$1.6 million
included within accrued expenses and other current liabilities and
$10.8 million
included within other non-current liabilities.
|
(g)
|
$44.8 million
included within accrued expenses and other current liabilities and
$37.8 million
included within other non-current liabilities.
|
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||||||||||||||
|
|
Gross Amounts Presented in the Balance Sheet
|
|
Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements
|
|
Net
Amount |
|
Gross Amounts Presented in the Balance Sheet
|
|
Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements
|
|
Net
Amount |
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||
Derivative assets
|
|
$
|
12.3
|
|
|
$
|
(10.7
|
)
|
|
$
|
1.6
|
|
|
$
|
32.6
|
|
|
$
|
(18.3
|
)
|
|
$
|
14.3
|
|
Derivative liabilities
|
|
110.0
|
|
|
(10.7
|
)
|
|
99.3
|
|
|
21.7
|
|
|
(18.3
|
)
|
|
3.4
|
|
|
|
Gains (Losses)
Recognized in OCI |
||||||||||
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Designated Hedges:
|
|
|
|
|
|
|
||||||
FC — Cash flow hedges
|
|
$
|
(45.5
|
)
|
|
$
|
30.4
|
|
|
$
|
(20.5
|
)
|
Net investment hedges
(a)
|
|
(90.9
|
)
|
|
37.7
|
|
|
(28.4
|
)
|
|||
Total Designated Hedges
|
|
$
|
(136.4
|
)
|
|
$
|
68.1
|
|
|
$
|
(48.9
|
)
|
|
|
Gains (Losses) Reclassified
from AOCI to Earnings |
|
Location of
Gains (Losses) Reclassified from AOCI to Earnings
|
||||||||||
|
|
Fiscal Years Ended
|
|
|||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
|
|||||||
|
|
(millions)
|
|
|
||||||||||
Designated Hedges:
|
|
|
|
|
|
|
|
|
||||||
FC — Cash flow hedges
|
|
$
|
(8.2
|
)
|
|
$
|
0.5
|
|
|
$
|
43.7
|
|
|
Cost of goods sold
|
FC — Cash flow hedges
|
|
(2.9
|
)
|
|
0.5
|
|
|
(4.7
|
)
|
|
Other expense, net
|
|||
Total Designated Hedges
|
|
$
|
(11.1
|
)
|
|
$
|
1.0
|
|
|
$
|
39.0
|
|
|
|
|
(a)
|
Amounts recognized in OCI would be recognized in earnings only upon the sale or liquidation of the hedged net investment.
|
|
F-35
|
|
|
|
Gains (Losses)
Recognized in Earnings
|
|
Location of
Gains (Losses)
Recognized
in Earnings
|
||||||||||
|
|
Fiscal Years Ended
|
|
|||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
|
|||||||
|
|
(millions)
|
|
|
||||||||||
Undesignated Hedges:
|
|
|
|
|
|
|
|
|
||||||
FC — Undesignated hedges
|
|
$
|
2.4
|
|
|
$
|
(3.6
|
)
|
|
$
|
(6.6
|
)
|
|
Other expense, net
|
Total Undesignated Hedges
|
|
$
|
2.4
|
|
|
$
|
(3.6
|
)
|
|
$
|
(6.6
|
)
|
|
|
|
F-36
|
|
14.
|
Commitments and Contingencies
|
|
|
Minimum Operating
Lease Payments
(a)
|
||
|
|
(millions)
|
||
Fiscal 2019
|
|
$
|
343.8
|
|
Fiscal 2020
|
|
318.1
|
|
|
Fiscal 2021
|
|
262.6
|
|
|
Fiscal 2022
|
|
220.1
|
|
|
Fiscal 2023
|
|
199.1
|
|
|
Fiscal 2024 and thereafter
|
|
504.5
|
|
|
Total net minimum rental payments
|
|
$
|
1,848.2
|
|
|
(a)
|
Net of sublease income, which is not significant in any period.
|
|
F-37
|
|
|
|
Minimum Capital
Lease Payments
(a)(b)
|
||
|
|
(millions)
|
||
Fiscal 2019
|
|
$
|
29.6
|
|
Fiscal 2020
|
|
31.9
|
|
|
Fiscal 2021
|
|
30.5
|
|
|
Fiscal 2022
|
|
29.4
|
|
|
Fiscal 2023
|
|
28.9
|
|
|
Fiscal 2024 and thereafter
|
|
78.5
|
|
|
Total net minimum rental payments
|
|
228.8
|
|
|
Less: amount representing interest
|
|
(73.4
|
)
|
|
Present value of net minimum rental payments
|
|
$
|
155.4
|
|
|
(a)
|
Net of sublease income, which is not significant in any period.
