Dailystocks.com - Ticker-based level links to all the information for the Stocks you own. Portal for Daytrading and Finance and Investing Web Sites
DailyStocks.com
What's New
Site Map
Help
FAQ
Log In
Home Quotes/Data/Chart Warren Buffett Fund Letters Ticker-based Links Education/Tips Insider Buying Index Quotes Forums Finance Site Directory
OTCBB Investors Daily Glossary News/Edtrl Company Overviews PowerRatings China Stocks Buy/Sell Indicators Company Profiles About Us
Nanotech List Videos Magic Formula Value Investing Daytrading/TA Analysis Activist Stocks Wi-fi List FOREX Quote ETF Quotes Commodities
Make DailyStocks Your Home Page AAII Ranked this System #1 Since 1998 Bookmark and Share


Welcome!
Welcome to the investing community at DailyStocks where we believe we have some of the most intelligent investors around. While we have had an online presence since 1997 as a portal, we are just beginning the forums section now. Our moderators are serious investors with MBA and CFAs with practical experience wwell-versed in fundamental, value, or technical investing. We look forward to your contribution to this community.

Recent Topics
Article by DailyStocks_admin    (11-10-08 04:56 AM)

The Daily Magic Formula Stock for 11/09/2008 is Polo Ralph Lauren Corp. According to the Magic Formula Investing Web Site, the ebit yield is 16% and the EBIT ROIC is 50-75 %.

Dailystocks.com only deals with facts, not biased journalism. What is a better way than to go to the SEC Filings? It's not exciting reading, but it makes you money. We cut and paste the important information from SEC filings for you to get started on your research on a specific company.


Dailystocks.com makes NO RECOMMENDATIONS whatsoever, and provides this for informational purpose only.

BUSINESS OVERVIEW

General

Polo Ralph Lauren Corporation, founded in 1967 by Ralph Lauren, is a global leader in the design, marketing and distribution of premium lifestyle products, including men’s, women’s and children’s apparel, accessories, fragrances and home furnishings. We believe that our global reach, breadth of product and multi-channel distribution is unique among luxury and apparel companies. We operate in three distinct but integrated segments: Wholesale, Retail and Licensing. During the past several years, we have continued to develop our business model, expand our vertically integrated Retail segment, reposition our Wholesale segment, and maintain a strong Licensing segment despite the strategic acquisition of several of our key licensed businesses.

Over the past five fiscal years, our sales have grown to $4.880 billion in Fiscal 2008 from $2.650 billion in Fiscal 2004. This growth has been largely a result of both our acquisitions and organic growth. We have diversified our business by channels of distribution, price point and target consumer, as well as by geography. Our global reach is one of the broadest in the apparel industry, with merchandise available at approximately 10,800 different retail locations worldwide. In addition to our wholesale distribution, we sell directly to customers throughout the world via 313 full-price and factory retail stores and our e-commerce website, RalphLauren.com.

We continue to invest in our business. In the past five fiscal years, we have invested approximately $1.9 billion for the acquisition of several key licensed businesses and capital improvements, primarily through strong operating cash flow. In addition, during Fiscal 2008 we launched American Living , a new lifestyle brand created exclusively in the U.S. for distribution by J.C. Penney Company, Inc. (“JCPenney”). We intend to continue to execute our long-term strategy of expanding our accessories and other product offerings, growing our specialty retail store base, and expanding our presence internationally. See Item 7 — “Overview — Our Objectives and Risks” for further discussion of the Company’s long-term strategy.

We have been controlled by the Lauren family since the founding of our Company. As of March 29, 2008, Mr. Ralph Lauren, or entities controlled by Mr. Ralph Lauren, owned approximately 87% of the voting power of the outstanding common stock of the Company.

Seasonality of Business

Our business is affected by seasonal trends, with greater Wholesale segment sales in our second and fourth quarters and greater Retail segment sales in our second and third quarters. These trends result primarily from the timing of seasonal wholesale shipments and key vacation travel, back-to-school and holiday shopping periods in the Retail segment. As a result of the growth in our retail operations and other changes in our business, historical quarterly operating trends and working capital requirements may not be indicative of future performances. In addition, fluctuations in sales and operating income in any fiscal quarter may be affected by, among other things, the timing of seasonal wholesale shipments and other events affecting retail sales.

Working capital requirements vary throughout the year. Working capital increases during the first half of the fiscal year as inventory builds to support peak shipping periods and, accordingly, decreases during the second half of the fiscal year as inventory is shipped. Cash provided by operating activities is typically higher in the second half of the fiscal year due to higher net income and reduced working capital requirements during that period.

Recent Developments

Japanese Business Acquisitions

On May 29, 2007, the Company completed its previously announced transactions to acquire control of certain of its Japanese businesses that were formerly conducted under licensed arrangements, consistent with the Company’s long-term strategy of international expansion. In particular, the Company acquired approximately 77% of the outstanding shares of Impact 21 Co., Ltd. (“Impact 21”) that it did not previously own in a cash tender offer (the “Impact 21 Acquisition”), thereby increasing its ownership in Impact 21 from approximately 20% to

approximately 97%. Impact 21 conducts the Company’s men’s, women’s and jeans apparel and accessories business in Japan under a pre-existing, sub-license arrangement. In addition, the Company acquired the remaining 50% interest in Polo Ralph Lauren Japan Corporation (“PRL Japan”), which holds the master license to conduct Polo’s business in Japan, from Onward Kashiyama and Seibu (the “PRL Japan Minority Interest Acquisition”). Collectively, the Impact 21 Acquisition and the PRL Japan Minority Interest Acquisition are herein referred to as the “Japanese Business Acquisitions.”

The purchase price initially paid in connection with the Japanese Business Acquisitions was approximately $360 million, including transaction costs of approximately $12 million. In January 2008, at an Impact 21 shareholders meeting, the Company obtained the necessary approvals to complete the process of acquiring the remaining approximately 3% of outstanding shares not exchanged as of the close of the tender offer period (the “minority squeeze-out”). In February 2008, the Company acquired approximately 1% of the remaining Impact 21 shares outstanding at an aggregate cost of $5 million. The Company expects the minority squeeze-out to be successfully concluded in the first quarter of Fiscal 2009, at an estimated aggregate cost of $9 million.

The Company funded the Japanese Business Acquisitions with available cash on-hand and ¥20.5 billion of borrowings under a one-year term loan agreement pursuant to an amendment and restatement to the Company’s existing credit facility. The Company repaid the borrowing by its maturity date on May 22, 2008 using approximately $200 million of Impact 21’s cash on-hand acquired as part of the acquisition.

The results of operations for Impact 21, which were previously accounted for using the equity method of accounting, have been consolidated in the Company’s results of operations commencing April 1, 2007. Accordingly, the Company recorded within minority interest expense the amount of Impact 21’s net income allocable to the holders of the approximate 80% of the Impact 21 shares not owned by the Company prior to the closing date of the tender offer. The results of operations for PRL Japan have already been consolidated by the Company as described further in Note 2 to the accompanying audited consolidated financial statements.

American Living

In Fiscal 2008, the Company launched American Living , a new lifestyle brand created exclusively in the U.S. for distribution by JCPenney through the Company’s new Global Brand Concepts (“GBC”) group. The Company began shipping related product to JCPenney in December 2007 to support the launch of this new product line. The success of American Living and the introduction of new product categories in both the U.S. and overseas may be negatively impacted in Fiscal 2009 by ongoing economic uncertainty. See Item 7 — “Overview — Global Economic Uncertainty” for further discussion.

Other Developments

In late Fiscal 2007, the Company formed the Ralph Lauren Watch and Jewelry Company, S.A.R.L. (the “RL Watch Company”), a joint venture with Financiere Richemont SA (“Richemont”), the Swiss Luxury Goods Group. The Company began to incur certain start-up costs in Fiscal 2008 to support the launch of this business, which is expected to occur in the spring of calendar 2009.

Our Brands and Products

Since 1967, our distinctive brand image has been consistently developed across an expanding number of products, price tiers and markets. Our brands, which include apparel, accessories and fragrance collections for men and women as well as childrenswear and home furnishings, comprise one of the world’s most widely recognized families of consumer brands. Reflecting a distinctive American perspective, we have been an innovator in aspirational lifestyle branding and believe that, under the direction of internationally renowned designer Ralph Lauren, we have had a considerable influence on the way people dress and the way that fashion is advertised throughout the world. We combine consumer insight with our design, marketing and imaging skills to offer, along with our licensing alliances, broad lifestyle product collections with a unified vision:


• Apparel — Products include extensive collections of men’s, women’s and children’s clothing;

• Accessorie s — Products encompass a broad range, including footwear, eyewear, jewelry, hats, belts and leathergoods, including handbags and luggage;

• Home — Coordinated products for the home include bedding and bath products, furniture, fabric and wallpaper, paint, tabletop and giftware; and

• Fragrance — Fragrance products are sold under our Glamourous, Romance, Polo, Lauren, Safari, Ralph and Black Label brands, among others.

Our lifestyle brand image is reinforced by our RalphLauren.com internet site, which averaged 2.6 million unique visitors a month and acquired approximately 290,000 new customers during Fiscal 2008 resulting in 1.3 million customers in total.

Ralph Lauren Purple Label

A contemporary take on traditional bespoke tailoring, Ralph Lauren Purple Label is the ultimate expression of modern elegance for men. From precisely tailored made-to-measure suits to sophisticated sportswear, Purple Label reflects an impeccable sense of the dashing and refined, fashioned from exclusive, limited-edition fabrics of the highest quality and expertly crafted in the spirit of Savile Row tailoring. Purple Label also offers made-to-order dress furnishings, accessories, luggage and benchmade footwear, as well as hand monogramming and custom engraving services. Ralph Lauren Purple Label competes with the finest men’s hand-tailored clothing lines. Ralph Lauren Purple Label is available primarily in Ralph Lauren stores, but is also available through specialty stores, fine department stores and online at RalphLauren.com.

