Ralph Lauren Corporation Presents “Way Forward” Plan and Financial Outlook

NEW YORK–(BUSINESS WIRE)–Ralph Lauren Corporation (NYSE:RL) is today hosting a meeting for
investors and analysts to present its plan to deliver sustainable,
profitable sales growth and long-term value creation for shareholders.

As part of the Way Forward Plan, the Company will refocus on the core of
what has made Ralph Lauren the iconic company it is today and get closer
to the consumer than ever before. To do so, Ralph Lauren will evolve its
product, marketing and shopping experience to increase desirability. The
Company will evolve its operating model to enable sustainable,
profitable sales growth by significantly reducing supply chain lead
times, employing best-in-class sourcing and executing a disciplined
multi-channel distribution and expansion strategy. The Company will also
rightsize the cost structure and implement an ROI-driven financial model
to free up resources to invest in the brand and drive high-quality
sales. The new plan includes strengthening the leadership team and
creating a more nimble organization by moving from an average of 9 to 6

“We have assessed every value-creating component of the Company and,
with our Way Forward Plan, we will build on our strengths, refocusing on
our core brands and instilling a financial discipline that is highly
focused on return on investment,” said Stefan Larsson, President and
Chief Executive Officer. “We have a powerful, authentic brand with
unique elasticity, and we will bring our Company to a stronger place
than ever before by connecting our brand voice more closely to consumers
and evolving our operating model. Our multi-year growth plan will lead
Ralph Lauren – one of the few truly iconic brands in the industry – to
profitable sales growth and long-term shareholder value creation.”

Fiscal 2017 Restructuring Activities

The Company expects its Fiscal 2017 restructuring activities to result
in approximately $180-$220 million of annualized expense savings related
to its initiatives to streamline the organizational structure and
rightsize its cost structure and real estate portfolio. This is in
addition to the $125 million of annualized cost savings associated with
the Company’s Fiscal 2016 restructuring activities.

The Company expects to incur restructuring charges of up to $400 million
as a result of the Fiscal 2017 restructuring activities and up to a $150
million inventory charge associated with the reduction of inventory out
of current liquidation channels in line with the Company’s Way Forward
Plan. These charges are expected to be substantially realized by the end
of Fiscal 2017.

First Quarter and Full Year Fiscal 2017 Outlook

In the first quarter of Fiscal 2017, the Company expects consolidated
net revenues to decline at a mid-single digit rate. Operating margin for
the first quarter of Fiscal 2017 is expected to be approximately 110-160
basis points below the comparable prior year period. The first quarter
tax rate is estimated to be approximately 29%.

The Company currently expects consolidated net revenues for Fiscal 2017
to decrease at a low-double digit rate due to a proactive pullback in
inventory receipts, store closures, pricing harmonization and other
quality of sale initiatives, combined with the weak retail traffic
environment in the U.S. Operating margin for Fiscal 2017 is currently
anticipated to be approximately 10%, as cost savings are expected to be
offset by growth in new store expenses, unfavorable foreign currency
impacts, infrastructure investments and fixed expense deleveraging. The
Fiscal 2017 tax rate is estimated to be approximately 29%. Capital
expenditures are expected to be approximately $375 million in Fiscal
2017. This guidance assumes approximately $200 million in share

Q1 2017 and Fiscal 2017 guidance excludes the restructuring and
inventory charges associated with the Fiscal 2017 restructuring

Long-Term Financial Outlook

As a result of its Way Forward Plan, the Company expects to stabilize
performance in Fiscal 2018 and pivot to growth off of a smaller, more
profitable base in Fiscal 2019, with improving operating margins in both
fiscal years.

In Fiscal 2020, the Company is targeting market share growth and a
mid-teens operating margin.

Investor Day Webcast

Today’s investor meeting will be webcast live on the Company’s investor
relations website at http://investor.ralphlauren.com
from approximately 8:30 A.M. to 12:30 P.M. Eastern, and will be archived
on the website for a year after the event.


Ralph Lauren Corporation (NYSE: RL) is a global leader in the design,
marketing and distribution of premium lifestyle products in four
categories: apparel, home, accessories and fragrances. For more than 49
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 Purple Label, Ralph Lauren Collection, Double RL, Ralph
Lauren Black Label, Polo Ralph Lauren, Polo Sport, Polo Ralph Lauren
Children’s, Ralph Lauren Home, Lauren Ralph Lauren, RLX, Denim & Supply
Ralph Lauren, American Living, Chaps and Club Monaco, constitute one of
the world’s most widely recognized families of consumer brands. For more
information, go to http://investor.ralphlauren.com.


This press release and oral statements made from time to time by
representatives of the Company contain certain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include the statements
under “First Quarter and Full Year Fiscal 2017 Outlook” and “Long-Term
Financial Outlook,” and statements regarding, among other things, our
current expectations about the Company’s “Way Forward Plan,” future
results and financial condition, revenues, store openings and closings,
employee reductions, margins, expenses, timing of actions, anticipated
savings, and earnings and are indicated by words or phrases such as
“anticipate,” “estimate,” “expect,” “project,” “we believe” 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 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 achieve anticipated
operating enhancements and/or cost reductions from our restructuring
plans, which could include the potential sale, discontinuance, or
consolidation of certain of our brands; our ability to successfully
implement our anticipated growth strategies and to capitalize on our
repositioning initiatives in certain brands, regions and merchandise
categories; our ability to secure the technology facilities and systems
used by the Company and those of third party service providers from,
among other things, cybersecurity breaches, acts of vandalism, computer
viruses or similar events; our exposure to currency exchange rate
fluctuations from both a transactional and translational perspective,
and risks associated with increases in the costs of raw materials,
transportation, and labor; our ability to continue to maintain our brand
image and reputation and protect our trademarks; the impact of the
volatile state of the global economy, stock markets, and other economic
conditions on us, our customers, our suppliers, and our vendors, and our
ability and their ability to access sources of liquidity; the impact of
changes in consumers’ ability or preferences to purchase premium
lifestyle products that we sell and our ability to forecast consumer
demand; changes in the competitive marketplace, including the
introduction of new products or pricing changes by our competitors, and
consolidations, liquidations, restructurings, and other ownership
changes in the retail industry; risks associated with our international
operations, including risks related to the importation and exportation
of products, and risks associated with 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; the impact
to our business of events of unrest and instability that are currently
taking place in certain parts of the world; our ability to continue to
expand our business internationally; changes in our effective tax rates
or credit profile and ratings within the financial community; changes in
the business of, and our relationships with, major department store
customers and licensing partners; our efforts to improve the efficiency
of our distribution system and enhance our information technology
systems and global e-commerce platform; our intention to introduce new
products or enter into or renew alliances and exclusive relationships;
our ability to access sources of liquidity to provide for our cash
needs, including our debt obligations, payment of dividends, capital
expenditures, and potential repurchases of our Class A common stock; our
ability to open new retail stores, concession shops, and e-commerce
sites in an effort to expand our direct-to-consumer presence; our
ability to make certain strategic acquisitions and successfully
integrate the acquired businesses into our existing operations; the
impact to our business resulting from potential costs and obligations
related to the early termination of our long term, non-cancellable
leases; the potential impact to the trading prices of our securities if
our Class A Common Stock share repurchase activity and/or cash dividend
rate differs from investors’ expectations; our ability to maintain our
credit profile and ratings within the financial community; the potential
impact on our operations and on our customers resulting from natural or
man-made disasters; 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.


Ralph Lauren Corporation
Investor Relations:
Evren Kopelman,
Corporate Communications:
Ryan Lally,