|
(b)
|
Includes lease payments related to the Company's build-to-suit lease agreement for its former Polo store on Fifth Avenue in New York City, which was closed during the first quarter of Fiscal 2018. The total remaining commitment related to this lease was
$135.1 million
as of
March 31, 2018
, comprised of a
$41.2 million
operating lease obligation related to the land portion of the lease (included in the minimum operating lease payments table above) and a
$93.9 million
obligation related to the building portion of the lease (included in this minimum capital lease payments table).
|
|
|
Mandatory Transition
Tax Payments
(a)
|
||
|
|
(millions)
|
||
Fiscal 2019
|
|
$
|
23.0
|
|
Fiscal 2020
|
|
11.6
|
|
|
Fiscal 2021
|
|
11.6
|
|
|
Fiscal 2022
|
|
11.6
|
|
|
Fiscal 2023
|
|
19.2
|
|
|
Fiscal 2024 and thereafter
|
|
70.8
|
|
|
Total mandatory transition tax payments
|
|
$
|
147.8
|
|
|
(a)
|
Included within current and non-current income tax payable in the consolidated balance sheets based upon the estimating timing of payments.
|
|
F-38
|
|
|
F-39
|
|
15.
|
Equity
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(in millions)
|
||||||||||
Cost of shares repurchased
|
|
$
|
—
|
|
|
$
|
200.0
|
|
|
$
|
479.9
|
|
Number of shares repurchased
|
|
0.0
|
|
|
2.2
|
|
|
4.2
|
|
|
F-40
|
|
16.
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
Foreign Currency Translation Gains (Losses)
(a)
|
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
(b)
|
|
Net Unrealized Gains (Losses) on Defined Benefit Plans
(c)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance at March 28, 2015
|
|
$
|
(194.0
|
)
|
|
$
|
43.2
|
|
|
$
|
(14.8
|
)
|
|
$
|
(165.6
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
OCI before reclassifications
|
|
36.4
|
|
|
(18.8
|
)
|
|
1.4
|
|
|
19.0
|
|
||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
(36.4
|
)
|
|
1.5
|
|
|
(34.9
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
36.4
|
|
|
(55.2
|
)
|
|
2.9
|
|
|
(15.9
|
)
|
||||
Balance at April 2, 2016
|
|
(157.6
|
)
|
|
(12.0
|
)
|
|
(11.9
|
)
|
|
(181.5
|
)
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
OCI before reclassifications
|
|
(48.6
|
)
|
|
28.2
|
|
|
1.8
|
|
|
(18.6
|
)
|
||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
(1.6
|
)
|
|
3.3
|
|
|
1.7
|
|
||||
Other comprehensive income (loss), net of tax
|
|
(48.6
|
)
|
|
26.6
|
|
|
5.1
|
|
|
(16.9
|
)
|
||||
Balance at April 1, 2017
|
|
(206.2
|
)
|
|
14.6
|
|
|
(6.8
|
)
|
|
(198.4
|
)
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
OCI before reclassifications
|
|
126.9
|
|
|
(40.5
|
)
|
|
0.9
|
|
|
87.3
|
|
||||
Amounts reclassified from AOCI to earnings
|
|
—
|
|
|
9.9
|
|
|
2.7
|
|
|
12.6
|
|
||||
Other comprehensive income (loss), net of tax
|
|
126.9
|
|
|
(30.6
|
)
|
|
3.6
|
|
|
99.9
|
|
||||
Balance at March 31, 2018
|
|
$
|
(79.3
|
)
|
|
$
|
(16.0
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(98.5
|
)
|
|
(a)
|
OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes income tax benefits of
$23.3 million
and
$10.7 million
for
Fiscal 2018
and
Fiscal 2016
, respectively, and includes an income tax provision of
$15.0 million
for
Fiscal 2017
. OCI before reclassifications to earnings includes losses of
$59.6 million
(net of a
$31.3 million
income tax benefit) and
$17.4 million
(net of an
$11.0 million
income tax benefit) for
Fiscal 2018
and
Fiscal 2016
, respectively, and includes a gain of
$23.4 million
(net of a
$14.3 million
income tax provision) for
Fiscal 2017
, related to the effective portion of changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations (see
Note 13
).
|
(b)
|
OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges are presented net of income tax benefits of
$5.0 million
and
$1.7 million
for
Fiscal 2018
and
Fiscal 2016
, respectively, and are presented net of an income tax provision of
$2.2 million
for
Fiscal 2017
. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below.
|
(c)
|
Activity is presented net of taxes, which were immaterial for all periods presented.
|
|
|
Fiscal Years Ended
|
|
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
|
Location of Gains (Losses)
Reclassified from AOCI
to Earnings
|
||||||
|
|
(millions)
|
|
|
||||||||||
Gains (losses) on cash flow hedges
(a)
:
|
|
|
|
|
|
|
|
|
||||||
FC — Cash flow hedges
|
|
$
|
(8.2
|
)
|
|
$
|
0.5
|
|
|
$
|
43.7
|
|
|
Cost of goods sold
|
FC — Cash flow hedges
|
|
(2.9
|
)
|
|
0.5
|
|
|
(4.7
|
)
|
|
Other expense, net
|
|||
Tax effect
|
|
1.2
|
|
|
0.6
|
|
|
(2.6
|
)
|
|
Income tax benefit (provision)
|
|||
Net of tax
|
|
$
|
(9.9
|
)
|
|
$
|
1.6
|
|
|
$
|
36.4
|
|
|
|
|
(a)
|
FC = Forward foreign currency exchange contracts.