Ralph Lauren Black Label for Men

Reflecting a sharp, modern attitude, Ralph Lauren Black Label is the essence of sophisticated dressing for men. Featuring razor-sharp tailoring and dramatically lean silhouettes, classic suitings and sportswear are infused with a savvier attitude for a look that is at once modern and timeless. Iconic yet fresh, Ralph Lauren Black Label represents a new chapter in men’s style. Black Label creates a niche among the finest contemporary tailored clothing lines. Black Label is available in Ralph Lauren stores, limited selection of specialty stores and better department stores and online at RalphLauren.com.

Polo by Ralph Lauren

Classic and authentic, Polo by Ralph Lauren is the foundation of the world of Ralph Lauren menswear, combining the time-honored aesthetic of East Coast Ivy League casual style with proper English refinement. Polo is an original symbol of the preppy lifestyle. The iconic polo player logo is recognized worldwide as a symbol of heritage and authenticity. From classic favorites such as oxford shirts and chino pants to modern collections that combine heritage preppy with a chic, downtown feel, Polo sets the standard for a well-worn look with an aspirational sensibility, creating a comprehensive line of sportswear, tailored clothing and accessories to fulfill a man’s every wardrobe need. Polo leads the industry of fine men’s sportswear brands. Polo is available in Ralph Lauren stores, department stores, specialty stores and elsewhere online at Bloomingdales.com and RalphLauren.com.

Lauren for Men

Created to broaden the reach of the Ralph Lauren men’s statement, Lauren for Men conveys a spirit of tradition while recalling the sophistication of Polo Ralph Lauren menswear. Classic and perfectly polished, the Lauren men’s line includes suits, sport coats, dress pants, tuxedos, outerwear and rental formalwear. This comprehensive line competes with other men’s designer fashion lines. Lauren for Men is available at better department stores.

Ralph by Ralph Lauren

The Ralph by Ralph Lauren collection features suits, sport coats, dress trousers and suit vests designed with the classic style and fine fabrics for which Ralph Lauren is known. Refined construction details — all hallmarks of better men’s suitings — and a range of timeless patterns and colors establish Ralph by Ralph Lauren as a strong foundation for the modern man’s wardrobe. Ralph by Ralph Lauren is available exclusively at Dillard’s stores.

Ralph Lauren Collection

The crown jewel of Ralph Lauren womenswear, Collection makes its dramatic first appearance each season on the runways of New York, providing the fashion world with the season’s definitive Ralph Lauren style statement. Embodying glamour and sophistication, Collection’s distinctive couture sensibility is expressed though modern yet timeless silhouettes — expertly crafted from the finest luxury fabrics — reflecting the epitome of bold femininity and rarefied chic as expressed by Ralph Lauren. Ralph Lauren Collection competes with the finest designer collections found in Paris, Milan and New York. Ralph Lauren Collection is sold primarily in Ralph Lauren stores. Select pieces are also available through specialty stores, the finest department stores and online at RalphLauren.com.

Ralph Lauren Black Label for Women

Sophisticated and classic with a modern edge, Black Label translates the luxurious spirit of Ralph Lauren Collection into a distinctive, timeless collection of icons for town, country, day and evening. Created from the finest materials, Black Label silhouettes — elegant and striking — are the cornerstones of the Ralph Lauren woman’s wardrobe. Black Label competes with the finest women’s collections — the “gold tier” of wholesale brands. Black Label is offered primarily in Ralph Lauren stores. Select pieces are also available in designer boutiques, fine specialty stores, better department stores and online at RalphLauren.com.

Ralph Lauren Blue Label

Fresh and eclectic with a sexy, youthful spirit, Blue Label embodies the Ralph Lauren sensibility through heritage looks with a chic, modern twist. Whether reflecting Ivy League-inspired style, a modern take on proper English refinement or a feminine translation of the rugged spirit of the American West, Blue Label creates a mix of style that is eclectic, timeless and unmistakably Ralph Lauren. Blue Label occupies a niche in the women’s sportswear market. Blue Label is offered primarily through Ralph Lauren stores and online at RalphLauren.com.

Lauren by Ralph Lauren

Created to broaden the reach of the Ralph Lauren women’s statement, Lauren conveys a spirit of heritage and tradition while recalling the sophisticated luxury of Black Label. Timeless and perfectly polished, Lauren suits, sportswear and outerwear provide ideal combinations for every occasion, while Lauren Active infuses a country club sensibility into practical sports apparel, creating fashionable wardrobe solutions for golf, tennis, yoga or weekend wear. Lauren competes with other designer fashion lines and is sold in department stores in the U.S. and Canada and online at RalphLauren.com.

Pink Pony

Established in 2000, Pink Pony is Polo Ralph Lauren’s initiative in the fight against cancer. With a focus on breast cancer, Pink Pony supports programs for early diagnosis, education, treatment and research, and is dedicated to bringing patient navigation and quality cancer care to medically underserved communities. A portion of sales from Pink Pony products benefits the Pink Pony Fund. Pink Pony apparel consists of feminine, slim-fitting women’s sportswear items and accessories crafted in luxurious fabrics. Hooded sweatshirts, cotton mesh polos, canvas tote bags and cashmere yoga pants all feature our iconic pink Polo Player — a symbol of our commitment to the fight against cancer. Pink Pony is available at select Ralph Lauren stores and online at RalphLauren.com. To learn more about Pink Pony and Polo Ralph Lauren’s other philanthropic efforts, please visit the PRL Foundation section of RalphLauren.com.

RRL

Embodying the cool rugged spirit of classic Western Americana, RRL is inspired by an authentic sensibility, providing distinctive designs and a selection of vintage pieces for men and women. From weathered blue jeans, distressed leather jackets and Western shirts to one-of-a-kind belts and cowboy boots, RRL evokes the bohemian freedom of the frontier borderlands — distinctively Ralph Lauren, distinctly American. RRL competes with a wide range of new and vintage clothing lines that pique the interest of collectors of unique American style. RRL is available at select Ralph Lauren stores and freestanding RRL stores.

RLX

Created to answer the demands of dedicated athletes for superior high-performance outfitting, RLX provides gear that unites the highest standards of quality, design and technology. The result is a line of cutting edge athletic fashion with an unmistakable respect for both functionality and style. Utilizing a network of alliances among the RLX design team, world-class athletes and makers of the most innovative fabrics available, RLX helps athletes overcome the challenges encountered in disciplines as varied as wintersports, tennis, golf, sailing and cycling. RLX competes with leading providers of fashionable high-performance activewear. The complete RLX Ski line is available at the RLX flagship store in Aspen, Colorado. Select RLX products are available at additional Ralph Lauren stores and online at RalphLauren.com. The RLX Golf collection — proud to sponsor professional golfer Luke Donald — is available at select private golf clubs and resorts.

Polo Golf and Ralph Lauren Golf

Rooted in the design heritage of Ralph Lauren, Polo Golf and Ralph Lauren Golf feature luxury technical performance wear for men and women that travels effortlessly between the course and the clubhouse. Polo Golf is a proud sponsor of pro golfers Tom Watson, Davis Love III and Jonathan Byrd. Ralph Lauren Golf is proud to sponsor Morgan Pressel — the youngest champion in LPGA Tour history. Polo Golf and Ralph Lauren Golf collections compete with the highest-quality providers of men’s and women’s golf apparel, and are available in the most exclusive private clubs and resorts. The Golf collections are also available at RalphLauren.com.

Rugby

With a preppy Ivy League sensibility at the heart of Ralph Lauren heritage, Rugby combines sporty varsity looks with city savvy to create a youthful, energetic collection of sportswear. From edgy, rebellious, sport-inspired looks for men to sharp, sexy, urban campus styles for women, Rugby embraces a lasting sense of timeless individuality. Rugby competes with brands favored by today’s college students and recent graduates. Launched in 2004, Rugby is available exclusively at Rugby stores throughout the United States. Store locations and information on events at Rugby stores are online at Rugby.com.

Ralph Lauren Childrenswear

Reflecting the signature spirit of Ralph Lauren, our children’s collections provide classic style for kids of all ages — from Layette to Toddler to Girls size 16 and Boys size 20. Featuring seasonal looks as well as the full range of iconic Ralph Lauren styles — including classic polos, oxford shirts, navy blazers and our luxurious cashmere — Ralph Lauren Childrenswear brings style to everyday dressing and special occasions. Ralph Lauren Childrenswear leads the industry in fine designer clothing for children. Ralph Lauren Childrenswear can be found in select Ralph Lauren stores, better department stores and online at RalphLauren.com.

Accessories

In addition to apparel, fragrance and home collections, Ralph Lauren has created a wide array of accessories and dress furnishings that reflect a vision of timeless elegance. Each Ralph Lauren women’s collection features handbags, scarves, belts, sunglasses, jewelry and footwear fashioned from the most luxurious materials in the world with exquisitely crafted hardware and finishing touches. Men’s furnishings, including sunglasses, neckwear, footwear, leathergoods, luggage, cuff links and formalwear accents, are similarly refined. Ralph Lauren Accessories compete with the finest international designer collections. Ralph Lauren Accessories are available in Ralph Lauren stores, select specialty stores and online at RalphLauren.com. Eyewear is available in all domestic Ralph Lauren stores, including the Ralph Lauren Madison Avenue Eyewear store, select optical/sunglass retailers and online at RalphLauren.com.

Fragrance

In 1978, Ralph Lauren expanded the lifestyle brand to encompass the world of fragrance, launching Lauren for women and Polo for men. Since then, Ralph Lauren Fragrance has captured the essence of Ralph Lauren’s men’s and women’s brands, from the timeless heritage and grace of Lauren and Polo to the sophisticated beauty of Polo

Black for men and Romance for women to the modern, fresh Ralph fragrances for her, designed to appeal to a younger audience. Men’s fragrances include Safari, Polo Sport, Polo Blue, Romance, Romance Silver, Purple Label, Polo Black and Double Black. Women’s fragrances include Safari, Polo Sport, Ralph Lauren Blue, Lauren, Lauren Style, Romance, Pure Turquoise, Ralph, Ralph Cool, Ralph Hot and Ralph Rocks. Ralph Lauren fragrances compete with better department store brands and designer fragrances. Ralph Lauren fragrances are available in department stores, specialty and duty free stores, perfumeries and online at RalphLauren.com and RalphRocks.com.

