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What changed in Ralph Lauren Corporation's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ralph Lauren Corporation's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+503 added−556 removedSource: 10-K (2024-05-23) vs 10-K (2023-05-25)

Top changes in Ralph Lauren Corporation's 2024 10-K

503 paragraphs added · 556 removed · 405 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

112 edited+34 added−54 removed114 unchanged
Biggest changeThis ethos of timelessness extends beyond our products to the lives, communities and material resources our business intersects. "Timeless by Design" is how we apply our Company's Purpose, to inspire the dream of a better life through authenticity and timeless style, to our approach to citizenship and sustainability. We live this commitment through three key pillars: 1.
Biggest changeThat is what we call Timeless by Design , our approach to Global Citizenship and Sustainability and our ambition for a better future. We weave our Company's purpose throughout our business through three key pillars: 1. Create with Intent • Integrated Circularity — Our ethos of timelessness has always guided our creative vision.
Our Ralph Lauren digital commerce sites offer our customers access to a broad array of Ralph Lauren, Polo, Lauren, and Double RL apparel, footwear & accessories, watch and jewelry, fragrance, and home product assortments, and reinforce the luxury image of our brands.
Our Ralph Lauren digital commerce sites offer our customers access to a broad array of Ralph Lauren, Double RL, Polo, and Lauren apparel, footwear & accessories, watch and jewelry, fragrance, and home product assortments, and reinforce the luxury image of our brands.
We combine consumer insight with our design, marketing, and imaging skills to offer, along with our licensing alliances, broad lifestyle product collections with a unified vision: • Apparel — Our apparel products include extensive collections of men's, women's, and children's clothing, which are sold under various brand names, including Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others. • Footwear & Accessories — Our range of footwear & accessories encompasses men's, women's, and children's, including casual shoes, dress shoes, boots, sneakers, sandals, eyewear, watches, fashion and fine jewelry, scarves, hats, gloves, umbrellas, and leather goods, including handbags, luggage, small leather goods, and belts, which are sold under our Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps brands. • Fragrance — Our fragrance offerings capture the essence of Ralph Lauren's men's and women's brands with numerous labels, designed to appeal to a variety of audiences.
We combine consumer insight with our design, marketing, and imaging skills to offer, along with our licensing alliances, broad lifestyle product collections with a unified vision: • Apparel — Our apparel products include extensive collections of men's, women's, and children's clothing, which are sold under various brand names, including Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, 6 Polo Ralph Lauren, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others. • Footwear & Accessories — Our range of footwear & accessories encompasses men's, women's, and children's, including casual shoes, dress shoes, boots, sneakers, sandals, eyewear, watches, fashion and fine jewelry, scarves, hats, gloves, umbrellas, and leather goods, including handbags, luggage, small leather goods, and belts, which are sold under our Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps brands. • Fragrance — Our fragrance offerings capture the essence of Ralph Lauren's men's and women's brands with numerous labels, designed to appeal to a variety of audiences.
See " Import Restrictions and Other Government Regulations, " Item 1A — " Risk Factors — Risks Related to Macroeconomic Conditions — Economic conditions could have a negative impact on our major customers, suppliers, vendors, and lenders, which in turn could materially adversely affect our business," and Item 1A — " Risk Factors — Risks Related to our Business and Operations — Our business is subject to risks associated with importing products and the ability of our manufacturers to produce our goods on time and to our specifications ." Most of our businesses must commit to the manufacturing of our garments before we sell finished goods, whether to wholly-owned retail stores or to wholesale customers.
See " Import Restrictions and Other Government Regulations, " Item 1A — " Risk Factors — Risks Related to Macroeconomic Conditions — Economic conditions could have a negative impact on our major customers, suppliers, vendors, and lenders, which in turn could materially adversely affect our business," and Item 1A — " Risk Factors — Risks Related to our Business and Operations — Our business is subject to risks associated with importing products and the ability of our manufacturers to produce our goods on time and to our specifications ." Most of our businesses must commit to the manufacturing of our garments before we sell finished goods, whether through wholly-owned retail stores or to wholesale customers.
" Although we have not suffered any material restriction from doing business in desirable markets in the past, we cannot assure that significant impediments will not arise in the future as we expand product offerings and introduce additional trademarks to new markets. Human Capital Our purpose is to inspire the dream of a better life through authenticity and timeless style.
" Although we have not suffered any material restriction from doing business in desirable markets in the past, we cannot assure that significant impediments will not arise in the future as we expand product offerings and introduce additional trademarks to new markets. 19 Human Capital Our purpose is to inspire the dream of a better life through authenticity and timeless style.
In addition, we license to third parties for specified periods the right to access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home. 3 We organize our business into the following three reportable segments: North America, Europe, and Asia.
In addition, we license to third parties for specified periods the right to access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings. 3 We organize our business into the following three reportable segments: North America, Europe, and Asia.
With a sharpened focus on the needs of the modern player but rooted in the rich design tradition of Ralph Lauren, the Golf collections combine state-of-the-art performance wear with luxurious finishing touches. Our Golf collections are available in select Polo stores, exclusive private clubs and resorts, and online at RalphLauren.com. Pink Pony.
With a sharpened focus on the needs of the modern player but rooted in the rich design tradition of Ralph Lauren, the Golf collections combine state-of-the-art performance wear with luxurious finishing touches. Our Golf collections are available in select Ralph Lauren stores, exclusive private clubs and resorts, and online at RalphLauren.com. Pink Pony.
Ralph Lauren Home offers exclusive luxury goods at select Ralph Lauren stores and select wholesale partners, home specialty stores, trade showrooms, and online at our Ralph Lauren digital commerce site, RalphLauren.com. Ralph Lauren Watches and Jewelry. We offer a premier collection of Swiss-made timepieces, which embody Ralph Lauren's passion for impeccable quality and exquisite design.
Ralph Lauren Home offers exclusive luxury goods at select Ralph Lauren stores and select wholesale partners, home specialty stores, trade showrooms, and online at our Ralph Lauren digital commerce site, RalphLauren.com. 7 Ralph Lauren Watches and Jewelry. We offer a premier collection of Swiss-made timepieces, which embody Ralph Lauren's passion for impeccable quality and exquisite design.
