In response to continuing developments related to the
coronavirus outbreak in China, Ralph Lauren Corporation (NYSE: RL)
is following the guidance of local authorities and global health
organizations as it prioritizes the health and safety of its
employees, consumers and partners. As part of this, approximately
two thirds of the Company’s stores in the Chinese mainland have
been temporarily closed over the past week. The Company also
expects broader impact across its businesses in China and parts of
Asia due to significantly reduced travel and retail traffic.
The Company’s fourth quarter Fiscal 2020 guidance is now
estimated to be negatively impacted by $55 million to $70 million
in sales and $35 million to $45 million in operating income in
Asia, driven by current trends in China, Japan, and Korea. These
estimates could materially change if there is meaningful
deterioration from current trends. Supply chain disruptions in
China could also impact a small portion of the Company’s fourth
quarter orders globally.
“Our hearts are with the many impacted by this virus. Our number
one priority is keeping our teams, partners and consumers safe,”
said Ralph Lauren, Executive Chairman and Chief Creative
Officer.
“Our dedicated teams are operating with agility in a highly
dynamic situation, and we will continue to assess the implications
for our business across retail, corporate and our supply base,”
said Patrice Louvet, President and Chief Executive Officer. “While
the health crisis creates near-term uncertainties, the fundamentals
of our business are strong, and we continue to see significant
long-term opportunities for growth in China and across Asia.”
As the situation continues to unfold, the Company plans to
provide an update on the operational and financial impact along
with its Fiscal 2021 and first quarter guidance on its fourth
quarter Fiscal 2020 earnings call.
ABOUT RALPH LAUREN CORPORATION
Ralph Lauren Corporation (NYSE:RL) is a global leader in the
design, marketing and distribution of premium lifestyle products in
five categories: apparel, footwear & accessories, home,
fragrances and hospitality. For more than 50 years, Ralph Lauren's
reputation and distinctive image have been consistently developed
across an expanding number of products, brands and international
markets. The Company's brand names, which include Ralph Lauren,
Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph
Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children,
Chaps and Club Monaco, among others, constitute one of the world's
most widely recognized families of consumer brands. For more
information, go to https://corporate.ralphlauren.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release and oral statements made from time to time by
representatives of the Company may contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include the
statements regarding, among other things, our current expectations
about the Company's future results and financial condition,
revenues, store openings and closings, employee reductions,
margins, expenses, earnings, and citizenship and sustainability
goals and are indicated by words or phrases such as "anticipate,"
"outlook," "estimate," "expect," "project," "we believe," "can,"
"will," and similar words or phrases. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements
to be materially different from the future results, performance or
achievements expressed in or implied by such forward-looking
statements. Forward-looking statements are based largely on the
Company's expectations and judgments and are subject to a number of
risks and uncertainties, many of which are unforeseeable and beyond
our control. The factors that could cause actual results to
materially differ include, among others: 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; our ability to successfully implement our long-term
growth strategy; our ability to continue to expand and grow our
business internationally and the impact of related changes in our
customer, channel, and geographic sales mix as a result, as well as
our ability to accelerate growth in certain product categories; our
ability to open new retail stores and concession shops, as well as
enhance and expand our digital footprint and capabilities, all in
an effort to expand our direct-to-consumer presence; our ability to
respond to constantly changing fashion and retail trends and
consumer demands in a timely manner, develop products that resonate
with our existing customers and attract new customers, and execute
marketing and advertising programs that appeal to consumers; our
ability to effectively manage inventory levels and the increasing
pressure on our margins in a highly promotional retail environment;
our ability to continue to maintain our brand image and reputation
and protect our trademarks; our ability to competitively price our
products and create an acceptable value proposition for consumers;
the impact to our business resulting from changes in consumers'
ability, willingness, or preferences to purchase discretionary
items and luxury retail products, which tends to decline during
recessionary periods, and our ability to accurately forecast
consumer demand, the failure of which could result in either a
build-up or shortage of inventory; our ability to achieve
anticipated operating enhancements and cost reductions from our
restructuring plans, as well as the impact to our business
resulting from restructuring-related charges, which may be dilutive
to our earnings in the short term; 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; a variety of legal, regulatory, tax,
political, and economic risks, including risks related to the
importation and exportation of products 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; the potential impact to our
business resulting from the imposition of additional duties,
tariffs, taxes, and other charges or barriers to trade, including
those resulting from current trade developments with China and the
related impact to global stock markets, as well as our ability to
implement mitigating sourcing strategies; the impact to our
business resulting from the United Kingdom's exit from the European
Union and the uncertainty surrounding its future relationship with
the European Union, including trade agreements, as well as the
related impact to global stock markets and currency exchange rates;
the impact to our business resulting from increases in the costs of
raw materials, transportation, and labor, including wages,
healthcare, and other benefit-related costs; 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;
our efforts to successfully enhance, upgrade, and/or transition our
global information technology systems and digital commerce
platforms; changes in our tax obligations and effective tax rate
due to a variety of other factors, including potential 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; our exposure to currency
exchange rate fluctuations from both a transactional and
translational perspective; 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; the impact of economic, political, and
other conditions on us, our customers, suppliers, vendors, and
lenders, including business disruptions in Hong Kong resulting from
ongoing protests and political unrest; the potential impact to our
business if any of our distribution centers were to become
inoperable or inaccessible; the potential impact on our operations
and on our suppliers and customers resulting from man-made or
natural disasters, such as severe weather, geological events, and
epidemic diseases such as the coronavirus outbreak, and other
catastrophic events; 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; 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; 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;
our ability to maintain our credit profile and ratings within the
financial community; our intention to introduce new products or
brands, or enter into or renew alliances; changes in the business
of, and our relationships with, major department store customers
and licensing partners; our ability to achieve our goals regarding
environmental, social, and governance practices; our ability to
make certain strategic acquisitions and successfully integrate the
acquired businesses into our existing operations; and other risk
factors identified in the Company's Annual Report on Form 10-K,
Form 10-Q and Form 8-K reports filed with the Securities and
Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200213005247/en/
Ralph Lauren Investor Relations: Corinna Van der Ghinst
ir@ralphlauren.com or Corporate Communications:
rl-press@ralphlauren.com
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