Ralph Lauren Home

As the first designer to create an all-encompassing home collection, Ralph Lauren presents a comprehensive lifestyle experience featuring complete, luxurious worlds for the home. Whether inspired by timeless tradition or reflecting the utmost in modern sophistication, each of the collections is distinguished by the enduring style and expert craftsmanship of Ralph Lauren. The Home collections include bed and bath linens, china, crystal, silver, decorative accessories, gifts, garden and beach, as well as lighting, window hardware, furniture, fabric, trimmings and wallcovering. Ralph Lauren Home competes with providers of the finest home design products. Ralph Lauren Home offers exclusive luxury goods at select Ralph Lauren stores, trade showrooms and online at RalphLauren.com. An assortment of items is also available at select department stores and home specialty stores. The complete world of Ralph Lauren Home can be explored online at RalphLaurenHome.com.

Lauren Home

In the spirit of Ralph Lauren and impeccably designed for timeless style, Lauren Home offers a wide array of bedding, bath, tabletop, gifts, decorative accessories, furniture, floorcovering and lighting collections for the well-appointed home. Lauren Home is available in department stores, select home specialty stores and online at Bloomingdales.com and RalphLauren.com. Lauren Spa, a refreshing collection of organic bedding and bath launched in 2007, is available at Bloomingdales, Bloomingdales.com and RalphLauren.com.

Ralph Lauren Paint

Introduced in 1995, Ralph Lauren Paint offers a line of exceptional-quality interior paint ranked high in the industry for performance. Inspired by classic and modern lifestyles from the world of Ralph Lauren, Ralph Lauren Paint features a signature palette of over 500 colors and a collection of unique finishes and innovative techniques. An extension of the Ralph Lauren Home lifestyle, Ralph Lauren Paint is an attainable product designed to reach a broad yet selective audience. Ralph Lauren Paint is offered at select specialty stores and The Home Depot. The complete color palette, paint how-to’s, a guide to professional painters and Color Testers available for purchase are online at RalphLaurenHome.com.

Club Monaco

Club Monaco is a dynamic, international retail concept that designs, manufactures and markets its own Club Monaco clothing and accessories. Each season, Club Monaco offers men’s and women’s updated classics and key fashion pieces that are the foundation of a modern wardrobe. The brand’s signature clean and modern style gives classics an update through great design and a current sensibility. Club Monaco is the lifestyle destination for today’s urban professional. Currently, Club Monaco operates 65 stores throughout North America and, through licensing arrangements, has recently opened stores in Hong Kong, Seoul and Dubai.

Chaps

Rooted in the rich heritage of Polo Ralph Lauren, Chaps is a premier lifestyle brand that translates the timeless style of Polo into an accessible line of sportswear and accessories for men, women, children and the home. A complete American lifestyle collection, Chaps offers a world of classic, authentic style in the spirit of Ralph Lauren. The Chaps men’s collection is available at select department and specialty stores. The Chaps collections for women, children and the home are available exclusively at Kohl’s and Kohls.com.

Global Brand Concepts

American Living

American Living is the first brand developed under the new Global Brand Concepts group. American Living is a full lifestyle brand, featuring menswear, womenswear, childrenswear, accessories and home furnishings with a focus on timeless, authentic American classics for every day. American Living is available exclusively at JCPenney in the U.S. and online at JCP.com.

Our Wholesale Segment

Our Wholesale segment sells our products to leading upscale and certain mid-tier department stores, specialty stores and golf and pro shops, both domestically and internationally. We have focused on elevating our brand and improving productivity by reducing the number of unproductive doors within department stores in which our products are sold, improving in-store product assortment and presentation, and improving full-price sell-throughs to consumers. As of March 29, 2008, the end of Fiscal 2008, our products were sold through 10,806 doors worldwide, and during Fiscal 2008, we invested approximately $49 million in shop-within-shops dedicated to our products primarily in domestic and international department stores. We have also effected selective price increases on basic products and introduced new fashion offerings at higher price points.

Department stores are our major wholesale customers in North America. In Europe, our wholesale sales are a varying mix of sales to both department stores and specialty shops, depending on the country. Our collection brands — Women’s Ralph Lauren Collection and Black Label and Men’s Purple Label Collection and Black Label — are distributed through a limited number of premier fashion retailers. In addition, we sell excess and out-of-season products through secondary distribution channels, including our retail factory stores.

In Japan, our products are distributed primarily through shop-within-shops at premiere department stores. The mix of business is weighted to Polo Ralph Lauren in Men’s and Women’s Blue Label. The distribution of Men’s and Women’s Black Label is also expanding through shop-within-shop presentations in top tier department stores across Japan.

CEO BACKGROUND

Ralph Lauren
Age 68
Mr. Lauren has been Chairman, Chief Executive Officer and a director of the Company since prior to the Company’s initial public offering in 1997, and was a member of the Advisory Board of the Board of Directors of the Company’s predecessors since their organization. He founded Polo in 1967 and has provided leadership in the design, marketing, advertising and operational areas since such time.


Roger N. Farah
Age 55
Mr. Farah has been President, Chief Operating Officer and a director of the Company since April 2000. He was Chairman of the Board of Venator Group, Inc. from December 1994 to April 2000, and was Chief Executive Officer of Venator Group, Inc. from December 1994 to August 1999. Mr. Farah is a member of the Board of Directors of Aetna, Inc.


Jackwyn Nemerov.
Age 56
Ms. Nemerov has been Executive Vice President of the Company since September 2004 and a director of the Company since February 2007. From 1998 to 2002, she was President and Chief Operating Officer of Jones Apparel Group, Inc.


Tracey T. Travis
Age 45
Ms. Travis has been Senior Vice President of Finance and Chief Financial Officer of the Company since January 2005. Ms. Travis served as Senior Vice President, Finance of Limited Brands, Inc. from April 2002 until August 2004, and Chief Financial Officer of Intimate Brands, Inc. from April 2001 to April 2002. Prior to that time, Ms. Travis was Chief Financial Officer of the Beverage Can Americas group at American National Can from 1999 to 2001, and held various finance and operations positions at Pepsi Bottling Group from 1989-1999. Ms. Travis is a member of the boards of directors of Jo-Ann Stores, Inc. and the Lincoln Center Theater.


Mitchell A. Kosh
Age 58
Mr. Kosh has served as Senior Vice President of Human Resources and Legal of the Company since July 2000. He was Senior Vice President of Human Resources of Conseco, Inc., from February 2000 to July 2000. Prior to that time, Mr. Kosh held executive human resource positions with the Venator Group, Inc. starting in 1996.

MANAGEMENT DISCUSSION FROM LATEST 10K

INTRODUCTION

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to the accompanying audited consolidated financial statements and footnotes to help provide an understanding of our financial condition, changes in financial condition and results of our operations. MD&A is organized as follows:


• Overview. This section provides a general description of our business, including our objectives and risks, and a summary of financial performance for Fiscal 2008. 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 2008, Fiscal 2007 and Fiscal 2006.

• Financial condition and liquidity. This section provides an analysis of our cash flows for Fiscal 2008, Fiscal 2007 and Fiscal 2006, as well as a discussion of our financial condition and liquidity as of March 29, 2008. The discussion of our financial condition and liquidity includes (i) our available financial capacity under our credit facility, (ii) a summary of our key debt compliance measures and (iii) a summary of our outstanding debt and commitments as of March 29, 2008.

• Market risk management. This section discusses how we manage exposure to potential losses arising from adverse changes in interest rates, foreign currency exchange rates and fluctuations in the reported net assets of certain of our international operations.

• Critical accounting policies. This section discusses accounting policies considered to be important to our financial condition and results of operations, which 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 Notes 3 and 4 to our accompanying audited consolidated financial statements.

• Recent accounting standards. This section discusses the potential impact to our reported financial condition and results of operations of accounting standards that have been issued, but which we have not yet adopted.

OVERVIEW

Our Business

Our Company is a global leader in the design, marketing and distribution of premium lifestyle products including men’s, women’s and children’s apparel, accessories, fragrances and home furnishings. Our long-standing reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets. Our brand names include Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Rugby, Ralph Lauren Childrenswear, Chaps, Club Monaco and American Living , among others.

We classify our businesses into three segments: Wholesale, Retail and Licensing. Our wholesale business (representing 57% of Fiscal 2008 net revenues) consists of wholesale-channel sales made principally to major department stores, specialty stores and golf and pro shops located throughout the U.S., Europe and Asia. Our retail business (representing 39% of Fiscal 2008 net revenues) consists of retail-channel sales directly to consumers through full-price and factory retail stores located throughout the U.S., Canada, Europe, South America and Asia, and through our retail internet site located at www.RalphLauren.com (formerly known as Polo.com). In addition, our licensing business (representing 4% of Fiscal 2008 net revenues) consists of royalty-based arrangements under which we license the right to third parties to use our various trademarks in connection with the manufacture and sale of designated products, such as apparel, eyewear and fragrances, in specified geographical areas for specified periods. Approximately 25% of our Fiscal 2008 net revenues was earned in international regions outside of the U.S. and Canada. See Note 20 to the accompanying audited consolidated financial statements for a summary of net revenues by geographic location.

Our business is affected by seasonal trends, with higher levels of wholesale sales in our second and fourth quarters and higher retail sales in our second and third quarters. These trends result primarily from the timing of seasonal wholesale shipments and key vacation travel, back-to-school and holiday periods in the Retail segment.