Ralph Lauren Collection and Ralph Lauren Purple Label are made in Italy with the utmost attention to detail and quality and are available in select Ralph Lauren stores around the world, an exclusive selection of the finest specialty stores, and online at our Ralph Lauren digital commerce sites, including RalphLauren.com. Double RL.
Ralph Lauren Collection and Ralph Lauren Purple Label are made predominantly in Italy with the utmost attention to detail and quality and are available in select Ralph Lauren stores around the world, an exclusive selection of the finest specialty stores, and online at our Ralph Lauren digital commerce sites, including RalphLauren.com. Double RL.
Lauren for women combines aspirational timeless style with modern femininity in a lifestyle collection of sportswear, denim, and dresses, as well as footwear & accessories. Lauren for women is available in select department stores around the world and online at select digital commerce sites, including RalphLauren.com.
Lauren for women combines aspirational timeless style with modern femininity in a lifestyle collection of sportswear, denim, and dresses, as well as footwear & accessories. Lauren for women is available in select department stores around the world and online at select digital commerce sites, including RalphLauren.com. Lauren Home.
" 20 We are also subject to other international trade agreements, such as the U.S.-Mexico-Canada Agreement, the Central American Free Trade Agreement, the U.S.-Peru Free Trade Agreement, the U.S.-Jordan Free Trade Agreement, the U.S.-Korea Free Trade Agreement and other special trade preference programs. A portion of our imported products are eligible for certain of these duty-advantaged programs.
" We are also subject to other international trade agreements, such as the U.S.-Mexico-Canada Agreement, the Central American Free Trade Agreement, the U.S.-Peru Free Trade Agreement, the U.S.-Jordan Free Trade Agreement, the U.S.-Korea Free Trade Agreement and other special trade preference programs. A portion of our imported products are eligible for certain of these duty-advantaged programs.
Women's fragrance products are sold under our Ralph Lauren Collection, Woman by Ralph Lauren, Romance Collection, and Ralph Collection. Men's fragrance products are sold under our Polo Blue, Ralph's Club, Purple Label, Polo Red, Polo Green, Polo Black, Safari, Polo Sport, and Big Pony Men's brands.
Women's fragrance products are sold under our Ralph Lauren Collection, Woman by Ralph Lauren, Romance Collection, and Ralph Collection. Men's fragrance products are sold under our Ralph's Club, Purple Label, Polo Blue, Polo Red, Polo Green, Polo Black, Polo 67, Safari, Polo Sport, and Big Pony Men's brands.
We also partner closely with our pure-play customers on marketing content and events, as well as optimizing search and other data analyses to drive higher traffic and conversion for our brands. 14 In connection with our digital commerce operations, we engage consumers through various digital and social media platforms, which are supported through our collaboration with influencers who have an authentic connection to our brand.
We also partner closely with our pure-play customers on marketing content and events, as well as optimizing search and other data analyses to drive higher traffic and conversion for our brands. 13 In connection with our digital commerce operations, we engage consumers through various digital and social media platforms, which are supported through our collaboration with influencers who have an authentic connection to our brand.
We compete primarily on the basis of fashion, quality, value, and service, which depend on our ability to: • anticipate and respond in a timely fashion to changing consumer demands and shopping preferences, including the ever-increasing shift to digital brand engagement, social media communications, and online and cross-channel shopping; • create and maintain favorable brand recognition, loyalty, and a reputation for quality, including through digital brand engagement and online and social media presence; • develop and produce innovative, high-quality products in sizes, colors, and styles that appeal to consumers of varying age groups; • competitively price our products and create an acceptable value proposition for consumers, including price increases to mitigate inflationary pressures while simultaneously balancing the risk of lower consumer demand in response to any such price increases; • provide strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in order to stay better connected to consumers; • establish relationships with athletes, musicians, influencers, and other celebrities to promote our brands and products; • provide attractive, reliable, secure, and user-friendly digital commerce sites; • adapt to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; • obtain sufficient retail floor space and effectively present our products to consumers; • attract consumer traffic to stores, shop-within-shops, and digital commerce sites; • source sustainable and traceable raw materials at cost-effective prices; • anticipate and maintain proper inventory levels; • ensure product availability and optimize supply chain and distribution efficiencies; • maintain and grow market share; • recruit and retain employees to operate our retail stores, distribution centers, and various corporate functions; • protect our intellectual property; and • withstand prolonged periods of adverse economic conditions or business disruptions.
We compete primarily on the basis of timeless style, quality, value, and service, which depend on our ability to: • anticipate and respond in a timely fashion to changing consumer demands and shopping preferences, including the ever-increasing shift to digital brand engagement, social media communications, and online and cross-channel shopping; • create and maintain favorable brand recognition, loyalty, and a reputation for quality, including through digital brand engagement and online and social media presence; • develop and produce innovative, high-quality products in sizes, colors, and styles that appeal to consumers of varying demographics, including age; • competitively price our products and create a compelling value proposition for consumers, including price increases to mitigate inflationary pressures while simultaneously balancing the risk of lower consumer demand in response to any such price increases; • provide strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in order to stay better connected to consumers; • establish relationships with athletes, musicians, influencers, and other celebrities to promote our brands and products; • provide attractive, reliable, secure, and user-friendly digital commerce sites; • adapt to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; • obtain sufficient retail floor space and effectively present our products to consumers; • attract consumer traffic to stores, shop-within-shops, and digital commerce sites; • source sustainable and traceable raw materials at cost-effective prices; • anticipate and maintain proper inventory levels; • ensure product availability and optimize supply chain and distribution efficiencies; • maintain and grow market share; • recruit and retain employees to operate our retail stores, distribution centers, and various corporate functions; • protect our intellectual property; and • withstand prolonged periods of adverse economic conditions or business disruptions.
See Item 1A — " Risk Factors — Risks Related to our Business and Operations — A substantial portion of our revenue is derived from a limited number of large wholesale customers.
See Item 1A — " Risk Factors — Risks Related to our Business and Operations 17 — A substantial portion of our revenue is derived from a limited number of large wholesale customers.
Pink Pony is available at select Polo and Ralph Lauren stores and online at our Ralph Lauren digital commerce sites, including RalphLauren.com. Pink Pony is also available at select Macy's stores and online at Macys.com. 3. Lauren Ralph Lauren — Our Lauren group includes: Lauren Ralph Lauren.