|
|
F-41
|
|
17.
|
Stock-based Compensation
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Compensation expense
(a)
|
|
$
|
74.5
|
|
|
$
|
63.6
|
|
|
$
|
97.0
|
|
Income tax benefit
|
|
(25.3
|
)
|
|
(22.6
|
)
|
|
(36.8
|
)
|
|
(a)
|
Fiscal 2018
,
Fiscal 2017
, and
Fiscal 2016
includes
$2.8 million
,
$4.3 million
, and
$8.9 million
, respectively, of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations (see
Note 9
). All other stock-based compensation expense was recorded within SG&A expenses.
|
|
F-42
|
|
|
|
Number of
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value
(a)
|
|||||
|
|
(thousands)
|
|
|
|
(years)
|
|
(millions)
|
|||||
Options outstanding at April 1, 2017
|
|
1,720
|
|
|
$
|
146.35
|
|
|
2.6
|
|
$
|
1.0
|
|
Granted
|
|
—
|
|
|
N/A
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
N/A
|
|
|
|
|
|
|||
Cancelled/Forfeited
|
|
(569
|
)
|
|
122.91
|
|
|
|
|
|
|||
Options outstanding at March 31, 2018
|
|
1,151
|
|
|
$
|
157.86
|
|
|
2.1
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Options vested at March 31, 2018
(b)
|
|
1,151
|
|
|
$
|
157.86
|
|
|
2.1
|
|
$
|
—
|
|
Options exercisable at March 31, 2018
|
|
1,151
|
|
|
$
|
157.86
|
|
|
2.1
|
|
$
|
—
|
|
|
(a)
|
Aggregate intrinsic value is the amount by which the market price of the Company's Class A common stock at the end of the period exceeds the exercise price of the stock option, multiplied by the number of options.
|
(b)
|
There were no nonvested stock options as of
March 31, 2018
. Accordingly, there was
no
related unrecognized compensation expense as of
March 31, 2018
.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Aggregate intrinsic value of stock options exercised
(a)
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
43.8
|
|
Cash received from the exercise of stock options
|
|
0.1
|
|
|
5.0
|
|
|
33.2
|
|
|||
Tax benefits realized on exercise of stock options
|
|
—
|
|
|
1.0
|
|
|
16.8
|
|
|
(a)
|
Aggregate intrinsic value is the amount by which the market price of the Company's Class A common stock exceeded the stock option's exercise price when exercised, multiplied by the number of options.
|
|
F-43
|
|
|
|
Restricted
Stock
|
|
Service-
based RSUs
|
||||||||||
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
||||||
|
|
(thousands)
|
|
|
|
(thousands)
|
|
|
||||||
Nonvested at April 1, 2017
|
|
19
|
|
|
$
|
92.11
|
|
|
922
|
|
|
$
|
94.31
|
|
Granted
|
|
—
|
|
|
N/A
|
|
|
701
|
|
|
73.59
|
|
||
Vested
|
|
—
|
|
|
N/A
|
|
|
(366
|
)
|
|
98.65
|
|
||
Forfeited
|
|
—
|
|
|
N/A
|
|
|
(185
|
)
|
|
83.64
|
|
||
Nonvested at March 31, 2018
|
|
19
|
|
|
$
|
92.11
|
|
|
1,072
|
|
|
$
|
81.27
|
|
|
|
Restricted
Stock
|
|
Service-
based RSUs
|
||||
Total unrecognized compensation expense at March 31, 2018 (millions)
|
|
$
|
0.4
|
|
|
$
|
26.8
|
|
Weighted-average period expected to be recognized over (years)
|
|
1.5
|
|
|
1.6
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
Restricted Stock:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
N/A
|
|
|
$
|
81.78
|
|
|
$
|
111.94
|
|
|
Total fair value of awards vested (millions)
|
|
N/A
|
|
|
$
|
0.5
|
|
|
$
|
0.7
|
|
|
Service-based RSUs:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
$
|
73.59
|
|
|
$
|
82.89
|
|
|
$
|
125.19
|
|
Total fair value of awards vested (millions)
|
|
$
|
30.0
|
|
|
$
|
13.8
|
|
|
$
|
2.1
|
|
|
F-44
|
|
|
|
Performance-based
RSUs — without TSR Modifier
|
|
Performance-based
RSUs — with TSR Modifier
|
||||||||||
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|
Number of
Shares
|
|
Weighted-Average Grant Date Fair Value
|
||||||
|
|
(thousands)
|
|
|
|
(thousands)
|
|
|
||||||
Nonvested at April 1, 2017
|
|
788
|
|
|
$
|
109.87
|
|
|
61
|
|
|
$
|
170.03
|
|
Granted
|
|
585