Our Objectives and Risks

Our core strengths include a portfolio of global luxury lifestyle brands, a strong and experienced management team, a proven ability to develop and extend our brands distributed through multiple retail channels in global markets, a disciplined investment philosophy and a solid balance sheet. Despite the various risks and uncertainties associated with the current global economy as further discussed below, we believe our core strengths will continue to allow us to execute our strategy for long-term sustainable growth in revenue, net income and operating cash flow.

During the course of the past five fiscal years, our revenues, net income and operating cash flow have grown to record levels. See “Selected Financial Information” included elsewhere in this Fiscal 2008 10-K for further discussion.

Our operating success has been driven by the Company’s focus on six key objectives:


• Creating unique businesses primarily centered around one core and heritage-driven brand;

• Diversifying and expanding our products and prices, distribution channels and geographic regions;

• Improving brand control and positioning;

• Focusing on selective strategic partnerships;

• Implementing infrastructure improvements that support a worldwide business; and

• Funding our expansion through strong operating cash flow.

As our business has grown, our portfolio mix and brand control has evolved from primarily that of a mono-brand U.S. centric menswear wholesaler with a broad array of product and geographic licenses to that of a portfolio of lifestyle brands with a “direct control” model over most of our brands, products and international territories. We believe that this broader and better-diversified portfolio mix positions us for ongoing growth, offering our customers a range of products, price points and channels of distribution, and our size and global operations favorably position us to take advantage of synergies in design, sourcing and distribution.

In connection with our key objectives, we intend to continue to pursue opportunities for growth during the course of Fiscal 2009 and beyond. These opportunities and continued investment initiatives include:


• Global expansion of our retail presence in various formats and key markets, including Paris, France;

• Ongoing integration of our newly acquired Japanese businesses, and the transition of certain key product categories operated under pre-existing sublicenses in Japan into our own business;

• Further development of a wide array of luxury accessories product offerings, including handbags, footwear, small leathergoods and watches/jewelry; and

• Further growth in our initiatives to develop new lifestyle brands in partnership with select department and specialty stores, such as our current American Living brand with J.C. Penney Company, Inc. (“JCPenney”) and our current Chaps brand with Kohl’s Department Stores, Inc.

Global Economic Uncertainty

Our opportunities for long-term growth are accompanied by significant challenges and risks, particularly in the near term. Specifically, our business is dependent on consumer demand for our products. We believe that significant uncertainty and a slowdown in the U.S. macroeconomic environment negatively impacted the level of consumer spending for discretionary items during most of Fiscal 2008. Despite the more challenging U.S. retail environment that affected both the Company’s wholesale customers and retail channels, we continued to experience reported revenue growth for all quarters during Fiscal 2008. If the U.S. macroeconomic environment continues to be weak and/or spreads to significant markets outside of the U.S., these worsening economic conditions could have a continuing negative effect on the Company’s sales and operating margin growth rates across all segments in Fiscal 2009.

As of March 29, 2008, largely in response to the U.S. macroeconomic environment, our traditional retail partners in the U.S. have reduced their initial wholesale orders for fall 2008 apparel products. This contraction in the U.S. department and specialty store channel in Fiscal 2009 is expected to be more than offset primarily by sales in our new American Living product line and by the continuing growth in profitability of our businesses in Europe and Japan.

See Item 1A — “Risk Factors ” included elsewhere in this Fiscal 2008 10-K for further discussion.

Summary of Financial Performance

Operating Results

During Fiscal 2008, we reported revenues of $4.880 billion, net income of $419.8 million and net income per diluted share of $3.99. This compares to revenues of $4.295 billion, net income of $400.9 million and net income per diluted share of $3.73 during Fiscal 2007. As discussed further below, the comparability of our operating results has been affected by recent acquisitions and the adoption of the provisions of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of Statement of Financial Accounting Standards (“FAS”) No. 109” (“FIN 48”), effective as of the beginning of Fiscal 2008.

On a reported basis, our operating performance in Fiscal 2008 was primarily driven by 13.6% revenue growth, led by our Wholesale and Retail segments (including the effect of certain acquisitions that occurred in the first quarter of Fiscal 2008; see “ Recent Developments ” for further discussion). This revenue growth was partially offset by a decline in gross profit percentage of 30 basis points to 54.1% primarily due to the purchase accounting effects of our recent acquisitions, as well as increases in selling, general and administrative (“SG&A”) expenses and amortization expense of intangible assets driven by these acquisitions. The increase in SG&A expense was also attributable to the overall growth in our business. Excluding the effects of acquisitions, revenues increased by 8.6%, led by our Wholesale segment (8.1% growth) and Retail segment (9.7% growth). Excluding the effects of acquisitions, gross profit as a percentage of net revenues increased 10 basis points as improved performance in our European wholesale operations more than offset increased domestic promotional activity associated in part with the challenging U.S. retail environment.

Net income and net income per diluted share increased in Fiscal 2008 as compared to Fiscal 2007, principally due to a $20.1 million decrease in the provision for income taxes and an $0.8 million increase in operating income. The decrease in the provision for income taxes was driven by a 310 basis point decline in our effective tax rate.

See “Transactions Affecting Comparability of Results of Operations and Financial Condition” described below for further discussion of the recent acquisitions and the adoption of FIN 48.

Financial Condition and Liquidity

Our financial position reflects the funding of our recent acquisitions, our increased share repurchase activity and the overall relative strength of our business results. Excluding $74.3 million of short-term investments classified in our consolidated balance sheet outside of cash and cash equivalents, we ended Fiscal 2008 in a net debt position (total debt less total cash and cash equivalents) of $127.7 million, compared to a net cash position (total cash and cash equivalents less total debt) of $165.1 million at the end of Fiscal 2007.

The decrease in our net cash position as of the end of Fiscal 2008 was primarily due to the Japanese Business Acquisitions (as defined and discussed under “Recent Developments” ), net of approximately $239 million of Impact 21’s cash on-hand acquired. The decrease is also due to an increase in our share repurchases and capital expenditures. Our stockholders’ equity increased to $2.390 billion as of March 29, 2008, compared to $2.335 billion as of March 31, 2007. This increase was primarily due to our net income and higher other comprehensive income during Fiscal 2008, offset in part by our increased share repurchase activity and a $62.5 million reduction in retained earnings in connection with the adoption of FIN 48.

We generated $695.4 million of cash from operations in Fiscal 2008, compared to $796.1 million in Fiscal 2007. The decrease in operating cash flow was primarily driven by the absence of the approximately $180 million, net of certain tax withholdings, received under the Eyewear Licensing Agreement (as defined in Note 22 to the accompanying audited consolidated financial statements) in the prior fiscal year. We used our cash availability to reinvest in our business through capital spending and acquisitions, as well as in connection with our common stock repurchase program. In particular, we spent $217.1 million for capital expenditures primarily associated with global retail store expansion, construction and renovation of department store shop-in-shops and investments in our facilities and technological infrastructure. We used $188.7 million primarily to fund the Japanese Business Acquisitions and the Small Leathergoods Business Acquisition, net of cash acquired (see “Recent Developments” for further discussion). We also used $475.4 million to repurchase 6.0 million shares of Class A common stock.

Transactions Affecting Comparability of Results of Operations and Financial Condition

The comparability of the Company’s operating results for the three fiscal years presented herein has been affected by certain transactions, including:


• Acquisitions that occurred in Fiscal 2008, Fiscal 2007 and Fiscal 2006. In particular, the Company completed the Japanese Business Acquisitions on May 29, 2007, the Small Leathergoods Business Acquisition on April 13, 2007, the RL Media Minority Interest Acquisition on March 28, 2007, the Polo Jeans Business Acquisition on February 3, 2006 and the Footwear Business Acquisition on July 15, 2005 (each as defined in Note 5 to the accompanying audited consolidated financial statements).

• The adoption of the provisions of FIN 48 as of the beginning of Fiscal 2008 (April 1, 2007). Accruals required for Fiscal 2008 under the provisions of FIN 48 were entirely offset by the reversal of tax reserves, principally associated with an audit settlement and the expiration of a statute of limitations. The incremental impact of the adoption of FIN 48 decreased the effective tax rate by 97 basis points in Fiscal 2008. See Note 12 to the accompanying audited consolidated financial statements for further discussion of the Company’s adoption of FIN 48.

• The change in accounting for stock-based compensation effective as of the beginning of Fiscal 2007 (April 2, 2006), as well as certain pretax charges related to retail asset impairments recognized during each of Fiscal 2008 and Fiscal 2006.

• Certain pretax charges (reversals) related to restructurings and the Company’s credit card contingencies during the fiscal years presented.

Recent Developments

Japanese Business Acquisitions

On May 29, 2007, the Company completed its previously announced transactions to acquire control of certain of its Japanese businesses that were formerly conducted under licensed arrangements, consistent with the Company’s long-term strategy of international expansion. In particular, the Company acquired approximately 77% of the outstanding shares of Impact 21 Co., Ltd. (“Impact 21”) that it did not previously own in a cash tender offer (the “Impact 21 Acquisition”), thereby increasing its ownership in Impact 21 from approximately 20% to approximately 97%. Impact 21 conducts the Company’s men’s, women’s and jeans apparel and accessories business in Japan under a pre-existing, sub-license arrangement. In addition, the Company acquired the remaining 50% interest in Polo Ralph Lauren Japan Corporation (“PRL Japan”), which holds the master license to conduct Polo’s business in Japan, from Onward Kashiyama and Seibu (the “PRL Japan Minority Interest Acquisition”). Collectively, the Impact 21 Acquisition and the PRL Japan Minority Interest Acquisition are herein referred to as the “Japanese Business Acquisitions.”

The purchase price initially paid in connection with the Japanese Business Acquisitions was approximately $360 million, including transaction costs of approximately $12 million. In January 2008, at an Impact 21 shareholders meeting, the Company obtained the necessary approvals to complete the process of acquiring the remaining approximately 3% of outstanding shares not exchanged as of the close of the tender offer period (the “minority squeeze-out”). In February 2008, the Company acquired approximately 1% of the remaining Impact 21 shares outstanding at an aggregate cost of $5 million. The Company expects the minority squeeze-out to be successfully concluded in the first quarter of Fiscal 2009, at an estimated aggregate cost of $9 million.