Pink Pony is available at select Ralph Lauren stores and online at our Ralph Lauren digital commerce sites, including RalphLauren.com. Pink Pony is also available at select Macy's stores and online at Macys.com. 3. Lauren Ralph Lauren — Our Lauren group includes: Lauren Ralph Lauren.
We may share in the cost of building out certain of these shop-within-shops with our department store partners. 11 Directly-Operated Digital Commerce Websites In addition to our stores, our retail business sells products online in North America, Europe, and Asia through our various directly-operated digital commerce sites, which include www.RalphLauren.com, among others.
We may share in the cost of building out certain of these shop-within-shops with our department store partners. 10 Directly-Operated Digital Commerce Websites In addition to our stores, our retail business sells products online in North America, Europe, and Asia through our various directly-operated digital commerce sites, which include www.RalphLauren.com, among others.
Procedures have been implemented under our vendor certification and compliance programs so that quality assurance is reviewed early in the production process, allowing merchandise to be received at the distribution facilities and shipped to customers with minimal interruption. 16 Competition Competition is very strong in the segments of the fashion and consumer product industries in which we operate.
Procedures have been implemented under our vendor certification and compliance programs so that quality assurance is reviewed early in the production process, allowing merchandise to be received at the distribution facilities and shipped to customers with minimal interruption. 15 Competition Competition is very strong in the segments of the fashion and consumer product industries in which we operate.
See Item 1A — " Risk Factors — Risks Related to our Business and Operations — We face intense competition worldwide in the markets in which we operate ." 17 Distribution To facilitate global distribution, our products are shipped from manufacturers to a network of distribution centers around the world for inspection, sorting, packing, and delivery to our retail locations and digital commerce and wholesale customers.
See Item 1A — " Risk Factors — Risks Related to our Business and Operations — We face intense competition worldwide in the markets in which we operate ." 16 Distribution To facilitate global distribution, our products are shipped from manufacturers to a network of distribution centers around the world for inspection, sorting, packing, and delivery to our retail locations and digital commerce and wholesale customers.
Other trademarks that we own include: • PURPLE LABEL; • DOUBLE RL; • RRL & DESIGN; • RLX; • RL; • LAUREN RALPH LAUREN; • PINK PONY; • LAUREN; • RALPH; • POLO BEAR; 19 • CHAPS; and • Various other trademarks. Mr.
Other trademarks that we own include: • PURPLE LABEL; • DOUBLE RL; • RRL & DESIGN; • RLX; • RL; • LAUREN RALPH LAUREN; • PINK PONY; • LAUREN; • RALPH; • POLO BEAR; • CHAPS; and • Various other trademarks. Mr.
We also provide point-of-sale fixtures and signage to our wholesale customers to enhance the presentation of our products at their retail locations. In addition, when our licensing partners are required to spend an amount equal to a percentage of their licensed product sales on advertising, in certain cases we coordinate the advertising placement on their 15 behalf.
We also provide point-of-sale fixtures and signage to our wholesale customers to enhance the presentation of our products at their retail locations. In addition, when our licensing partners are required to spend an amount equal to a percentage of their licensed product sales on advertising, in certain cases we coordinate the advertising placement on their 14 behalf.
In addition to generating sales of our products, our worldwide Ralph Lauren stores establish, reinforce, and capitalize on the image of our brands. Our Ralph Lauren stores range in size from approximately 500 to 37,900 square feet. Outlet Stores We extend our reach to additional consumer groups through our outlet stores worldwide, which are principally located in major outlet centers.
In addition to generating sales of our products, our worldwide Ralph Lauren stores establish, reinforce, and capitalize on the image of our brands. Our Ralph Lauren stores range in size from approximately 400 to 37,900 square feet. Outlet Stores We extend our reach to additional consumer groups through our outlet stores worldwide, which are principally located in major outlet centers.
Ryder Cup Team, as well as a partner of the American Junior Golf Association. We sponsor a roster of professional golfers, including Billy Horschel, Andrea Lee, Doc Redman, Lilia Vu, Trevor Werbylo, Devon Bling, Nick Watney, Smylie Kaufman, Tom Watson, Davis Love III, and Jonathan Byrd.
Ryder Cup Team, as well as a partner of the American Junior Golf Association. We sponsor a roster of professional golfers, including Billy Horschel, Andrea Lee, Doc Redman, Trevor Werbylo, Devon Bling, Smylie Kaufman, Tom Watson, Davis Love III, Jonathan Byrd, and Nick Watney.
To this end, we are committed to creating a culture and work environment in which all employees feel welcome and can thrive, both as individuals and as part of our team. Our Board of Directors regularly reviews our people and development strategy, including our employee diversity, equity, and inclusion initiatives.
To this end, we are committed to creating a culture and work environment in which all employees feel welcome and can thrive, both as individuals and as part of our team. Our Board of Directors regularly reviews our people and development strategy, including our employee diversity, equity, and inclusion ("DE&I") initiatives.
No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 2% of our Fiscal 2023 net revenues, which primarily consist of Ralph Lauren and Chaps branded royalty revenues earned through our global licensing alliances.
No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 2% of our Fiscal 2024 net revenues, which primarily consist of Ralph Lauren and Chaps branded royalty revenues earned through our global licensing alliances.
Leased Toronto, Ontario Canada Third-party Parma, Italy Europe and Latin America Third-party Yokohama, Japan Japan Third-party Bugok, South Korea South Korea Leased Tuen Mun, Hong Kong China and Southeast Asia (a) Third-party (a) Includes Australia, China, Hong Kong, India, Macau, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.
Leased Toronto, Ontario Canada Third-party Parma, Italy Europe and Latin America Third-party Yokohama, Japan Japan Third-party Bugok, South Korea South Korea Leased Tuen Mun, Hong Kong China and Southeast Asia (a) Third-party (a) Includes Australia, Cambodia, China, Hong Kong, Macau, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.
We are also continuing to evolve our cultural awareness training. 4. Communication and Messaging — Maximize our inclusive message and increase the transparency of our DE&I initiatives. We gather direct feedback from our employees and measure their engagement to better understand how we can improve. 5.