|
|
|
69.40
|
|
|
—
|
|
|
N/A
|
|
||
Change due to performance/market condition achievement
|
|
(12
|
)
|
|
158.76
|
|
|
(21
|
)
|
|
170.03
|
|
||
Vested
|
|
(149
|
)
|
|
142.08
|
|
|
(40
|
)
|
|
170.03
|
|
||
Forfeited
|
|
(55
|
)
|
|
90.90
|
|
|
—
|
|
|
N/A
|
|
||
Nonvested at March 31, 2018
|
|
1,157
|
|
|
$
|
85.73
|
|
|
—
|
|
|
N/A
|
|
|
|
Performance-based
RSUs — without TSR Modifier
|
|
Performance-based
RSUs — with TSR Modifier
|
||||
Total unrecognized compensation expense at March 31, 2018 (millions)
|
|
$
|
39.6
|
|
|
$
|
—
|
|
Weighted-average period expected to be recognized over (years)
|
|
1.8
|
|
|
N/A
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
Performance-based RSUs — without TSR Modifier:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
$
|
69.40
|
|
|
$
|
86.11
|
|
|
$
|
126.48
|
|
Total fair value of awards vested (millions)
|
|
$
|
10.3
|
|
|
$
|
19.7
|
|
|
$
|
38.3
|
|
Performance-based RSUs — with TSR Modifier:
|
|
|
|
|
|
|
||||||
Weighted-average grant date fair value of awards granted
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Total fair value of awards vested (millions)
|
|
$
|
2.6
|
|
|
$
|
4.7
|
|
|
$
|
6.6
|
|
|
F-45
|
|
18.
|
Employee Benefit Plans
|
|
F-46
|
|
19.
|
Segment Information
|
•
|
North America
— The North America segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. In North America, the Company's wholesale business is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. The Company's retail business in North America is comprised of its Ralph Lauren stores, its factory stores, and its digital commerce site, www.RalphLauren.com.
|
•
|
Europe
— The Europe segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. In Europe, the Company's wholesale business is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country. The Company's retail business in Europe is comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various digital commerce sites.
|
•
|
Asia
— The Asia segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses in Asia, Australia, and New Zealand. The Company's retail business in Asia is comprised of its Ralph Lauren stores, its factory stores, and its concession-based shop-within-shops. In addition, the Company sells its products online through various third-party digital partner commerce sites. In Asia, the Company's wholesale business is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Net revenues:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
3,231.0
|
|
|
$
|
3,783.0
|
|
|
$
|
4,479.6
|
|
Europe
|
|
1,585.0
|
|
|
1,543.4
|
|
|
1,561.7
|
|
|||
Asia
|
|
933.7
|
|
|
882.5
|
|
|
892.4
|
|
|||
Other non-reportable segments
|
|
432.6
|
|
|
443.9
|
|
|
471.5
|
|
|||
Total net revenues
(a)
|
|
$
|
6,182.3
|
|
|
$
|
6,652.8
|
|
|
$
|
7,405.2
|
|
|
F-47
|
|
|
(a)
|
The Company's sales to its largest wholesale customer, Macy's, accounted for approximately
8%
,
10%
, and
11%
, of its total net revenues in
Fiscal 2018
,
Fiscal 2017
, and
Fiscal 2016
, respectively. Substantially all of the Company's sales to Macy's related to its North America segment.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Operating income (loss)
(a)
:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
677.6
|
|
|
$
|
666.8
|
|
|
$
|
941.3
|
|
Europe
|
|
356.7
|
|
|
305.2
|
|
|
281.0
|
|
|||
Asia
|
|
137.2
|
|
|
(86.3
|
)
|
|
(1.2
|
)
|
|||
Other non-reportable segments
|
|
107.5
|
|
|
81.0
|
|
|
119.3
|
|
|||
|
|
1,279.0
|
|
|
966.7
|
|
|
1,340.4
|
|
|||
Unallocated corporate expenses
|
|
(672.8
|
)
|
|
(740.4
|
)
|
|
(615.0
|
)
|
|||
Unallocated restructuring and other charges
(b)
|
|
(108.0
|
)
|
|
(318.6
|
)
|
|
(142.6
|
)
|
|||
Total operating income (loss)
|
|
$
|
498.2
|
|
|
$
|
(92.3
|
)
|
|
$
|