The Company funded the Japanese Business Acquisitions with available cash on-hand and ¥20.5 billion of borrowings under a one-year term loan agreement pursuant to an amendment and restatement to the Company’s existing credit facility. The Company repaid the borrowing by its maturity date on May 22, 2008 using approximately $200 million of Impact 21’s cash on-hand acquired as part of the acquisition.

The results of operations for Impact 21, which were previously accounted for using the equity method of accounting, have been consolidated in the Company’s results of operations commencing April 1, 2007. Accordingly, the Company recorded within minority interest expense the amount of Impact 21’s net income allocable to the holders of the approximate 80% of the Impact 21 shares not owned by the Company prior to the closing date of the tender offer. The results of operations for PRL Japan have already been consolidated by the Company as described further in Note 2 to the accompanying audited consolidated financial statements.

Acquisition of Small Leathergoods Business

On April 13, 2007, the Company acquired from Kellwood Company (“Kellwood”) substantially all of the assets of New Campaign, Inc., the Company’s licensee for men’s and women’s belts and other small leather goods under the Ralph Lauren , Lauren and Chaps brands in the U.S. (the “Small Leathergoods Business Acquisition”). The assets acquired from Kellwood are operated under the name of “Polo Ralph Lauren Leathergoods” and allowed the Company to further expand its accessories business. The acquisition cost was approximately $10 million. Kellwood provided various transition services to the Company for a period of up to six months from the date of acquisition.

The results of operations for the Polo Ralph Lauren Leathergoods business have been consolidated in the Company’s results of operations commencing April 1, 2007.

Acquisition of RL Media Minority Interest

On March 28, 2007, the Company acquired the remaining 50% equity interest in Ralph Lauren Media, LLC (“RL Media”) formerly held by NBC-Lauren Media Holdings, Inc., a subsidiary wholly owned by the National Broadcasting Company, Inc. (“NBC”) (37.5%) and Value Vision Media, Inc. (“Value Vision”) (12.5%) (the “RL Media Minority Interest Acquisition”). RL Media conducts the Company’s e-commerce initiatives through the RalphLauren.com internet site and is consolidated by the Company as a wholly owned subsidiary. The acquisition cost was $175 million. In addition, Value Vision entered into a transition services agreement with the Company to provide order fulfillment and related services over a period of up to seventeen months from the date of the acquisition of the RL Media minority interest.

American Living

In Fiscal 2008, the Company launched American Living , a new lifestyle brand created exclusively in the U.S. for distribution by JCPenney through the Company’s new Global Brand Concepts (“GBC”) group. The Company began shipping related product to JCPenney in December 2007 to support the launch of this new product line. The success of American Living and the introduction of new product categories in both the U.S. and overseas may be negatively impacted in Fiscal 2009 by ongoing economic uncertainty. See “ Global Economic Uncertainty ” for further discussion.

Other Developments

In late Fiscal 2007, the Company formed the Ralph Lauren Watch and Jewelry Company, S.A.R.L. (the “RL Watch Company”), a joint venture with Financiere Richemont SA (“Richemont”), the Swiss Luxury Goods Group. The Company began to incur certain start-up costs in Fiscal 2008 to support the launch of this business, which is expected to occur in the spring of calendar 2009.

See Note 5 to the accompanying audited consolidated financial statements for further discussion of the Company’s acquisitions and joint venture formed during the fiscal years presented.

RESULTS OF OPERATIONS

Fiscal 2008 Compared to Fiscal 2007

NM Not meaningful.

Net Revenues. Net revenues increased by $584.7 million, or 13.6%, to $4.880 billion in Fiscal 2008 from $4.295 billion in Fiscal 2007. The increase was driven by a combination of organic growth, acquisitions and favorable foreign currency effects. Excluding the effect of acquisitions, net revenues increased by $371.2 million, or 8.6%. On a reported basis, wholesale revenues increased by $442.2 million primarily as a result of incremental revenues from the newly acquired Impact 21 and Small Leathergoods businesses, the inclusion of revenues from the initial shipments of the American Living product line to JCPenney and increased sales in our global menswear and womenswear product lines, primarily driven by strong performance in Europe. The increase in net revenues also was driven by an increase of $169.4 million in our Retail segment revenues as a result of an increase in comparable global retail store sales, continued global store expansion and growth in RalphLauren.com sales. The increase in net

revenues was partially offset by a decrease of $26.9 million in licensing revenue, primarily due to a decrease in international licensing royalties as a result of the loss of licensing revenues from Impact 21, which is now consolidated as part of the Wholesale segment. Also contributing to the decrease in licensing revenue was a net decrease in domestic licensing royalties, primarily due to the absence of approximately $8 million of minimum royalty and design-service fees received in connection with the termination of a licensing arrangement in the prior fiscal year.


Wholesale net revenues — The net increase primarily reflects:


• the inclusion of $254 million of revenues from the newly acquired Impact 21 and Small Leathergoods businesses, net of intercompany eliminations;

• an approximate $47 million increase in our European businesses on a constant currency basis driven by increased sales in our menswear and womenswear product lines;

• an aggregate $81 million net increase in our U.S. businesses. The net increase was primarily due to the initial shipments of the American Living product line to JCPenney; an increase in our menswear shipments; a net increase in womenswear, primarily driven by Chaps , partially offset by increased promotional activity; and an increase in footwear attributable to increased door penetration. Offsetting these increases were a decline in our childrenswear product lines due to weaker sales at department stores and increased promotional activity; and a planned reduction in our off-price channel denim business; and

• a $60 million increase in revenues due to a favorable foreign currency effect, primarily related to the continued strengthening of the Euro in comparison to the U.S. dollar in Fiscal 2008.

Retail net revenues — For purposes of the discussion of retail operating performance below, we refer to the measure “comparable store sales.” Comparable store sales refer to the growth of sales in stores that are open for at least one full fiscal year. Sales for stores that are closing during a fiscal year are excluded from the calculation of comparable store sales. Sales for stores that are either relocated, enlarged (as defined by gross square footage expansion of 25% or greater) or closed for 30 or more consecutive days for renovation are also excluded from the calculation of comparable store sales until such stores have been in their location or in a newly renovated state for at least one full fiscal year. Comparable store sales information includes both Ralph Lauren and Club Monaco stores.

The increase in retail net revenues primarily reflects:


• a $87 million aggregate net increase in comparable full-price and factory store sales on a global basis, including a net aggregate favorable $22 million foreign currency effect.

• a $52 million aggregate net increase in sales from non-comparable stores, primarily relating to new store openings within the past fiscal year. There was a net increase in average global store count of 9 stores, to a total of 313 stores, compared to the prior fiscal year. The net increase in store count was primarily due to several new domestic and international full-price and factory store openings; and

• a $30 million, or 26.4%, increase in sales at RalphLauren.com.

Licensing revenue — The net decrease primarily reflects:


• a $26 million net decrease in international licensing royalties, primarily due to the loss of licensing revenues from Impact 21, which is now consolidated as part of the Wholesale segment; and

• a $1 million net decrease in domestic licensing royalties, primarily due to the absence of approximately $8 million of minimum royalty and design-service fees received in connection with the termination of a licensing arrangement in the prior fiscal year. The net decrease was partially offset by an increase in eyewear-related royalties as a result of the licensing agreement entered into with Luxottica, which took effect on January 1, 2007.

Gross Profit. Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and import costs, as well as changes in reserves for shrinkage and inventory obsolescence. The costs of selling merchandise, including preparing the merchandise for sale, such as picking, packing, warehousing and order charges, are included in SG&A expenses.

Gross profit increased by $301.9 million, or 12.9%, to $2.638 billion in Fiscal 2008 from $2.336 billion in Fiscal 2007. Gross profit as a percentage of net revenues decreased by 30 basis points to 54.1% in Fiscal 2008 from 54.4% in Fiscal 2007, primarily due to the dilutive effect of our recent acquisitions. Excluding the effect of acquisitions, gross profit increased by $208.6 million, or 8.9%, and gross profit as a percentage of net revenues increased 10 basis points compared to Fiscal 2007. The increase in gross profit as a percentage of net revenues was due to improved performance in our European wholesale operations which generally carry higher margins, offset in part by increased domestic promotional activity as well as a slight change in the overall relative sales mix between the Wholesale segment and the higher margin Retail and Licensing segments.

Gross profit as a percentage of net revenues is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, the timing and level of promotional activities, foreign currency exchange rates, and fluctuations in material costs. These factors, among others, may cause gross profit as a percentage of net revenues to fluctuate from year to year.

We anticipate that current macroeconomic challenges, including inflationary pressures on raw material and fuel costs, could negatively affect the cost of our products and related gross profit percentages in Fiscal 2009. See Item 1A — “Risk Factors” for further discussion.

Selling, General and Administrative Expenses. SG&A expenses primarily include compensation and benefits, marketing, distribution, information technology, facilities, legal and other costs associated with finance and administration. SG&A expenses increased by $269.1 million, or 16.2%, to $1.932 billion in Fiscal 2008 from $1.663 billion in Fiscal 2007. SG&A expenses as a percent of net revenues increased to 39.6% in Fiscal 2008 from 38.7% in Fiscal 2007. The net 90 basis point increase was primarily associated with operating expenses at the Company’s newly acquired businesses and certain start-up costs related to new business launches. The $269.1 million increase in SG&A expenses was primarily driven by:


• the inclusion of SG&A costs of approximately $91 million for our newly acquired Impact 21 and Small Leathergoods businesses, including costs incurred pursuant to transition service arrangements;

• higher stock-based compensation expense of approximately $27 million primarily due to an increase in the Company’s share price as of the date of its annual equity award grant in the second quarter of Fiscal 2008 compared to the share price as of the comparable grant date in Fiscal 2007;

• higher compensation-related expenses (excluding stock-based compensation) of approximately $56 million, principally relating to increased selling costs associated with higher retail and wholesale sales and our ongoing product line expansion, including American Living and a dedicated dress business across multiple brands, as well as severance-related costs;

• an approximate $39 million increase in rent and utility costs to support the ongoing global growth of our businesses, including rent expense related to certain retail stores scheduled to open in Fiscal 2009;

• an approximate $25 million increase in depreciation expense primarily associated with global retail store expansion, construction and renovation of department store shop-in-shops and investments in our facilities and technological infrastructure; and

• an approximate $36 million increase in SG&A expenses due to unfavorable foreign currency effects, primarily related to the continued strengthening of the Euro in comparison to the U.S. dollar during Fiscal 2008.

