moncler outlet uk Ralph Lauren Management Discusses Q4 2012 Results

moncler outlet uk Ralph Lauren Management Discusses Q4 2012 Results

Ralph Lauren Management Discusses Q4 2012 Results

Good morning, and thank you for calling the Ralph Lauren’s Fourth Quarter Fiscal 2012 Earnings Conference Call. As a reminder, today’s conference is being recorded. [Operator Instructions] Now for opening remarks and introductions, I will turn the conference over to Mr. James Hurley. Please go ahead, sir.

Good morning, and thank you for joining us on Ralph Lauren’s fourth quarter and full year fiscal ’12 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 year and comment on our broader strategic initiatives; Jacki Nemerov, our Executive Vice President, will provide some product commentary; and Tracey Travis, our Chief Financial Officer, will provide operational and financial highlights from the fourth quarter in addition to reviewing our initial expectations for fiscal ’13. After that, we will open the call up for your questions, which we ask that you limit to one per caller.

During today’s call, we will be making some forward looking statements within the meaning of the federal securities laws, including our financial outlook. Forward looking statements are not guarantees, and our actual results may differ materially from those expressed or implied in the forward looking statements. Our expectations contain many risks and uncertainties. The principal risks and uncertainties 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.

Thank you, Jim, and good morning, everyone. We are pleased to be reporting exceptional fourth quarter and full fiscal ’12 results this morning. For the full year, our sales increased 21% to nearly $9 billion, reflecting $7 billion, excuse me, I’m already excited, reflecting excellent growth across our major channels of distribution and geographic regions.

We achieved record level operating earnings of over $1 billion, a function of our strong sales growth and our ability to leverage expenses even as we continue to make substantial investments to support our long term growth objectives.

Diluted EPS rose 24% for the year, which is an acceleration from the low teens compounded growth we delivered in the prior 3 years.

We ended fiscal ’12 with $1.3 billion in cash and investments. This is the third 100% increase in the quarterly cash dividend in as many years and is a clear demonstration of our company’s commitment to enhance shareholder returns.

As strong as our operating performance was for fiscal 2012, let’s not forget that we started the year facing some formidable headwinds. Every year has its own unique set of challenges at the onset. Some of that is purposeful and strategic and some of that are a function of external realities. At the beginning of fiscal ’12, we were contending with considerable political and social uncertainty in Europe and the Middle East; the aftermath of the devastating earthquake and tsunami in Japan; and most significantly of all, we faced an unprecedented spike in our cost of goods.

We managed through these external factors thoughtfully while staying focused on our long term growth objectives of expanding our international presence, extending our direct to customer reach including significant investments in global e commerce, innovating and developing new product categories such as the launch of Denim Supply and assuming the control of our home textile operations, investing in our global systems and infrastructure and attracting and developing world class talents.

Our results confirm the extraordinary operational and managerial disciplines of our global teams, and they are reflective in the incredible appeal of the Ralph Lauren brand worldwide.

Our international sales rose 33% in 2012 and represented 36% of our revenue, which is 300 basis points above the prior year level and compares to just 20% 5 years ago.

Our European revenue was up 26%, an acceleration from the low teens compounded growth rate we achieved over the prior 5 years. This is considerable progress for a period characterized by substantial macroeconomic challenges. And despite near term caution, it’s also a validation of growth opportunities we continue to see in Europe over the long term.

We made major progress transforming our operations and brand presence throughout Asia during the year. Our talented locally based teams are leveraging our more comprehensive and direct control over the regions and are implementing plans that, we believe, significantly benefit our company over the long term.

We have a unique opportunity to get this right. So we’re being thoughtful and deliberate in the pacing and sequencing of our investments in people, systems, infrastructure, distribution and marketing. In some cases, this involves taking a step back in order to find a clearer, more profitable path to the future. This same approach has worked very well for us in the past in Europe and Japan and with the transition of many of our product licenses.

As most of you know, we embarked on a major brand repositioning effort in Greater China, closing 95 points of distribution, representing 60% of our network, during the year. We effectively reset our presence in the market, leaving us with what we believe is a more brand appropriate and a stronger foundation for growth.

Over the next 3 years, we expect to open approximately 60 new stores in Greater China, all in premier locations and adjacent to the world’s leading luxury brands. 15 of those stores are in place for the back half of fiscal 2013 across many of the major cities including Beijing, Shanghai and Hong Kong.

The integration of our formally licensed South Korean operations was executed seamlessly during the year. And in a relatively short period of time, the local team has embraced our culture and operating procedures. Over the last year, we successfully closed and repositioned 30 concession shops, which is approximately 17% of our total Korean shop presence, and we are beginning to implement many of the strategic merchandise initiatives that have worked well for us in other parts of the world.

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