582.8
|
|
|
(a)
|
Segment operating income (loss) and unallocated corporate expenses during the fiscal years presented included certain restructuring-related inventory charges (see
Note 9
) and asset impairment charges (see
Note 8
), which are detailed below:
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Restructuring-related inventory charges:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
(2.8
|
)
|
|
$
|
(33.9
|
)
|
|
$
|
(7.2
|
)
|
Europe
|
|
(1.5
|
)
|
|
(20.1
|
)
|
|
(2.4
|
)
|
|||
Asia
|
|
(2.9
|
)
|
|
(137.6
|
)
|
|
(10.8
|
)
|
|||
Other non-reportable segments
|
|
(0.4
|
)
|
|
(6.3
|
)
|
|
—
|
|
|||
Total restructuring-related inventory charges
|
|
$
|
(7.6
|
)
|
|
$
|
(197.9
|
)
|
|
$
|
(20.4
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Asset impairment charges:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
(4.7
|
)
|
|
$
|
(62.5
|
)
|
|
$
|
(20.5
|
)
|
Europe
|
|
(1.2
|
)
|
|
(3.1
|
)
|
|
(8.2
|
)
|
|||
Asia
|
|
(1.0
|
)
|
|
(42.0
|
)
|
|
(18.2
|
)
|
|||
Other non-reportable segments
|
|
(22.4
|
)
|
|
(29.2
|
)
|
|
(1.9
|
)
|
|||
Unallocated corporate expenses
|
|
(20.7
|
)
|
|
(117.0
|
)
|
|
—
|
|
|||
Total asset impairment charges
|
|
$
|
(50.0
|
)
|
|
$
|
(253.8
|
)
|
|
$
|
(48.8
|
)
|
|
F-48
|
|
(b)
|
The fiscal years presented included certain unallocated restructuring and other charges (see
Note 9
), which are detailed below:
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Unallocated restructuring and other charges:
|
|
|
|
|
|
|
||||||
North America-related
|
|
$
|
(15.5
|
)
|
|
$
|
(34.7
|
)
|
|
$
|
(26.1
|
)
|
Europe-related
|
|
(4.5
|
)
|
|
(27.7
|
)
|
|
(5.6
|
)
|
|||
Asia-related
|
|
2.5
|
|
|
(68.3
|
)
|
|
(3.2
|
)
|
|||
Other non-reportable segment-related
|
|
(8.5
|
)
|
|
(7.7
|
)
|
|
(5.6
|
)
|
|||
Corporate operations-related
|
|
(53.2
|
)
|
|
(155.6
|
)
|
|
(54.4
|
)
|
|||
Unallocated restructuring charges
|
|
(79.2
|
)
|
|
(294.0
|
)
|
|
(94.9
|
)
|
|||
Other charges (see Note 9)
|
|
(28.8
|
)
|
|
(24.6
|
)
|
|
(47.7
|
)
|
|||
Total unallocated restructuring and other charges
|
|
$
|
(108.0
|
)
|
|
$
|
(318.6
|
)
|
|
$
|
(142.6
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
82.5
|
|
|
$
|
110.0
|
|
|
$
|
112.4
|
|
Europe
|
|
34.8
|
|
|
31.8
|
|
|
35.2
|
|
|||
Asia
|
|
50.3
|
|
|
47.8
|
|
|
58.2
|
|
|||
Other non-reportable segments
|
|
10.7
|
|
|
14.5
|
|
|
13.7
|
|
|||
Unallocated corporate
|
|
102.8
|
|
|
103.4
|
|
|
89.9
|
|
|||
Unallocated restructuring and other charges (see Note 9)
|
|
14.1
|
|
|
—
|
|
|
—
|
|
|||
Total depreciation and amortization
|
|
$
|
295.2
|
|
|
$
|
307.5
|
|
|
$
|
309.4
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
41.9
|
|
|
$
|
62.8
|
|
|
$
|
84.9
|
|
Europe
|
|
28.5
|
|
|
43.6
|
|
|
48.2
|
|
|||
Asia
|
|
40.7
|
|
|
30.2
|
|
|
49.1
|
|
|||
Other non-reportable segments
|
|
5.3
|
|
|
20.1
|
|
|
38.0
|
|
|||
Unallocated corporate
|
|
45.2
|
|
|
127.3
|
|
|
197.5
|
|
|||
Total capital expenditures
|
|
$
|
161.6
|
|
|
$
|
284.0
|
|
|
$
|
417.7
|
|
|
F-49
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Net revenues
(a)
:
|
|
|
|
|
|
|
||||||
The Americas
(b)
|
|
$
|
3,652.1
|
|
|
$
|
4,214.7
|
|
|
$
|
4,938.2
|
|
Europe
(c)
|
|
1,595.2
|
|
|
1,554.1
|
|
|
1,572.7
|
|
|||
Asia
(d)
|
|
935.0
|
|
|
884.0
|
|
|
894.3
|
|
|||
Total net revenues
|
|
$
|
6,182.3
|
|
|
$
|
6,652.8
|
|
|
$
|
7,405.2
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Long-lived assets
(a)
:
|
|
|
|
|
||||
The Americas
(b)
|
|
$
|
915.4
|
|
|
$
|
1,061.7
|
|
Europe
(c)
|
|
154.8
|
|
|
141.8
|
|
||
Asia
(d)
|
|
116.1
|
|
|
112.5
|
|
||
Total long-lived assets
|
|
$
|
1,186.3
|
|
|
$
|
1,316.0
|
|
|
(a)
|
Net revenues and long-lived assets for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.