Amortization of Intangible Assets. Amortization of intangible assets increased by $31.6 million, to $47.2 million in Fiscal 2008 from $15.6 million in Fiscal 2007. The net increase was primarily due to the amortization of intangible assets acquired in connection with the Company’s recent acquisitions. See “Recent Developments” for further discussion of the acquisitions.

Impairment of Retail Assets. A non-cash impairment charge of $5.0 million was recognized in Fiscal 2008 to reduce the carrying value of certain long-lived assets in the Company’s Retail segment to their estimated fair value. The impairment was primarily attributable to lower-than-expected operating cash flow performance in certain stores. No impairment charges were recognized in Fiscal 2007. See Note 7 to the accompanying audited consolidated financial statements for further discussion.

Restructuring Charges. Restructuring charges of $4.6 million were recognized in Fiscal 2007 primarily associated with the Club Monaco retail business. No significant restructuring charges were recognized in Fiscal 2008. See Note 11 to the accompanying audited consolidated financial statements for further discussion.

Operating Income. Operating income increased slightly by $0.8 million, or 0.1%, to $653.4 million in Fiscal 2008 from $652.6 million in Fiscal 2007. Operating income as a percentage of revenue decreased 180 basis points, to 13.4% in Fiscal 2008 from 15.2% in Fiscal 2007, primarily due to the effect of purchase accounting relating to the acquisitions. Excluding the effect of acquisitions, operating income increased by $43.0 million, or 6.6%, while operating income as a percentage of net revenues decreased 30 basis points in Fiscal 2008. The decrease in operating income as a percentage of net revenues primarily reflected the increase in SG&A expenses due to business expansion, partially offset by an increase in gross profit margin as previously discussed.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

RESULTS OF OPERATIONS

Three Months Ended June 28, 2008 Compared to Three Months Ended June 30, 2007

Net Revenues. Net revenues increased by $43.3 million, or 4.0%, to $1.114 billion in the first quarter of Fiscal 2009 from $1.070 billion in the first quarter of Fiscal 2008. The increase was primarily driven by favorable foreign currency effects and an increase in Retail revenues. Excluding the effect of foreign currency, net revenues increased by approximately 2%. On a reported basis, Wholesale revenues increased by $0.5 million, primarily as a result of the inclusion of revenues from the newly launched American Living product line and strong performance in Europe, offset in part by decreased sales in our core domestic product lines. Retail revenues increased by $42.4 million as a result of improved comparable global retail store sales, continued store expansion and growth in RalphLauren.com sales. Licensing revenue remained relatively consistent with the comparable prior year period.

• an approximate net $15 million increase in our European businesses on a constant currency basis driven by increased sales in our menswear, womenswear and childrenswear product lines, partially offset by an increase in promotional activity;

• a $14 million increase in revenues due to a favorable foreign currency effect related to the continued strengthening of the Euro in comparison to the U.S. dollar in the first quarter of Fiscal 2009; and

• an $8 million increase in net revenues in our Japanese wholesale operations, including favorable foreign currency effects.

The above net increase was significantly offset by:


• an aggregate $36 million net decrease in our domestic businesses primarily attributable to reduced shipments across our menswear, womenswear and childrenswear product lines as a result of the ongoing challenging U.S. retail environment (as discussed further in “Overview” section). Offsetting these decreases were the inclusion of revenues from the newly launched American Living product line and an increase in footwear sales attributable to increased door penetration.

Retail net revenues — For purposes of the discussion of retail operating performance below, we refer to the measure “comparable store sales.” Comparable store sales refer to the growth of sales in stores that are open for at least one full fiscal year. Sales for stores that are closing during a fiscal year are excluded from the calculation of comparable store sales. Sales for stores that are either relocated, enlarged (as defined by gross square footage expansion of 25% or greater) or closed for 30 or more consecutive days for renovation are also excluded from the calculation of comparable store sales until such stores have been in their location or in a newly renovated state for at least one full fiscal year. Comparable store sales information includes both Ralph Lauren and Club Monaco stores.



The increase in retail net revenues primarily reflects:


• a $15 million aggregate net increase in comparable full-price and factory store sales led by our European stores, including a net aggregate favorable foreign currency effect of $7 million.

• a $21 million aggregate net increase in sales from non-comparable stores, primarily relating to new store openings within the past twelve months. There was a net increase in average global store count of 21 stores, to a total of 317 stores, as compared to the first quarter of Fiscal 2008. The net increase in store count was primarily due to a number of new domestic and international full-price and factory store openings; and

• a $6 million, or 19.8%, increase in sales at RalphLauren.com.

Licensing revenue — The net increase primarily reflects:


• a $3 million increase in domestic licensing royalties, primarily driven by increases in men’s personal apparel and Chaps royalties as well as the inclusion of royalties for American Living .

The above increase was significantly offset by:


• a $1.5 million decrease in international licensing royalties; and

• a $1 million decrease in Home licensing royalties primarily driven by continued weakness in the U.S. economy.

Gross Profit. Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and import costs, as well as changes in reserves for shrinkage and inventory obsolescence. The costs of selling merchandise, including preparing the merchandise for sale, such as picking, packing, warehousing and order charges, are included in SG&A expenses.

Gross profit increased by $46.4 million, or 7.8%, to $638.4 million in the first quarter of Fiscal 2009 from $592.0 million in the first quarter of Fiscal 2008. Gross profit as a percentage of net revenues increased by 200 basis points to 57.3% for the three months ended June 28, 2008 from 55.3% for the three months ended June 30, 2007, primarily driven by continued growth in our European wholesale operations which generally carry higher margins. This increase was also due to the absence of unfavorable purchase accounting effects associated with the acquisitions of the RL Media Minority Interest and the Small Leathergoods Business included in the comparable prior year period.

Gross profit as a percentage of net revenues is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, the timing and level of promotional activities, foreign currency exchange rates, and fluctuations in material costs. These factors, among others, may cause gross profit as a percentage of net revenues to fluctuate from period to period.

Selling, General and Administrative Expenses. SG&A expenses primarily include compensation and benefits, marketing, distribution, information technology, facilities, legal and other costs associated with finance and administration. SG&A expenses increased by $48.4 million, or 11.0%, to $486.9 million in the first quarter of Fiscal 2009 from $438.5 million in the first quarter of Fiscal 2008. The increase included approximately $11 million of unfavorable foreign currency effects, primarily related to the continued strengthening of the Euro in comparison to the U.S. dollar during the first quarter of Fiscal 2009. SG&A expenses as a percent of net revenues increased to 43.7% for the three months ended June 28, 2008 from 41.0% for the three months ended June 30, 2007. The 270 basis point increase was primarily associated with increased operating expenses related to our new business initiatives. The $48.4 million increase in SG&A expenses was primarily driven by:


• higher compensation-related expenses of approximately $28 million principally relating to increased selling costs associated with higher retail sales and our ongoing product line expansion, including American Living and a dedicated dress business across multiple brands;

• an approximate $11 million increase in rent and utility costs to support the ongoing global growth of our businesses, including rent expense related to certain retail stores scheduled to open later in Fiscal 2009 and in Fiscal 2010; and

• an approximate $6 million increase in depreciation expense primarily associated with global retail store expansion, construction and renovation of department store shop-in-shops and investments in our facilities and technological infrastructure.

Amortization of Intangible Assets. Amortization of intangible assets decreased by $2.8 million, or 36.4%, to $4.9 million in the first quarter of Fiscal 2009 from $7.7 million in the first quarter of Fiscal 2008. The decrease was primarily due to the absence of the amortization of the licenses acquired in the Japanese Business Acquisitions, which were fully amortized by the end of Fiscal 2008. See “Recent Developments” for further discussion of the acquisitions.

Operating Income. Operating income increased by $0.8 million, or 0.5%, to $146.6 million in the first quarter of Fiscal 2009 from $145.8 million in the first quarter of Fiscal 2008. Operating income as a percentage of revenue decreased 40 basis points, to 13.2% for the three months ended June 28, 2008 from 13.6% for the three months ended June 30, 2007. The decrease in operating income as a percentage of net revenues primarily reflected the increase in SG&A expenses due to our new business initiatives, partially offset by an increase in gross profit margin as previously discussed.

Wholesale operating income decreased by $0.3 million primarily as a result of the net revenue decrease in our domestic businesses as well as higher SG&A expenses in support of our new product lines, including American Living . This decrease was partially offset by improved gross margin, primarily driven by continued growth in our European wholesale operations which generally carry higher margins.

Retail operating income increased by $3.6 million primarily as a result of higher revenues and the absence of unfavorable purchase accounting effects associated with the RL Media Minority Interest Acquisition included in the comparable prior year period. These increases were partially offset by higher occupancy costs and increased selling-related salaries and associated costs.

Licensing operating income increased by $2.3 million primarily due to increases in domestic licensing royalties, offset in part by net decreases in international and Home licensing royalties.

Unallocated corporate expenses increased by $4.8 million, primarily as a result of increases in compensation-related and facilities costs to support the ongoing growth of our businesses, as previously discussed under SG&A expenses .

