A Year of Transition?

Ralph Lauren Corporation reported net income of$193 million, or $2.27 per diluted share, for the third quarter of Fiscal 2016, which excludes restructuring and other charges that are primarily related to activities associated with the Company’s global brand reorganization and a pending customs audit. This compared to reported net income of $215 million, or $2.41 per diluted share, for the third quarter of Fiscal 2015. On a reported basis, net income was $131 million or $1.54 per diluted share in the third quarter of Fiscal 2016.

“2015 was a year of transition,” said Ralph Lauren, Executive Chairman and Chief Creative Officer. “While our recent results have been disappointing, I am greatly encouraged by the changes that are already taking place since the appointment of Stefan Larsson as our new CEO. He has my full support as he conducts his comprehensive review of our business and takes the lead to move us forward. We have built one of the strongest global brands in the industry and our goal is to further strengthen the brand, drive strong financial performance and deliver shareholder value.”

“I am excited to be part of Ralph Lauren,” said Stefan Larsson, President and Chief Executive Officer. “While we are disappointed with the current business results, I was brought on board as CEO to institute change that will drive improved performance and strengthen Ralph Lauren’s position among the top luxury companies in the world. I am finalizing an extensive assessment into all aspects of the Company and working with my team to build a comprehensive strategic and financial plan to win. There is a lot of work to be done, but I am confident we will succeed.”

Net income for the third quarter of Fiscal 2016 was $193 million, or $2.27 per diluted share, excluding restructuring and other charges. This compared to reported net income of $215 million, or $2.41 per diluted share, for the third quarter of Fiscal 2015.

The Company is adjusting its Fiscal 2016 outlook. The company expects consolidated net revenues for Fiscal 2016 to be up approximately 1% in constant currency and down approximately 3% on a reported basis. This compares to previous guidance of flat on a reported basis and up 3-5% in constant currency. Based on current exchange rates, the Company continues to expect that foreign currency will have an approximate 400 basis point negative impact on Fiscal 2016 revenue growth.