|
(b)
|
Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. were
$3.427 billion
,
$3.990 billion
, and
$4.688 billion
in
Fiscal 2018
,
Fiscal 2017
, and
Fiscal 2016
, respectively. Long-lived assets located in the U.S. were
$889.7 million
and
$1.033 billion
as of
March 31, 2018
and
April 1, 2017
, respectively.
|
(c)
|
Includes the Middle East.
|
(d)
|
Includes Australia and New Zealand.
|
20.
|
Additional Financial Information
|
|
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
|
(millions)
|
||||||
Cash and cash equivalents
|
|
$
|
1,304.6
|
|
|
$
|
668.3
|
|
Restricted cash included within prepaid expenses and other current assets
|
|
15.5
|
|
|
9.8
|
|
||
Restricted cash included within other non-current assets
|
|
35.4
|
|
|
33.7
|
|
||
Total cash, cash equivalents, and restricted cash
|
|
$
|
1,355.5
|
|
|
$
|
711.8
|
|
|
F-50
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||
|
|
(millions)
|
||||||||||
Cash paid for interest
|
|
$
|
11.7
|
|
|
$
|
13.0
|
|
|
$
|
15.0
|
|
Cash paid for income taxes
|
|
54.0
|
|
|
81.7
|
|
|
171.7
|
|
|
F-51
|
|
/s/ PATRICE LOUVET
|
|
/s/ JANE HAMILTON NIELSEN
|
|
Patrice Louvet
|
|
Jane Hamilton Nielsen
|
|
President and Chief Executive Officer
|
|
Chief Financial Officer
|
|
(Principal Executive Officer)
|
|
(Principal Financial and Accounting Officer)
|
|
F-52
|
|
|
F-53
|
|
|
F-54
|
|
|
|
Fiscal Years Ended
(a)(b)
|
||||||||||||||||||
|
|
March 31, 2018
(c)
|
|
April 1,
2017 |
|
April 2,
2016 |
|
March 28,
2015 |
|
March 29,
2014 (d) |
||||||||||
|
|
(millions, except per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
|
$
|
6,182.3
|
|
|
$
|
6,652.8
|
|
|
$
|
7,405.2
|
|
|
$
|
7,620.3
|
|
|
$
|
7,449.8
|
|
Gross profit
(e)
|
|
3,751.7
|
|
|
3,651.1
|
|
|
4,186.7
|
|
|
4,377.9
|
|
|
4,310.1
|
|
|||||
Impairment of assets
|
|
(50.0
|
)
|
|
(253.8
|
)
|
|
(48.8
|
)
|
|
(6.9
|
)
|
|
(1.3
|
)
|
|||||
Restructuring and other charges
|
|
(108.0
|
)
|
|
(318.6
|
)
|
|
(142.6
|
)
|
|
(10.1
|
)
|
|
(17.8
|
)
|
|||||
Operating income (loss)
|
|
498.2
|
|
|
(92.3
|
)
|
|
582.8
|
|
|
1,035.5
|
|
|
1,130.1
|
|
|||||
Interest expense, net
|
|
(5.9
|
)
|
|
(5.1
|
)
|
|
(14.7
|
)
|
|
(9.0
|
)
|
|
(14.7
|
)
|
|||||
Net income (loss)
|
|
$
|
162.8
|
|
|
$
|
(99.3
|
)
|
|
$
|
396.4
|
|
|
$
|
702.2
|
|
|
$
|
775.5
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.99
|
|
|
$
|
(1.20
|
)
|
|
$
|
4.65
|
|
|
$
|
7.96
|
|
|
$
|
8.55
|
|
Diluted
|
|
$
|
1.97
|
|
|
$
|
(1.20
|
)
|
|
$
|
4.62
|
|
|
$
|
7.88
|
|
|
$
|
8.43
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
81.7
|
|
|
82.7
|
|
|
85.2
|
|
|
88.2
|
|
|
90.7
|
|
|||||
Diluted
|
|
82.5
|
|
|
82.7
|
|
|
85.9
|
|
|
89.1
|
|
|
92.0
|
|
|||||
Dividends declared per common share
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
|
$
|
1.85
|
|
|
$
|
1.70
|
|
|
(a)
|
Fiscal 2016 consisted of 53 weeks. All other fiscal years presented consisted of 52 weeks. The inclusion of the 53rd week in Fiscal 2016 resulted in incremental net revenues of $72.2 million and net income of $8.3 million, or $0.10 per diluted share.
|
(b)
|
Reflects the Company's adoption of ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" during Fiscal 2018 on a retrospective basis, which requires that certain components of net pension expense be presented outside of operating income (see Note 4 to the accompanying consolidated financial statements).
|
(c)
|
Reflects TCJA enactment-related charges of
$221.4 million
recorded within the income tax provision (see
Note 10
to the accompanying consolidated financial statements).