Foreign Currency Gains (Losses). The effect of foreign currency exchange rate fluctuations resulted in a gain of $0.1 million in the first quarter of Fiscal 2009, compared to a loss of $1.3 million in the first quarter of Fiscal 2008. The comparable prior period loss included the $1.6 million write-off of foreign currency option contracts, entered into to manage certain foreign currency exposure associated with the Japanese Business Acquisitions, which expired unexercised. Excluding the aforementioned write-off, the foreign currency gains slightly decreased in the first quarter of Fiscal 2009 as compared to the first quarter of Fiscal 2008, primarily due to the timing of the settlement of intercompany receivables and payables (that were not of a long-term investment nature) between certain of our international and domestic subsidiaries. Foreign currency gains and losses are unrelated to the impact of changes in the value of the U.S. dollar when operating results of our foreign subsidiaries are translated to U.S. dollars.

Interest Expense. Interest expense includes the borrowing costs of our outstanding debt, including amortization of debt issuance costs. Interest expense increased by $1.2 million, to $7.0 million in the first quarter of Fiscal 2009 from $5.8 million in the first quarter of Fiscal 2008. The increase is primarily due to unfavorable foreign currency effects, principally related to our outstanding Euro-denominated debt.

Interest and Other Income, net. Interest and other income, net, decreased by $1.0 million, to $7.2 million in the first quarter of Fiscal 2009 from $8.2 million in the first quarter of Fiscal 2008. This decrease was principally driven by lower average interest rates.

Equity in Income (Loss) of Equity-Method Investees. The equity in loss of equity-method investees of $0.7 million in the first quarter of Fiscal 2009 related to certain start-up costs associated with the recently formed joint venture, the Ralph Lauren Watch and Jewelry Company, S.A.R.L. (the “RL Watch Company”), which the Company accounts for under the equity method of accounting. No equity in income (loss) was recorded in the first quarter of Fiscal 2008.

Minority Interest Expense. Minority interest expense of $1.8 million in the first quarter of Fiscal 2008 related to the Company’s remaining 50% interest in PRL Japan, which was acquired in May 2007, and the allocation of Impact 21’s net income to the holders of the 80% interest not owned by the Company prior to the closing date of the related tender offer. No minority interest expense was recorded in the first quarter of Fiscal 2009.

Provision for Income Taxes. The provision for income taxes represents federal, foreign, state and local income taxes. The provision for income taxes decreased by $5.8 million, or 10.2%, to $51.0 million in the first quarter of Fiscal 2009 from $56.8 million in the first quarter of Fiscal 2008. This decrease was primarily due to a reduction in our reported effective tax rate of 420 basis points, to 34.9% for the three months ended June 28, 2008 from 39.1% for the three months ended June 30, 2007. The lower effective tax rate was primarily due to lower state and foreign income taxes principally relating to statutory law changes, a more favorable geographic income mix and lower permanent differences. The effective tax rate differs from statutory rates due to the effect of state and local taxes, tax rates in foreign jurisdictions and certain nondeductible expenses. Our effective tax rate will change from period to period based on non-recurring factors including, but not limited to, the geographic mix of earnings, the timing and amount of foreign dividends, enacted tax legislation, state and local taxes, tax audit findings and settlements, and the interaction of various global tax strategies.

Net Income. Net income increased by $6.9 million, or 7.8%, to $95.2 million in the first quarter of Fiscal 2009 from $88.3 million in the first quarter of Fiscal 2008. The increase in net income principally related to a

decrease of $5.8 million in our provision for income taxes and an increase of $0.8 million in operating income, as previously discussed.

Net Income Per Diluted Share. Net income per diluted share increased by $0.11, or 13.4%, to $0.93 per share in the first quarter of Fiscal 2009 from $0.82 per share in the first quarter of Fiscal 2008. The increase in diluted per share results was due to the higher level of net income, as previously discussed, and lower weighted-average diluted shares outstanding for the three months ended June 28, 2008.

CONF CALL

James Hurley - Investor Relations

Good morning and thank you for joining us on Polo Ralph Lauren's first quarter of fiscal 2009 conference call. The agenda for today's call includes Roger Farah, our President and Chief Operating Officer, who will give you an overview of the quarter and comment on our broader strategic initiatives. And Tracey Travis, our Chief Financial Officer will provide operational and financial highlights from the first quarter in addition to reviewing our expectations for fiscal 2009. After that we will open up the call for your questions which we'd like you to limit to one per caller.

As you know, we'll be making some forward-looking comments today including our financial outlook. The principle risks that could cause our results to differ materially from our current expectations are detailed in our SEC filings.

And now I'd like to turn the call over to Roger.

Roger N. Farah - President and Chief Operating Officer

Thank you Jim and good morning everyone. We're pleased to be reporting first quarter results that exceeded our expectations. We delivered a 4% revenue growth with a solid retail comp of 4%. And our diluted earnings per share increased 13%, compared to last year. While the first quarter sales growth was in line expectations, the margin performance was better than we had anticipated.

I'm proud of the results we achieved considering the fact that the domestic retail environment continues to be challenging. Our first quarter reflects the successful benefits of our long term strategic initiatives. Primarily, our commitment to new merchandised development and product innovation, our ongoing attempts to expand our direct to consumer, and our growing international presence.

This multi-prong strategy is designed to diversify our businesses, reduce our exposure to anyone reason of the world or channel of distribution and to give us more direct control over our brands. We believe our strategy positions us well for the future. At the same time, we have to focus on our short-term execution, particularly in uncertain environments. I believe our results over the last few quarters demonstrates that we are performing on a very high level.

Our inventories are very well managed as they are below last year. And at the same time our retail sell-through rates have been strong and our profit margins have benefited as a result. Our cash flows have grown with more direct control we now have over our businesses, and we have made the right decisions in order to deliver a very strong balance sheet, with large growing cash balances and very little debt.

Our entire management team has supported and delivered on these key short-term operating priorities. Because of this cross functional discipline, we are comfortable pursuing our long term initiatives. Beginning with our international expansion efforts, our brand sales throughout Europe and Asia continue to grow at a double-digit rate, which is consistent with the trends we've experienced over the last several quarters.

Sales in high profile department stores such as Galleries Lafayette, Harrods or Selfridges are particularly strong, aided by the iconic styling of our spring summer merchandise. We have also seen continued strength in our men's, women's and kids businesses across the international platforms. In Japan, we continue to see encouraging results from our remerchandising efforts at target doors. And we are refining our understanding of how to tier our products for specific points of sale.

As you read our press release this morning, we recently took direct control of our childrenswear and golf apparel businesses in Japan, from our former licensee, Naigai, who will continue to hold the licence for our Polo branded hosiery sales in Japan. This is a major building block as we re-position our brand in this important market.

We now directly control product categories that account for approximately 75% of our wholesale volume in Japan. With respect to our direct to consumer strategy, the comp store momentum at our directly operated stores is being complimented by new store opening and sustained double-digit gains at ralphlauren.com. I believe it's worth noting that our comps that remain healthy even as the overall domestic retail environment has deteriorated. Something I attribute to the desirability of our brand and products and our growing skills as a retail organization.

As you know we have a few very large store projects in progress in Paris and New York City. We expect these stores will reset the bar for the luxury shopping experience and in important brand statements for us that will likely resonate on a global level. We are also on schedule to launch rugby.com in the next couple of weeks in time for the back-to-school season. And we will leverage the customer fulfilment centre we recently completed for ralphlauren.com to service this exciting new avenue of growth for Rugby.

Moving on to the last of our long-term strategic initiatives, our commitment to new merchandise development and product innovation. New products have been a critical driver of consumer demand for us and the momentum behind our Polo, Black Label and Purple Label brands remain strong worldwide. We will be opening new points of distribution for our luxury products in the fall season in cities such as Paris and Istanbul.

Domestically, the growth in our emerging product categories such as footwear, dresses and our expanding Black Label men's sportswear merchandise has helped to offset lower shipments for our core men's, women's and kid's products. While the impact of lower shipments were planned for, our retail sell-throughs during the quarter were very strong. This is particularly through of our men's and children's products.

I believe that our performance is not only a testimony of the strength and vitality of our brands, but also a function of the fact that we are innovating, executing and merchandising at a higher and better level than ever before. Speaking of innovation, we continue to deliver new exciting products to J.C. Penney's American Living. In early July, we shipped young men's assortments in time to capitalize in the back-to-school season.

And we remain very excited about the growth potential for American Living. In addition to assuming more direction control over the design production and management of our various products over the years, our global commitment to investing in advertising, marketing and public relations has helped to elevate our brand and increase its desirability around the world.

In the past few years, we've begun sponsoring high profile sporting events such as Wimbledon and the U.S. Open. We are very excited as our role as an official outfitter of the U.S. Olympic and Paralympic teams at the Beijing Summer Olympics which begin in two days. Much of the product we have provided for the athlete is available to purchase in many of our stores. The outfits for the opening ceremony are consistent with our luxury brand and are true to our American heritage.

And I hope you will be among the estimated 4 billion people who tune into watch the opening ceremony to witness the unveiling of Ralph's iconic designs for yourself. Well, our new fiscal year is off to a good start. We continue to have a conservative view of the domestic retail environment. That said, we are raising our outlook for fiscal 2009 which Tracey will walk you through a little later. In the context of a challenging macro environment, we will to manage our businesses diligently.

I believe we are well positioned for the upcoming fall and holiday seasons. We have planned our inventories conservatively for the balance of the year and the initial read on sales of early fall merchandise is encouraging. Of course, we'll also state a course investing in our long term strategic growth initiatives as our past efforts have proven to be an excellent way for us to create value for our shareholders.

The strength of our management team cannot go unrecognized as it is their ability to execute against our various strategies that allow us to deliver for our shareholders. The fact that they are able to do so in the context of such a challenging business condition is a true testimony to their skills and Ralph and I would like to thank them for their hard work.

Now I'd like to turn the call over to Tracey to discuss the financial and operating highlights of the first quarter as well as our updated outlook for fiscal 2009.