We are also continuing to evolve our cultural awareness training. 4. Communication and Messaging — Optimize our inclusive message and increase the transparency of our DE&I initiatives. We gather direct feedback from our employees and measure their engagement to better understand how we can improve. 5.
Ralph Lauren's global hospitality collection is comprised of our restaurants including The Polo Bar in New York City, RL Restaurant located in Chicago, Ralph's located in Paris, The Bar at Ralph Lauren located in Milan, and our Ralph's Coffee concept in various cities around the world.
Ralph Lauren's global hospitality collection is comprised of our restaurants including The Polo Bar in New York City, RL Restaurant located in Chicago, Ralph's located in Paris, The Bar at Ralph Lauren located in Milan, Ralph's Bar located in Chengdu, China, and our Ralph's Coffee concept in various cities around the world.
Additionally, we advertise in consumer and trade publications, and participate in cooperative advertising on a shared cost basis with some of our retail and licensing partners. We have outdoor advertising placements in key cities as well, focusing on impact and reach.
Additionally, we advertise in consumer and trade publications, and participate in cooperative advertising on a shared cost basis with some of our wholesale and licensing partners. We have outdoor advertising placements in key cities as well, focusing on impact and reach.
David Lauren Age 51 Mr. David Lauren has been our Chief Branding and Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board since April 2022. He served as our Chief Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board from October 2016 to March 2022.
David Lauren Age 52 Mr. David Lauren has been our Chief Branding and Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board since April 2022. He served as our Chief Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board from October 2016 to March 2022.
Our Brands and Products Our products, which include apparel, footwear & accessories, and fragrance collections for men and women, as well as childrenswear and home, together with our hospitality portfolio, comprise one of the most widely recognized families of consumer brands.
Our Brands and Products Our products, which include apparel and footwear & accessories for men, women, and children, as well as our fragrance and home collections, together with our hospitality portfolio, comprise one of the most widely recognized families of consumer brands.
(global) Socks and Hosiery Renfro Corporation Home Utility and Blankets Hollander Sleep & Decor Lighting Visual Comfort of America LLC (global) International Licensing Our international licensing partners acquire the right to sell, promote, market, and/or distribute various categories of our products in a given geographic area and source products from us, our product licensing partners, and/or independent sources.
(global) Socks and Hosiery Renfro Corporation Home Utility and Blankets Keeco (by acquisition of Hollander Sleep & Decor) Lighting Visual Comfort of America LLC (global) International Licensing Our international licensing partners acquire the right to sell, promote, market, and/or distribute various categories of our products in a given geographic area and source products from us, our product licensing partners, and/or independent sources.
In this regard, for North America, in situations that make one feel unsafe, but do not warrant a call to 911, we launched a new program — Bond — making available the services of a security professional by an employee's side through an application, monitoring them and standing by to respond within seconds using voice, video, and chat.
In this regard, for North America, in situations that make one feel unsafe, but do not warrant a call to 911, we have in place a program — Bond — making available the services of a security professional by an employee's side through an application, monitoring them and standing by to respond within seconds using voice, video, and chat.
Lauren is the son of Mr. R. Lauren. 24 Halide Alagöz Age 51 Ms. Alagöz joined the Company as the Corporate Senior Vice President of Global Manufacturing and Sourcing in 2016. She has been our Chief Product Officer since March 2021. Ms.
Lauren is the son of Mr. R. Lauren. Halide Alagöz Age 52 Ms. Alagöz joined the Company as the Corporate Senior Vice President of Global Manufacturing and Sourcing in 2016. She has been our Chief Product Officer since March 2021. Ms.
We also continue to scale and expand our Connected Retail capabilities to enhance the consumer experience, which now include virtual selling appointments, Buy Online-Ship from Store, Buy Online-Pick Up in Store, and mobile checkout and contactless payments, among other capabilities.
We also continue to scale and expand our Connected Retail capabilities to enhance the consumer experience, which include virtual selling appointments, Endless Aisle, Buy Online-Ship from Store, Buy Online-Pick Up in Store, and mobile checkout and contactless payments, among other capabilities.
In addition, we utilize virtual showrooms, allowing our customers to experience and discover our product assortments in a retail setting remotely. 12 Shop-within-Shops.
In addition, we utilize virtual showrooms, allowing our customers to experience and discover our product assortments in a retail setting remotely. 11 Shop-within-Shops.
Our wholesale business in Europe is comprised primarily of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital partners. • Asia — Our Asia segment, representing approximately 22% of our Fiscal 2023 net revenues, primarily consists of sales of our Ralph Lauren branded apparel, footwear & accessories, home, and related products made through our retail and wholesale businesses in Asia, Australia, and New Zealand.
Our wholesale business in Europe is comprised primarily of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital and licensee partners. • Asia — Our Asia segment, representing approximately 24% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded apparel, footwear & accessories, home, and related products made through our retail and wholesale businesses in Asia, Australia, and New Zealand.
Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores. • Europe — Our Europe segment, representing approximately 29% of our Fiscal 2023 net revenues, primarily consists of sales of our Ralph Lauren branded apparel, footwear & accessories, home, and related products made through our retail and wholesale businesses in Europe and emerging markets.
Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores. • Europe — Our Europe segment, representing approximately 30% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded apparel, footwear & accessories, home, and related products made through our retail and wholesale businesses in Europe and emerging markets.
Louvet also serves on the board of trustees of the Hospital of Special Surgery and recently joined the board of directors of Danone in April 2022. He is also on the CEO Advisory Council of the Fashion Pact, a coalition committed to advancing environmental sustainability in the fashion and textile industries. Jane Hamilton Nielsen Age 59 Ms.
Louvet also serves on the board of trustees of the Hospital of Special Surgery and joined the board of directors of Danone in April 2022. He is also on the CEO Advisory Council of the Fashion Pact, a coalition committed to advancing environmental sustainability in the fashion and textile industries. 22 Jane Hamilton Nielsen Age 60 Ms.
Merchandise is also available through our wholesale distribution channels at over 9,000 doors worldwide, the majority in specialty stores, as well as through the digital commerce sites of many of our wholesale customers. In addition to our directly-operated stores and shops, our international licensing partners operate 182 stores and shops.
Merchandise is also available through our wholesale distribution channels at over 9,600 doors worldwide, the majority in specialty stores, as well as through the digital commerce sites of many of our wholesale customers. In addition to our directly-operated stores and shops, our international licensing partners operate 195 stores and shops.
