Ralph Lauren Expects Q1 Net Revenue Growth to Be in Low Single-Digits

Ralph Lauren Corporation

currently expects consolidated net revenues for Fiscal 2013 to increase by a mid-single-digit percentage, reflecting the net impact of a low single-digit decline in wholesale sales and a low double-digit increase in retail sales. Strategic decisions regarding certain operations, including reduced distribution in Greater China and for American Living, combined with unfavorable foreign currency effects, are estimated to mitigate consolidated net revenue growth by approximately 400-500 basis points for the full year period. Operating margin from continuing operations for Fiscal 2013 is currently expected to be modestly above the prior year period as anticipated gross profit margin expansion is largely offset by continued investment in the Company's long-term growth initiatives and the impact of overall channel mix. The full year Fiscal 2013 tax rate is estimated at 33%. Capital expenditures are planned at approximately $360 million in Fiscal 2013. In the first quarter of Fiscal 2013, the Company expects consolidated net revenues to increase by a low single-digit percentage. Wholesale sales are expected to be flat to slightly below the prior year period, as strength in North America is offset by a decline in Europe, the continued transition of certain Japanese wholesale operations to directly operated concessions and the closure of certain wholesale operations in Greater China. Retail sales are expected to increase by a high single-digit percentage, reflecting broad-based momentum worldwide. Foreign currency effects are estimated to negatively impact net revenue growth by approximately 200-300 basis points in the first quarter. Operating margin from continuing operations for the first quarter of Fiscal 2013 is expected to be approximately 250-300 basis points below the comparable prior year period due to the timing of investments to support the Company's strategic growth objectives and the impact of overall channel mix.