|
(d)
|
Reflects the acquisition of the North American Chaps-branded men's sportswear business effective in April 2013, which resulted in the recognition of a $16.4 million gain on acquisition, as well as the acquisition of the Ralph Lauren-branded apparel and accessories business in Australia and New Zealand effective in July 2013.
|
(e)
|
Fiscal 2018, Fiscal 2017, and Fiscal 2016 reflect non-cash inventory-related charges of
$7.6 million
,
$197.9 million
, and
$20.4 million
, respectively, recorded in connection with the Company's restructuring plans (see
Note 9
to the accompanying consolidated financial statements).
|
|
F-55
|
|
|
|
March 31,
2018 |
|
April 1,
2017 |
|
April 2,
2016 |
|
March 28,
2015 |
|
March 29,
2014 |
||||||||||
|
|
(millions)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
1,304.6
|
|
|
$
|
668.3
|
|
|
$
|
456.3
|
|
|
$
|
499.7
|
|
|
$
|
797.4
|
|
Investments
|
|
785.6
|
|
|
706.1
|
|
|
816.0
|
|
|
652.2
|
|
|
490.1
|
|
|||||
Working capital
(a)
|
|
1,961.2
|
|
|
1,794.6
|
|
|
1,854.4
|
|
|
2,137.4
|
|
|
2,359.0
|
|
|||||
Total assets
|
|
6,143.3
|
|
|
5,652.0
|
|
|
6,213.1
|
|
|
6,105.8
|
|
|
6,087.7
|
|
|||||
Total debt (including current maturities of debt)
|
|
596.2
|
|
|
588.2
|
|
|
713.1
|
|
|
532.3
|
|
|
297.9
|
|
|||||
Other non-current obligations
(b)
|
|
361.2
|
|
|
250.9
|
|
|
265.7
|
|
|
237.5
|
|
|
255.0
|
|
|||||
Equity
|
|
3,457.4
|
|
|
3,299.6
|
|
|
3,743.5
|
|
|
3,891.6
|
|
|
4,034.3
|
|
|
(a)
|
Working capital is calculated as total current assets less total current liabilities (including current maturities of debt). Working capital as of March 31, 2018, April 1, 2017, and April 2, 2016 reflect the Company's adoption of ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes," which requires all deferred tax assets and liabilities, together with any related valuation allowances, to be classified as non-current on the consolidated balance sheet (past guidance required deferred tax assets and liabilities to be broken out as current and non-current on the consolidated balance sheet). Prior periods were not retrospectively adjusted.
|
(b)
|
Comprised of the Company's non-current capital lease and income tax payable obligations.
|
|
F-56
|
|
|
|
Quarterly Periods Ended
(a)(b)
|
||||||||||||||
|
|
July 1,
2017 |
|
September 30,
2017 |
|
December 30, 2017
(c)
|
|
March 31,
2018
(c)
|
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net revenues
|
|
$
|
1,347.1
|
|
|
$
|
1,664.2
|
|
|
$
|
1,641.8
|
|
|
$
|
1,529.2
|
|
Gross profit
|
|
851.2
|
|
|
995.8
|
|
|
996.2
|
|
|
908.5
|
|
||||
Net income (loss)
|
|
59.5
|
|
|
143.8
|
|
|
(81.8
|
)
|
|
41.3
|
|
||||
Net income (loss) per common share
(d)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.73
|
|
|
$
|
1.76
|
|
|
$
|
(1.00
|
)
|
|
$
|
0.51
|
|
Diluted
|
|
$
|
0.72
|
|
|
$
|
1.75
|
|
|
$
|
(1.00
|
)
|
|
$
|
0.50
|
|
Dividends declared per common share
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarterly Periods Ended
(a)(e)
|
||||||||||||||
|
|
July 2,
2016 |
|
October 1,
2016 |
|
December 31,
2016 |
|
April 1,
2017 |
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net revenues
|
|
$
|
1,552.2
|
|
|
$
|
1,820.6
|
|
|
$
|
1,714.6
|
|
|
$
|
1,565.4
|
|
Gross profit
|
|
894.6
|
|
|
954.2
|
|
|
983.2
|
|
|
819.1
|
|
||||
Net income (loss)
|
|
(22.3
|
)
|
|
45.7
|
|
|
81.3
|
|
|
(204.0
|
)
|
||||
Net income (loss) per common share
(d)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.27
|
)
|
|
$
|
0.55
|
|
|
$
|
0.98
|
|
|
$
|
(2.48
|
)
|
Diluted
|
|
$
|
(0.27
|
)
|
|
$
|
0.55
|
|
|
$
|
0.98
|
|
|
$
|
(2.48
|
)
|
Dividends declared per common share
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
(a)
|
All fiscal quarters presented consisted of 13 weeks.