Polo Ralph Lauren Children can be found in select Polo and Ralph Lauren stores around the world, better department stores, and online at our Ralph Lauren digital commerce sites, including RalphLauren.com, as well as certain of our retailer partner digital commerce sites. RLX Ralph Lauren. RLX is the leading edge of Ralph Lauren's performance and activewear.
Polo Ralph Lauren Children can be found in select Ralph Lauren stores around the world, better department stores, and online at our Ralph Lauren digital commerce sites, including RalphLauren.com, as well as certain of our retail partners' digital commerce sites. RLX Ralph Lauren. RLX is the leading edge of Ralph Lauren's performance and activewear.
Our global reach is extensive, as we sell directly to customers throughout the world via our 553 retail stores and 722 concession-based shop-within-shops, as well as through our own digital commerce sites and those of various third-party digital partners.
Our global reach is extensive, as we sell directly to customers throughout the world via our 564 retail stores and 699 concession-based shop-within-shops, as well as through our own digital commerce sites and those of various third-party digital partners.
Approximately 53% of our Fiscal 2023 net revenues were earned outside of the U.S. See Note 20 to the accompanying consolidated financial statements for a summary of net revenues and operating income by segment, as well as net revenues and long-lived assets by geographic location.
Approximately 55% of our Fiscal 2024 net revenues were earned outside of the U.S. See Note 20 to the accompanying consolidated financial statements for a summary of net revenues and operating income by segment, as well as net revenues and long-lived assets by geographic location.
As of the end of Fiscal 2023, our wholesale products were sold through over 9,000 doors worldwide, with the majority in specialty stores. Our products are also increasingly being sold through the digital commerce sites of many of our traditional wholesale customers and our third-party digital partners.
As of the end of Fiscal 2024, our wholesale products were sold through over 9,600 doors worldwide, with the majority in specialty stores. Our products are also increasingly being sold through the digital commerce sites of many of our traditional wholesale customers and our third-party digital partners.
All products are produced according to our specifications and standards. Production and quality control staff in Asia, the Americas, the Middle East, and Europe monitor manufacturing at supplier facilities in order to correct problems prior to shipment of the final product.
All products are produced according to our specifications and standards. Production and quality control staff in Asia and Europe, together with our quality control service providers in the Americas and the Middle East, monitor manufacturing at supplier facilities in order to correct problems prior to shipment of the final product.
Our retail business in Asia is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. In addition, we sell our products online through various third-party digital partner commerce sites. Our wholesale business in Asia is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
Our retail business in Asia is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. In addition, we sell our products online through various third-party digital partner commerce sites. Our wholesale business in Asia is comprised primarily of sales to department stores and various third-party digital and licensee partners.
Our digital ecosystem is comprised of directly-operated platforms, wholesale partner websites, third-party digital pure players, social commerce, and virtual economy platforms. Our directly-operated digital commerce sites represent our digital flagships, featuring the most elevated expression of our brands.
Our digital ecosystem is comprised of directly-operated platforms, wholesale partner websites, third-party digital pure players, social commerce, and third-party mixed reality platforms. Our directly-operated digital commerce sites represent our digital flagships, featuring the most elevated expression of our brands.
She also serves on the board of directors of the American Apparel & Footwear Association since April 2018 and was confirmed as its Secretary for its 2023-2024 term in March 2023. Ms. Alagöz earned both her bachelor's degree in Industrial Engineering and her master's degree in Engineering Management from Istanbul Technical University.
She also serves on the board of directors of the American Apparel & Footwear Association since April 2018 and was confirmed as its Vice Chair for its 2024-2025 term in March 2024. Ms. Alagöz earned both her bachelor's degree in Industrial Engineering and her master's degree in Engineering Management from Istanbul Technical University. 23
During Fiscal 2023, we also expanded employee well-being services in the U.S. to include Gympass, a platform that offers resources to support one's body, mind, and mood, providing access to 12,000 fitness facilities nationwide at discounted prices, livestreamed group fitness classes, virtual personal training, and on-demand wellness partners providing fitness, meditations and mindfulness, mental health, and nutrition.
Our employee well-being services in the U.S. include Gympass, a platform that offers resources to support one's body, mind, and mood, providing access to 12,000 fitness facilities nationwide at discounted prices, livestreamed group fitness classes, virtual personal training, and on-demand wellness partners providing fitness, meditations and mindfulness, mental health, and nutrition.
In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce site, www.RalphLauren.com.
In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce sites, www.RalphLauren.com and www.RalphLauren.ca.
Our Retail Business Our retail business sells directly to customers throughout the world via our 553 retail stores and 722 concession-based shop-within-shops, totaling approximately 4.1 million and 0.7 million square feet, respectively, as well as through our own digital commerce sites and those of various third-party digital partners.
Our Retail Business Our retail business sells directly to customers throughout the world via our 564 retail stores and 699 concession-based shop-within-shops, totaling approximately 4.2 million and 0.7 million square feet, respectively, as well as through our own digital commerce sites and those of various third-party digital partners.
Our system applications are connected to support the flow of information across functions, including: • product design, sourcing, and production; • comprehensive order processing, fulfillment, and distribution; • retail store and digital commerce operations; • marketing and advertising; • financial accounting and management reporting; and • human resources.
Our system applications are connected to support the flow of information across functions, including (i) product design, sourcing, and production; (ii) comprehensive order processing, fulfillment, and distribution; (iii) retail store and digital commerce operations; (iv) marketing and advertising; (v) financial accounting and management reporting; and (vi) human resources.
International licensees' rights may include the right to own and operate retail stores. As of April 1, 2023, our international licensing partners operated 182 stores and shops. Digital Ecosystem Investing in our digital ecosystem remains a primary focus and is a key component of our integrated global omni-channel strategy that spans across owned and partnered channels, both physical and digital.
International licensees' rights may include the right to own and operate retail stores. As of March 30, 2024, our international licensing partners operated 195 stores and shops. Digital Ecosystem Investing in our digital ecosystem remains a primary focus and is a key component of our integrated global omni-channel strategy that spans across owned and partnered channels, both physical and digital.
