On 27th May 2020, Ralph Lauren (NYSE: RL) has announced its Q4 fiscal 2020 which ended on March 28, 2020, and Final earnings. The company said that it has successfully gained the attention of new generation customers by its unique brand-building campaigns which includes campaigns such as Ralph’s Club fashion shows, Earth polo launch etc, which has led to an increase in marketing investments by 3% in fiscal 2020. The company has reported that its average unit retail sales using its direct-to-customer sales network has grown by 8% in the fourth quarter and 3 % for the full fiscal year 2020.
- Net Revenue: The Net Revenue reported for Q4 2020 was $1.27 Billion which has decreased by 15.38% compared to $1.50 Billion in Q4 2019, for the fiscal year 2020 the net revenue reported is $6.15 Billion which has declined by 2.4% compared to $6.3 Billion in the fiscal year 2019.
- Gross Profit: The Gross Profit reported for Q4 2020 was $594.4 million which has decreased by 34.06% compared to $901.5 million in Q4 2019, this rise is mainly due to an increase in the cost of goods sold by 12% as an effect of COVID- 19 pandemic on business. In the fiscal year 2020, the Gross profit reported is $3.65 Billion which has decreased by 5.9% compared to $3.88 Billion in fiscal year 2019.
- Gross Margin: The gross margin for Q4 2020 was 46.7% which has decreased from 59.1% in Q4 2019. In the fiscal year 2020, the gross margin was 59.3% which has decreased from 61.9% in fiscal year 2019.
- Operating Expenses: The operating Expenses for Q4 2020 was $878.2 million which has increased by 0.52% compared to $873.6 million in Q4 2019. In the fiscal year 2020, the operating expenses were $3.32 billion which increased by 0.36% compared to $3.32 billion in fiscal year 2019.
- Operating Income(Loss): The operating income(loss) for Q4 2020 was ($283.8) million which has changed from $27.9 million in Q4 2019. The operating income for the fiscal year 2020 was $317 million which has reduced by 43.57% compared to $561.8 million in fiscal year 2019.
- Net Income( Loss): The Net income (loss) for Q4 2020 was ($287.2) which is the biggest loss to date from $27.9 million in Q4 2019. In the fiscal year 2020, the net income was $384.3 which has decreased by 10.81% compared to $430.9 % in fiscal year 2019.
- Earnings per share: The Earnings per share (EPS) for the Q4 2020 has turned negative $3.38 per share compared to Q4 2019 EPS of $0.39 per share. In the fiscal year of 2020, the Earnings per share is $5.07 which has reduced from $5.35 per share in the fiscal year 2019.
Balance-sheet & Cash Flow Highlights
The company in the fiscal 2020 has $1.62 Billion as Cash & Cash equivalents which has increased by 174.33% compared to the Cash & cash equivalents of $584.1 million in fiscal 2019. The Short term investments of the company in fiscal 2020 was $495.9 million which has decreased by 64.66% compared to $1.40 Billion in fiscal 2019. The company has $1.2 Billion in total debt which has increased by 74% compared to the total debt of $689 million in fiscal 2019. The company has an inventory at the end of fiscal 2020 of $736.2 million which has decreased by 10% compared to $817.8 million in fiscal 2019, the company has stated that the decline in the inventory has an impact on the increase in the inventory reserves related to the business disruption caused by the pandemic.
The company had done a capital expenditure of $270 million in fiscal 2020 which has increased compared to a capital expenditure of $198 million in fiscal 2019, the company has said that this increase is related to the continued improvements made to their global information systems and enhancements made to its offices in New York & New Jersey areas.
The company has reportedly in the Q4 2020 has repurchased about $152 million of its Class A common stock and about $650 million in fiscal 2020 including the fourth quarter. Due to the situation of COVID -19 the company has not provided any future outlook for fiscal 2021 and its first quarter.
COVID -19 related Business measures
The company has said that all its stores and distribution centers are being deeply cleaned on a regular basis. The company has continued to offer access to its teams including employees furloughed to their Employee Relief Fund which includes medical, child, and eldercare benefits. The company has committed $10 million towards COVID -19 relief funds through its Ralph Lauren Corporate Foundation. The company has also donated around 1.5 million clothing products to the frontline workers and the company has announced a production of 250,000 masks and 25,000 isolation gowns to donate it to its frontline workers.