|
(b)
|
Net income (loss) and net income (loss) per common share for the three-month periods ended July 1, 2017, September 30, 2017, December 30, 2017, and March 31, 2018 were negatively impacted by pretax restructuring-related charges, impairment of assets, and certain other charges of $47.2 million, $30.4 million, $27.2 million, and $60.8 million, respectively (see Notes 8 and 9 to the accompanying consolidated financial statements).
|
(c)
|
Net loss and net loss per common share for the three months ended December 30, 2017 reflected the negative impact of TCJA enactment-related charges of
$231.3 million
. During the three months ended March 31, 2018, net income and net income per common share were favorably impacted by TCJA measurement period adjustments of
$9.9 million
(see Note 10 to the accompanying consolidated financial statements).
|
(d)
|
Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average number of common shares outstanding during each period.
|
(e)
|
Net income (loss) and net income (loss) per common share for the three-month periods ended July 2, 2016, October 1, 2016, December 31, 2016, and April 1, 2017 were negatively impacted by pretax restructuring-related charges, impairment of assets, and certain other charges of $159.1 million, $149.5 million, $91.4 million, and $370.3 million, respectively (see Notes 8 and 9 to the accompanying consolidated financial statements).
|
|
F-57
|
|
|
|
Fiscal Years Ended
(a)
|
||||||||||||||||||
|
|
March 31, 2018
|
|
April 1, 2017
|
|
April 2, 2016
|
|
March 28, 2015
|
|
March 29,
2014 |
||||||||||
|
|
(millions)
|
||||||||||||||||||
Earnings, as defined:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
|
$
|
489.2
|
|
|
$
|
(104.9
|
)
|
|
$
|
551.8
|
|
|
$
|
987.4
|
|
|
$
|
1,095.8
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in losses of equity-method investees
|
|
4.5
|
|
|
5.2
|
|
|
10.9
|
|
|
11.5
|
|
|
9.4
|
|
|||||
Fixed charges
|
|
165.9
|
|
|
165.9
|
|
|
178.4
|
|
|
172.0
|
|
|
170.2
|
|
|||||
Earnings available to cover fixed charges
|
|
$
|
659.6
|
|
|
$
|
66.2
|
|
|
$
|
741.1
|
|
|
$
|
1,170.9
|
|
|
$
|
1,275.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
18.2
|
|
|
$
|
12.4
|
|
|
$
|
21.0
|
|
|
$
|
16.7
|
|
|
$
|
18.7
|
|
Interest component of rent expense
|
|
147.7
|
|
|
153.5
|
|
|
157.4
|
|
|
155.3
|
|
|
151.5
|
|
|||||
Total fixed charges
|
|
$
|
165.9
|
|
|
$
|
165.9
|
|
|
$
|
178.4
|
|
|
$
|
172.0
|
|
|
$
|
170.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
(b)
|
|
4.0
|
|
|
0.4
|
|
|
4.2
|
|
|
6.8
|
|
|
7.5
|
|
|
(a)
|
Fiscal 2016 consisted of 53 weeks. All other fiscal years presented consisted of 52 weeks.
|
(b)
|
All ratios have been calculated using unrounded numbers.
|
Entity Name
|
|
Jurisdiction of Formation
|
Acqui Polo CV
|
|
Netherlands
|
Acqui Polo GP, LLC
|
|
Delaware
|
PRL Fashions Inc.
|
|
Delaware
|
PRL International, Inc.
|
|
Delaware
|
PRL Netherlands Limited, LLC (f/k/a Acqui Polo Limited, LLC)
|
|
Delaware
|
PRL USA Holdings, Inc.
|
|
Delaware
|
PRL USA, Inc.
|
|
Delaware
|
Ralph Lauren Asia Pacific Limited (f/k/a Polo Ralph Lauren Asia Pacific, Limited)
|
|
Hong Kong
|
Ralph Lauren Europe Sàrl (f/k/a Polo Ralph Lauren Europe Sàrl)
|
|
Switzerland
|
Ralph Lauren Holding BV (f/k/a Polo Hold BV)
|
|
Netherlands
|
Ralph Lauren Retail, Inc. (f/k/a Fashions Outlet of America, Inc.)
|
|
Delaware
|
RL Acqui Polo Holding GP, LLC
|
|
Delaware
|
RL CV Holding Limited, LLC
|
|
Delaware
|
RL Finance BV (f/k/a Polo Fin BV)
|
|
Netherlands
|
The Polo/Lauren Company LP
|
|
New York
|
|
|
|
|
/s/ PATRICE LOUVET
|
|
Patrice Louvet
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
Date: May 23, 2018
|
|
|
/s/ JANE HAMILTON NIELSEN
|
|
Jane Hamilton Nielsen
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
|
Date: May 23, 2018
|
|
|
/s/ PATRICE LOUVET
|
|
Patrice Louvet
|
|
|
May 23, 2018
|
|
|
/s/ JANE HAMILTON NIELSEN
|
|
Jane Hamilton Nielsen
|
|
|
May 23, 2018
|
|