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Polo Ralph Lauren posts better-than-expected quarterly results
May '09
Polo Ralph Lauren Corporation reported net income of $45 million, or $0.44 per diluted share, for the fourth quarter of Fiscal 2009, compared to net income of $104 million, or $1.00 per diluted share, for the fourth quarter of Fiscal 2008. Excluding impairment and restructuring charges incurred during the fourth quarter of Fiscal 2009 (defined as “Adjusted” figures in this press release), net income was $87 million and net income per diluted share was $0.86.

During the fourth quarter of Fiscal 2009, the Company incurred a $48 million pre-tax, non-cash asset impairment charge associated with store-related assets and a $21 million pre-tax restructuring charge. The restructuring charge was primarily related to approximately 500 headcount reductions throughout the Company in order to better align expenses with the recent slowdown in consumer spending, as well as to costs associated with store closures.

Net income for Fiscal 2009 was $406 million, or $4.01 per diluted share, compared to net income of $420 million, or $3.99 per diluted share for Fiscal 2008. Excluding $55 million of pre-tax, non-cash impairment charges and $24 million of restructuring charges for the full year period, net income per diluted share was $4.50 in Fiscal 2009, exceeding the Company's guidance of $3.85-$4.00.

A reconciliation between reported GAAP and adjusted non-GAAP financial measures accompanies the financial tables at the end of this press release. The Company uses non-GAAP financial measures, among other things, to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. The Company believes that excluding items that are not comparable from period to period helps investors and others compare operating performance between two periods.

“Fiscal 2009 was one of the most challenging economic years the world has ever faced, but our results demonstrate that we are operating from a position of strength,” said Ralph Lauren, Chairman and Chief Executive Officer. “The global economy, and the United States in particular, is facing monumental challenges and we are not immune from them. I am proud of our Company's ability to take fast, definitive action to offset some of the external pressures. We've had to make difficult choices to react to the current environment, but we are managing the business prudently and making decisions for sustained success over the long term, like investing in international markets and continuing to develop innovative products. We are doing all of this without compromising the integrity of our brands,” Mr. Lauren added.

“The desirability of our products, complemented by the proactive measures we took during the year to protect our brands and profitability, enabled us to deliver better than expected Fiscal 2009 earnings,” said Roger Farah, President and Chief Operating Officer. “Over the next year, we intend to leverage our financial and managerial strengths to pursue compelling global market share opportunities. Our efforts will include accelerated investment in the transition of our business in Southeast Asia as well as an intensification of new product development. These investments will be balanced with a continued focus on operational and expense management. The restructuring actions taken in the fourth quarter of Fiscal 2009 are expected to result in annualized pre-tax savings of approximately $25 million, and we remain focused on identifying other cost savings initiatives. While we expect the economic uncertainty that defined Fiscal 2009 to continue throughout Fiscal 2010, our Company is prepared to navigate through this difficult environment.”

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