Ralph Lauren financials

• Polo Ralph Lauren is a premier global player in the design, distribution and marketing of lifestyle products such as men’s, women’s and children’s apparel, accessories, fragrances and home furnishings.


• The company's reported just over $4.8 billion in revenues in 2008, a $200 million increase from 2007. The company's product lines range from relatively inexpensive brands (such as Chaps) to expensive, exclusive pieces (Ralph Lauren Collection).

• The fact that Polo Ralph Lauren sells its goods internationally exposes the company to exchange rate risk. Fluctuating exchange rates have had a substantial impact on sales: a gain of $1.6 million in Fiscal 2009 and a net loss of $6.4 million in Fiscal 2008. In addition, new wealth in Asia has led the company to increase control over its own brand in that region.

• In response to the poor economic conditions in the United States and European economies, the company has cut costs and inventories in order to prevent markdowns that would only decrease its net income. In the first quarter of fiscal 2010 (ended June 27, 2009) the company reported earnings of 76 cents per share, which outstripped analyst estimates of 49 cents per share. Net revenue and same-store sales fell by 8 and 9% respectively. The drop in same-store sales was an improvement over the two previous quarters, when they dropped by 15.9 and 13.5%. The company has managed to beat analyst estimates in an especially poor season for consumer spending through controlling costs and increased sales in Europe.

• Ralph Lauren's operations fall under three primary categories: Wholesale, Retail, and Licensing.

-Wholesale

• Wholesale makes up the largest portion of Polo Ralph Lauren's revenues.] Ralph Lauren has strong relations with several department stores allowing the company to indirectly target a wide range of customers. Wholesale sales increased by 4.68% in FY09 to over $2.8 billion. As Polo repurchases its licensed brands, a large portion of these sales are shifted to wholesale. One key area of growth in Wholesale could be the development of private labels with department stores,

-Retail

• Ralph Lauren's retail stores focus on showcasing the "World of Ralph Lauren" by offering a wide selection of luxury products to customers. The retail presence serves as a platform for Ralph Lauren to launch new lines and maintain brand strength. The retail segment accounted for 39% of the company's total revenue in FY09 as retail sales grew to $1.94 billion. Ralph Lauren's retail segment operates through the chain of 326 retail and factory outlet stores, as well as the company's online store. In fiscal 2009, same store sales for the retail segment decreased by 5.2%, a key signal of strong growth as same store sales figures exclude sales from new store locations and are more reflective of true organic sales growth.

• Ralph Lauren views internet sales as a prime source of future growth (online sales 26% in FY08 and 18.7% in FY09) and accordingly is investing in improving distribution centres and customer service to increase scales.

-Licensing

• Licensing once represented one of the largest revenue sources for Ralph Lauren, but the company has moved away from this area of late by re-purchasing several of its licensed products. Licensing revenues continued to fall in fiscal 2009, to $195 million. This move away from licensing reflects an attempt by the company to take greater control over its operations and brands.

As a result of Ralph Lauren's wide range of brands, it faces competition in every price point from discount to luxury.

Polo Ralph Lauren Competitors [14]


Polo Ralph Lauren Brand Competitors

Men's Purple and Black Label Giorgio Armani, Hugo Boss Collection, Ermenegildo Zegna, Faconnable

Ralph Lauren Collection and Women's Black Label Donna Karan, Giorgio Armani, Calvin Klein, Hermes


Blue Label (Men's and Women's) DKNY, Michael Kors, Calvin Klein


Polo by Ralph Lauren Lacoste, Nautica, Armani Exchange, DKNY, Michael Kors, IZOD, Kenneth Cole Productions, Van Heusen


Lauren by Ralph Lauren Liz Claiborne, DKNY, Michael by Michael Kors, Jones New York Signature

RLX Prada Sport

Polo Golf & Polo Tennis Nike, Reebok, Adidas AG (ADDYY) , etc.


Rugby Abercrombie & Fitch Company (ANF), J. Crew Group (JCG), American Eagle Outfitters (AEO), Guess? (GES)


Club Monaco Banana Republic, Zara, Reiss, Theory, Armani Exchange


Home Decor, Bath, and Bedding Hotel Collection, Calvin Klein, Charter Club, DKNY