Sleepwear Charles Komar and Sons, Inc. (includes Europe and the Middle East) Intimates and Sleepwear Delta Galil (global) Chaps 5 Star Apparel LLC (includes South America and South Korea) Beauty Products Fragrances, Cosmetics, and Skin Care L'Oreal S.A. (global) Footwear Men's and Women's Slippers and Children's Footwear BBC International LLC (global) Accessories Eyewear Luxottica Group S.p.A.
(includes Europe and the Middle East) Intimates and Sleepwear Delta Galil (global) Chaps 5 Star Apparel LLC (includes South America and South Korea) Beauty Products Fragrances, Personal Care L'Oreal S.A. (global) Footwear Men's and Women's Slippers and Children's Footwear BBC International LLC (global) Accessories Eyewear Luxottica Group S.p.A.
As we continue to ensure employees can access benefits information easily and in real-time, as well as finding new ways to communicate with our retail population, we have recently launched a flexible benefits platform in the United Kingdom, Benify, and plan to extend the program to more countries in the future.
As we continue to ensure employees can access benefits information easily and in real-time, as well as finding new ways to communicate with our retail employees, we have recently expanded our flexible benefits platform in the United Kingdom to include Switzerland, and plan to extend the program to more countries in the future.
Our range of home products includes bed and bath lines, furniture, fabric and wallcoverings, lighting, tabletop, kitchen linens, floor coverings, and giftware. • Hospitality — Continuing to engage our consumers with experiential and unique expressions of the brand, our hospitality portfolio is a natural extension of the World of Ralph Lauren as expressed through the culinary arts.
Our range of home products includes bed and bath lines, furniture, fabric and wall coverings, lighting, dining, floor coverings, and giftware, among others. • Hospitality — Continuing to engage our consumers with experiential and unique expressions of the brand, our hospitality portfolio is a natural extension of the World of Ralph Lauren as expressed through the culinary arts.
Our worldwide outlet stores offer selections of our apparel, footwear & accessories, and fragrances. In addition to these product offerings, certain of our worldwide outlet stores offer watches and home product assortments. During Fiscal 2023, we opened 28 new outlet stores and closed 13 stores.
Our worldwide outlet stores offer selections of our apparel, footwear & accessories, and fragrances. In addition to these product offerings, certain of our worldwide outlet stores offer watches and home product assortments. During Fiscal 2024, we opened 5 new outlet stores and closed 17 stores.
We continue to expand accessibility to our digital flagships globally while localizing language, currencies, payment methods, product assortments, and content. We also sell our products online through various third-party digital partner commerce sites, primarily in Asia, as well as through our mobile app in North America.
We continue to expand accessibility to our digital flagships globally while localizing language, currencies, payment methods, product assortments, and content. We also sell our products online through various third-party digital partner commerce sites, primarily in Asia, as well as through our Ralph Lauren app in the U.S.
For men, Ralph Lauren Purple Label is the ultimate expression of luxury for the modern gentleman. Refined suitings are hand-tailored, including custom made-to-measure suits crafted in the time-honored traditions of Savile Row. Purple Label's sophisticated sportswear is designed with a meticulous attention to detail, capturing the elegance and ease of Ralph Lauren's signature, timeless style.
Refined suitings are hand-tailored, including custom made-to-measure suits crafted in the time-honored traditions of Savile Row. Purple Label's sophisticated sportswear is designed with a meticulous attention to detail, capturing the elegance and ease of Ralph Lauren's signature, timeless style.
We perform a broader range of services for most of our Ralph Lauren Home licensing partners than we do for our other licensing partners, including design, operating showrooms, marketing, and advertising. 13 The following table lists our largest licensing agreements as of April 1, 2023 for the product categories presented.
We perform a broader range of services for most of our Ralph Lauren Home licensing partners than we do for our other licensing partners, including design, operating showrooms, marketing, and advertising. 12 The following table lists our largest licensing agreements as of March 30, 2024 for the product categories presented.
As of April 1, 2023, our wholesale business served approximately 100 third-party digital partners, primarily in Europe. We have three key wholesale customers that generate significant sales volume. During Fiscal 2023, sales to our three largest wholesale customers accounted for approximately 16% of our total net revenues.
As of March 30, 2024, our wholesale business served approximately 100 third-party digital partners, primarily in Europe. We have three key wholesale customers that generate significant sales volume. During Fiscal 2024, sales to our three largest wholesale customers accounted for approximately 13% of our total net revenues.
Except as noted in the table, these product licenses cover North America only. Category Licensed Products Licensing Partners Men's Apparel Underwear and Sleepwear Hanesbrands, Inc. (includes Japan) Lauren, Ralph, and Chaps Tailored Clothing Peerless Clothing International, Inc. Chaps 5 Star Apparel LLC (includes South America and South Korea) Women's Apparel Outerwear S. Rothschild & Co., Inc.
Except as noted in the table, these product licenses cover North America only. Category Licensed Products Licensing Partners Men's Apparel Underwear and Sleepwear Hanesbrands, Inc. (includes Japan) Chaps 5 Star Apparel LLC (includes South America and South Korea) Women's Apparel Outerwear S. Rothschild & Co., Inc. Sleepwear Charles Komar and Sons, Inc.
Refer to "Recent Developments" for additional discussion regarding the disposition of our former Club Monaco business, as well as the transition of our Chaps business to a fully licensed business model. This segment structure is consistent with how we establish our overall business strategy, allocate resources, and assess performance of our Company.
See Note 9 to the accompanying consolidated financial statements for additional discussion regarding the disposition of our former Club Monaco business, as well as the transition of our Chaps business to a fully licensed business model. This segment structure is consistent with how we establish our overall business strategy, allocate resources, and assess performance of our Company.
Lauren Home collection includes accessibly-priced, timeless bath and bedding collections, as well as kitchen linens, floorcoverings, and lighting. The collection is built upon an assortment of essentials that is designed to be mixed with seasonal updates, all rooted in the brand's classic style. 4.
Lauren Home collection includes accessibly-priced, timeless bath and bedding collections, as well as fabric and wall coverings, lighting, dining, and floor coverings, among others. The collection is built upon an assortment of essentials that is designed to be mixed with seasonal updates, all rooted in the brand's classic style. 4.
