Polo Ralph achieves record earnings in Q1
Polo Ralph Lauren Corporation reported net income of $114 million, or $1.13 per diluted share, for the fourth quarter of Fiscal 2010, compared to net income of $45 million, or $0.44 per diluted share, for the fourth quarter of Fiscal 2009. Net income for Fiscal 2010 was $480 million, or $4.73 per diluted share, compared to net income of $406 million, or $4.01 per diluted share, for Fiscal 2009.
Results for the fourth quarter and full year Fiscal 2010 periods included 14 and 53 weeks, respectively, while the same periods in Fiscal 2009 included 13 and 52 weeks, respectively. The 53rd week contributed approximately $70 million to fourth quarter and full year Fiscal 2010 net revenues. Results for the fourth quarter of Fiscal 2009 include a $48 million pre-tax, non-cash asset impairment charge associated with store-related assets and a $21 million pre-tax restructuring charge. Excluding these one-time charges, net income in the fourth quarter of Fiscal 2009 would have been $87 million and net income per diluted share would have been $0.86. Similarly, excluding $55 million of pre-tax, non-cash impairment charges and $24 million of pre-tax restructuring charges, net income per diluted share for Fiscal 2009 would have been $4.50.
"Fiscal 2010 was a year of tremendous growth and progress for our Company," said Ralph Lauren, Chairman and Chief Executive Officer. "We successfully took control of our important Asian operations, we made great strides in the development of our accessories products and we opened several luxury stores in key global markets. We achieved record earnings for the year in the context of the worst financial recession in my lifetime, a feat that not only speaks to the desirability of our products, the effectiveness of our marketing and merchandising efforts and the relevance of our strategy, but also to the incredible dedication and hard work of our employees worldwide. Having traveled around the world over the last few months, I am inspired by what the future holds for us," Mr. Lauren added.
"Our fourth quarter and full year results exceeded our expectations on virtually all operating metrics. The resilient sales and strong profit performance are the direct result of years of consistent reinvestment in our business and intensely disciplined operational management," said Roger Farah, President and Chief Operating Officer. "After generating more than $900 million in cash from operating activities last year, and with more than $1.2 billion in cash and investments on our balance sheet, we are planning an aggressive acceleration of our investment in our growth initiatives during Fiscal 2011, particularly in international markets and with our direct to consumer efforts."
Fourth Quarter and Full Year Fiscal 2010 Income Statement Review
Given the importance and prevalence of the concession shop model in the Company's anticipated Asian expansion plans, during the fourth quarter of Fiscal 2010, the Company determined it appropriate to reclassify $198 million of net revenues and $8 million of operating income for the full fiscal year period to the retail segment from the wholesale segment. The reclassification applies to the Company's Japanese concession shop operations and reflects the direct selling, expense and inventory ownership dynamics of the concession shop model. Prior period results have been restated to reflect the reclassification, which has no impact on previously reported consolidated net revenues, operating income or net income figures. A reconciliation of the reclassification is provided in the "Other Information" section of this press release.