Tracey T. Travis - Chief Financial Officer

Thank you, Roger and good morning everyone. First, I would like to highlight for you the drivers of our first quarter net income in earnings per share performance. Then I'll take you to our revised guidance for fiscal 2009. For the first quarter we achieved consolidated net revenues of $1.1 billion, an increase of 4% over the prior year's period. Higher sales were achieved as a result of strong international sale, particularly, in Europe and growth in our global retail segment, where consolidated comps rose 3.9% during the quarter and that was on top of a 7.6% increase in the prior year period.

Our ralphlauren.com sales also grew double-digit. Shipments of our newly launched American Living brand in the U.S., were more than offset, by lower shipments of our core domestic wholesale products. Approximately, half of our total revenue growth was due to the favourable Euro exchange rate.

Our gross profit dollar increased 8% to $638 million, and our gross profit rate increased 200 basis points to 57.3% in the first quarter, compared to 55.3% during the same period last year. The growth in gross profit dollars and the expansion in gross profit rate reflect both are growth in sales as well as the benefit of the strong currency effect related to our international sales. We did also have a small gross profit rate benefit, compared to last year due to the drop off of the purchase accounting impact from last year's acquisition.

First quarter operating expenses increased 10% to $492 million, compared to $446 in the first quarter of fiscal 2008. Operating expenses as a percent of revenues were 44.2%, 250 basis points higher than last year. The higher operating expenses primarily reflect the impact of the newly required and emerging businesses as well as higher occupancy expenses for our open stores. Operating income for the first quarter was a $147 million, approximately equal to the prior year period. And our operating margin for the quarter was 13.2%, 40 basis points below that of the first quarter of fiscal 2008.

Declining off in the operating margin rate reflects the higher operating expenses associated with business expansion that were partially offset by the higher gross margin rates.

Net income for the first quarter of fiscal 2009 increased 8% to $95 million and net income per diluted share increased 13% to $0.93. The increase in our net income principally relates to a higher gross profit margin that was offset by increased operating expenses that I just discussed and to an effective tax-rate of 35% in the first quarter of fiscal 2009, compared to a 39% rate in the comparable period last year.

The lower effective tax rate for the first quarter was primarily result of the lower income taxes, principally relating to favorable statutory law changes. Favorable geographic income mix as well as lower permanent differences. And now I'd like to spend a few minutes providing more insight into our segment highlights for the quarter.

Regarding our wholesale segment, sales of $575 million were essentially flat with those in the first quarter of Fiscal 2008. Revenues from American Living and strength in European sales were offset by lower domestic shipments of our core men's, women's and childrenswear products. The lower shipments reflect a planned reduction in orders from domestic wholesale account, which came as a result of the sharp slowdown in retail business trends last fall. They also compared strong orders in the year earlier period.

Our sell-throughs and wholesaler accounts were strong as Roger mentioned earlier. Consistent with the trend of the last few quarters, menswear remained stronger that womenswear. Although, womenswear also performed well in the quarter. In menswear, knits and shorts were the best performing categories, and customers responded particularly well for the color and novelty items in our assortment.

Our first quarter wholesale operating income of a $107 million was flat with the prior year per and our reported operating margin was 18.7%, 10 basis points below the prior year's operating margin. For our retail group, first quarter sales increased 9% to $492 million. Overall comp store sales increased 3.9% reflecting an increase of 5.3% in Ralph Lauren stores, 3.3% at factory stores and 2.9% at Club Monaco stores. RalphLauren.com sales were up 20% over the comparable period.

In general, stores that benefited from a high level of international tourism such as our New York City stores, outperformed locations that are more relying on U.S. consumers. Importantly, we are entering the full selling season with lean current inventory.

We opened seven new stores during the quarter, including two new store locations in East Hampton , New York. Retail operating income was $67 million in the quarter, 6% higher than the $64 million of retail operating income in the first quarter of fiscal 2008. The growth in retail operating income was a result of revenue growth as well as a reduction in the purchase accounting effects associated with the all medium minority interest acquisition that negatively affected retail operating income in the first quarter of last year. The retail operating margin decline 50 basis point to 13.6% in the first quarter of fiscal 2009, primarily reflecting increased occupancy cost cause related to future store openings and higher selling related expenses.

Licensing royalties for the quarter were $47 million, up 1% compared to the prior year, as a growth in our domestic Polo men's underwear and Chaps royalties and revenues from new American Living product licenses offset a decline in home licensing royalties.

Operating income for our licensing segment, increased to 11% to $24 million in first quarter fiscal 2009, compared to $22 million in the prior you period. The growth in licensing operating income was due to higher licensing royalties from Chaps and American Living that were partially offset by a declining from royalties as mentioned earlier.

As Roger mentioned, we ended the first quarter in excellent financial conditions and with a very strong balance sheet. We had $711 million dollars in cash, cash equivalents and short-term investments compared to $626 million at the end of fiscal 2008. Net of debt, we had $241 million in cash and short-term investments at end of the first quarter, which compares favorably with a $53 million net debt position at the end of fiscal 2008. And during the first quarter, we did pay back short term loan used to finance the Impact 21 and the New Polo Japan acquisitions last year.

We ended the first quarter with inventory down 6% from the same period in the prior year. The year-over-year decline in inventory compares to our 4% sales growth in the quarter. We are committed to proactively managing inventory in a disciplined manner as we have demonstrated in the past several quarters, particularly in this difficult environment.

With respect to other balance sheet items, we achieved a return on equity of 19% for the last 12 months ending with the first quarter of fiscal 2009. And our return on investment was 28%. We spent approximately $56 million on capital expenditures during the first quarter of fiscal 2009 to support new retail stores, also shop installations and other infrastructure investments.

Now that we are in our second quarter of fiscal 2009, we know the domestic retail environment remains challenging for us and for others. Uncertain times are likely to persist as expectations for consumer spending in the U.S. and some other... major international markets continue to be scale back.

As you well aware, we are... will be managing to a reduced level of domestic wholesale orders for most of fiscal 2009. And this pull back does compare to recently strong orders throughout most of fiscal 2008, especially in the first half of the year. Wholesale accounts continue to extremely conservative with their inventory which is totally understandable in this environment as we are conservative about inventory.

Well our first quarter results were better than our original expectations we are maintaining a conservative view of the entire domestic retail environment. In addition, as Roger mentioned earlier, we have acquired certain assets inclusive of inventory for childrenswear in golf apparel in Japan from our former licensee, Naigai. We expect to incur approximately $0.8 to $0.10 of earning dilution inclusive of non-cash purchase price amortization related to assuming more direct control of our childrenswear in golf apparel distribution in the U.S. We did acquire certain assets related to the acquisition of the transaction. We invested approximately 3 billion yen or $28 million to acquire these assets and those assets did include primarily inventory as well as some other assets.

And all of that detail will be reflected in the 10-Q that we'll file tomorrow. As you saw in this morning's press release, we are now guiding to full year fiscal 2009 diluted EPS of $4 to $4.10. Our top-line guidance of a low to mid-single digit increase in that revenues remains unchanged. Our full year guidance also reflects the dilutive impact, related to the Naigai assets or acquisitions.

For the second quarter, our guidance is for net revenue growth of mid to high single digit and an operating margin that is up 50 to 100 basis points, compared to a year earlier period.

And with that I will conclude the company's remarks and we will open the call up for question and answer. Operator could you assist is with that please.

SHARE THIS PAGE:  Add to Delicious Delicious  Share    Bookmark and Share



 
Username Comments
mytrader 
newbie
Posts: 2

Reg: 11-11-08

11-11-08 03:50 AM - Post#1634    
    In response to Stock_Man

www.007trader.comWe are professional brand shoes,jeans and clothing supplier in china.
sport shoes:
Air Force 1 shoes,clear AF1 shoes,ice cream shoes,Jordan 1-22,jordan shoes,clear jordan shoes.
Airmaxshoes:max90,max95,m ax97,max2003,,max2005,max 2006,,max180,max360,TN,ni keShoxshoes:shox VC,Turob,monster,NZ,OZ,TL , R3,R4, Duck shoes,puma shoes,james lebron shoes,adidas shoes,timberland shoes,bape shoes,prada shoes,gucci shoes,Rigf shoes, desqaured shoes,hogan shoes,chanel shoes,rich shoes,D&G shoes,icecream shoes
soccor shoes:nike,world cup,F 50+,Predator,ugg boots
Apparel :
jean:Evisu-jeans,Diesel-j eans,Bape-jeans,Red monkey-jeans,d&g-jean s,BBC jeans,G star,replay,Armani,Rock&a mp;Republik
Coat:BAPE hoody,bapejacket,AF Jacket, A 10EEEP hoodies,A LRG hoodies,A&F
T-shirt : Polo T-shirt,lacoste T-shirt, evisu T-shirt,bape T-shirt,burberry T-shirt,timberland T-shirt handbag:Lv handbag,gucci handbag,channel handbag,fendi handbag,prada handbag,juicy hangbag
hat, WATCH:AP,ARMANI,BAPE,BREG UET,BREITLING,BURBERRY,BV LGARI,CAPTIER,CHANEL,CHOP ARD,CK,CORUM,D&G,RRAN K MULLER,Gucci,HERMES,HUBLO T,IWC,Jacob&Co,JL,LON GINES,LV,MONTBLANC,OMEGA, PANERAI,PATEK PHILIPPE,PIAGET,RADO,ROLE X,
Apple ipod
(price):all goods prices are wholesale price.
(quality):high and AAA quality.
(deliver time): 5 work-days to arrive after you pay.
Our business areas: South America, North America, Europe, Austrilia and South East Asia.
Our packing: All the shoes is packed with original box,and the tags and style code number is 100% correct.
We accept big & small quantity order,mixed order and dropship.
If you buy more things,I will give you the best price and the best quality.
website:www.007trader.com

SHARE THIS PAGE:  Add to Delicious Delicious  Share    Bookmark and Share


 
Icon Legend Permissions Topic Options
You can comment on this topic
Print Topic

Email Topic

28157 Views