During Fiscal 2023, we opened 44 new Ralph 10 Lauren stores and closed 10 stores. Our Ralph Lauren stores are primarily situated in major upscale street locations and upscale regional malls, generally in large urban markets.
During Fiscal 2024, we opened 34 new Ralph 9 Lauren stores and closed 11 stores. Our Ralph Lauren stores are primarily situated in major upscale street locations and upscale regional malls, generally in large urban markets.
During Fiscal 2023, we introduced Polo Earth, a gender-neutral fragrance designed with sustainability in mind, made of 97% natural-origin ingredients. 7 • Home — Our home collections, which are sold under our Ralph Lauren, Polo, Lauren by Ralph Lauren, and Chaps brands, reflect the spirit of the Ralph Lauren lifestyle.
Our fragrance offerings also include Polo Earth, a gender-neutral fragrance designed with sustainability in mind, made of 97% natural-origin ingredients. • Home — Our home collections, which are sold primarily under our Ralph Lauren, Polo, Lauren by Ralph Lauren, and Chaps brands, reflect the spirit of the Ralph Lauren lifestyle.
We have been controlled by the Lauren family since the founding of our Company. As of April 1, 2023, Mr. R. Lauren, or entities controlled by the Lauren family, held approximately 86% of the voting power of the Company's outstanding common stock.
We have been controlled by the Lauren family since the founding of our Company. As of March 30, 2024, Mr. R. Lauren, or entities controlled by the Lauren family, held approximately 84% of the voting power of the Company's outstanding common stock.
Worldwide Wholesale Distribution Channels The following table presents by segment the number of wholesale doors in our primary channels of distribution as of April 1, 2023: Doors North America 3,324 Europe 5,339 Asia 612 Total 9,275 In addition to our conventional wholesale doors, our products are increasingly being sold through the websites of many of our traditional wholesale customers, as well as those of our third-party digital partners.
Worldwide Wholesale Distribution Channels The following table presents by segment the number of wholesale doors in our primary channels of distribution as of March 30, 2024: Doors North America 3,329 Europe 5,547 Asia 802 Total 9,678 In addition to our conventional wholesale doors, our products are increasingly being sold through the websites of many of our traditional wholesale customers, as well as those of our third-party digital partners.
The following table presents the number of concession-based shop-within-shops by segment as of April 1, 2023: Concession-based Shop-within-Shops North America 1 Europe 29 Asia 692 Total (a) 722 (a) Our concession-based shop-within-shops were located at approximately 315 retail locations. The size of our concession-based shop-within-shops ranges from approximately 100 to 4,700 square feet.
The following table presents the number of concession-based shop-within-shops by segment as of March 30, 2024: Concession-based Shop-within-Shops North America 1 Europe 27 Asia 671 Total (a) 699 (a) Our concession-based shop-within-shops were located at approximately 300 retail locations. The size of our concession-based shop-within-shops ranges from approximately 100 to 4,700 square feet.
We offer a wide array of both employer-paid and employee-paid benefits to support our employees' overall financial, physical, and mental well-being, including, but not limited to, healthcare and welfare benefits, retirement savings, paid time off, temporary leave, sabbaticals, and flexible work arrangements.
We offer a wide array of both employer-paid and employee-paid benefits to support our employees' overall financial, physical, and mental well-being, including, but not limited to, healthcare and welfare benefits, retirement savings, paid time off, temporary leave, sabbaticals, and flexible work arrangements. We understand that everyone has unique needs when it comes to caring for and growing their families.
Polo Ralph Lauren Children is designed to reflect the timeless heritage and modern spirit of Ralph Lauren's collections for men and women. Signature classics include iconic polo knit shirts and luxurious cashmere cable-knit sweaters. Polo Ralph Lauren Children is available in a full range of sizes, from baby to girls 2-16 and boys 2-20.
Signature classics include iconic polo knit shirts and luxurious cashmere cable-knit sweaters. Polo Ralph Lauren Children is available in a full range of sizes, from baby to girls 2-16 and boys 2-20.
Our diversity, equity, and inclusion ("DE&I") strategy is guided by the following five pillars: 1. Talent — Ensure that fostering a culture of inclusion and belonging is a priority company-wide, resulting in the cultivation of diverse teams and elevation of underrepresented talent to leadership ranks.
Our DE&I strategy is guided by the following five pillars: 1. Talent — Ensure that fostering a culture of inclusion and belonging is a priority company-wide, resulting in the cultivation of diverse teams and elevation of underrepresented talent to leadership ranks. Throughout Fiscal 2024, we continued to maintain gender parity in our leadership ranks for Vice President and above.
The following table presents the number of Ralph Lauren stores by segment as of April 1, 2023: Ralph Lauren Stores North America 48 Europe 43 Asia 118 Total 209 Our 9 flagship Ralph Lauren regional store locations showcase our iconic styles and products and demonstrate our most refined merchandising techniques.
The following table presents the number of Ralph Lauren stores by segment as of March 30, 2024: Ralph Lauren Stores North America 50 Europe 44 Asia 138 Total 232 Our 9 flagship Ralph Lauren regional store locations showcase our iconic styles and products and demonstrate our most refined merchandising techniques.
All of our employee learning and development programs aim to promote our Ralph Lauren Success Drivers — the key attributes, skills, ways of thinking, and behaviors that ultimately create conditions that better enable individuals and teams to succeed. Specific to DE&I education, we continued to focus on inclusive leadership by rolling out a new "includership" program globally during Fiscal 2023.
All of our employee learning and development programs aim to promote our Ralph Lauren Success Drivers — the key attributes, skills, ways of thinking, and behaviors that ultimately create conditions that better enable individuals and teams to succeed. Specific to DE&I education, we have in place a global "includership" program.
The following table presents the number of outlet stores by segment as of April 1, 2023: Outlet Stores North America 189 Europe 61 Asia 94 Total 344 Our outlet stores range in size from approximately 1,000 to 28,300 square feet.
The following table presents the number of outlet stores by segment as of March 30, 2024: Outlet Stores North America 180 Europe 59 Asia 93 Total 332 Our outlet stores range in size from approximately 1,000 to 28,300 square feet.
Chaps — Chaps celebrates real American style, delivering classic collections updated for modern lifestyles for men, women, children and home. The modern lifestyle collection offers versatile sportswear, workday essentials, tailored clothing, and occasion dresses that are wearable from season to season. Chaps is available in select department stores and retail partner digital commerce sites across the U.S., Canada, and Mexico.
Chaps — Chaps celebrates real American style, delivering classic collections updated for modern lifestyles for men, women, children and home. The modern lifestyle collection offers versatile sportswear, workday essentials, tailored clothing, and occasion dresses that are wearable from season to season.
During Fiscal 2023, we launched a new framework, shifting to a more customized approach to ensure accessibility for employees worldwide. Formerly called Employee Resource Groups, our newly renamed Employee Impact Groups ("EIGs") harness the talent and passion of our employees from around the world to help create an inclusive and diverse company culture, as well as learning and engagement opportunities.
We have a roadmap designed to deliver a customized approach to ensure accessibility for employees worldwide. Our Employee Impact Groups ("EIGs") harness the talent and passion of our employees from around the world to help create an inclusive and diverse company culture, as well as learning and engagement opportunities.
Over 300 different manufacturers worldwide produce our apparel, footwear & accessories, and home products, with no one manufacturer providing more than 4% of our total production during Fiscal 2023. We source both finished products and raw materials. Raw materials include fabric, buttons, and other trim. Finished products consist of manufactured and fully assembled products ready for shipment to our customers.
Over 300 different manufacturers worldwide produce our apparel, footwear & accessories, and home products, with no one manufacturer providing more than 5% of our total products (by dollar value) during Fiscal 2024. We source both finished products and raw materials. Raw materials include fabric, buttons, and other trim.
The following table presents by segment the number of shop-within-shops in our primary channels of distribution as of April 1, 2023: Shop-within-Shops North America 7,060 Europe 6,739 Asia 893 Total 14,692 The size of our shop-within-shops ranges from approximately 80 to 9,200 square feet.
The following table presents by segment the number of shop-within-shops in our primary channels of distribution as of March 30, 2024: Shop-within-Shops North America 6,811 Europe 7,206 Asia 1,068 Total 15,085 The size of our shop-within-shops ranges from approximately 65 to 9,200 square feet.
In Fiscal 2023, approximately 96% of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 19% of our products sourced from China and 18% from Vietnam.
Finished products consist of manufactured and fully assembled products ready for shipment to our customers. In Fiscal 2024, approximately 96% of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 19% of our products sourced from Vietnam and 15% from China.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks inherent in importing our products include (i) changes in social, political, and economic conditions, including those resulting from military conflicts, terrorist acts, or other hostilities, that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located; (ii) pandemic diseases, such as COVID-19, which could result in closed factories, reduced workforces, scarcity of raw materials, port congestion, and scrutiny or embargoing of goods 31 produced in infected areas; (iii) changes in diplomatic and trade relationships, including the imposition of any sanctions, restrictions, and other responses, including those issued by the U.S. and other countries against Russia, or any other countries, in response to Russia's war with Ukraine; (iv) the imposition of additional regulations, quotas, trade sanctions, or safeguards relating to imports or exports, and costs of complying with such regulations and other laws relating to the identification and reporting of the sources of raw materials used in our products, which could lead to the detention, exclusion, or seizure of goods and imposition of monetary penalties and fines; (v) the imposition of additional duties, tariffs, taxes, and other charges on imports or exports; (vi) unfavorable changes in the availability, cost, or quality of raw materials and commodities; (vii) increases in the cost of labor, travel, and transportation; (viii) disruptions of shipping and international trade caused by natural and man-made disasters, labor shortages (stemming from labor disputes, strikes, or otherwise), or other unforeseen events, including any resulting impact to shipping prices; (ix) heightened terrorism-related cargo and supply chain security concerns, which could subject imported or exported goods to additional, more frequent, or more thorough inspections, leading to delays in the delivery of cargo; and (x) decreased scrutiny by customs officials for counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures, and damage to the reputation of our brands.
Biggest changeRisks inherent in importing our products include (i) adverse changes in local economic conditions, such as prolonged periods of recession, high inflation, or other factors described herein; (ii) changes in social or political conditions, including those resulting from military conflicts, terrorist acts, or other hostilities, that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located; (iii) pandemic diseases, which could result in closed factories, reduced workforces, scarcity of raw materials, port congestion, and scrutiny or embargoing of goods produced in infected areas; (iv) changes in diplomatic and trade relationships, including the imposition of any sanctions, restrictions, and other responses, such as those issued by the U.S. and other countries against Russia in response to Russia's war with Ukraine; (v) the imposition of additional regulations, quotas, trade sanctions, or safeguards relating to imports or exports, and costs of complying with such regulations and other laws relating to the identification and reporting of the sources of raw materials used in our products, which could lead to the detention, exclusion, or seizure of goods and imposition of monetary penalties and fines; (vi) the imposition of additional duties, tariffs, taxes, and other charges on imports or exports; (vii) unfavorable changes in the availability, cost, or quality of raw materials and commodities; (viii) labor shortages within our supply chain resulting from labor disputes, strikes, or otherwise; (ix) increases in the cost of labor or transportation; (x) disruptions of shipping and international trade caused by natural and man-made disasters, severe weather (such as recent droughts impacting the passage way through the Panama canal), military conflicts, terrorist acts, or other hostilities (such as recent militant attacks on cargo vessels in the Red Sea), or other unforeseen events, including any resulting impact to shipping prices; (xi) heightened terrorism-related cargo and supply chain security concerns, which could subject imported or exported goods to additional, more frequent, or more thorough inspections, leading to delays in the delivery of cargo; and (xii) decreased scrutiny by customs officials for counterfeit goods, leading to lost sales, increased costs for our anti-counterfeiting measures, and damage to the reputation of our brands. 30 The entire apparel industry, including our Company, has faced, and could continue to face, supply chain challenges as a result of inflationary pressures, political instability, severe weather, military conflicts and other hostilities, pandemic diseases, and other factors, including reduced freight availability, port congestion, labor shortages, and rising wages and energy costs, among other factors.
The foreign currencies to which we are exposed to from a transactional and translational perspective primarily include the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, the Swiss Franc, and the Chinese Renminbi. The expansion of our international business increases our exposure to foreign currency exchange risk.
The foreign currencies to which we are exposed to from a transactional and translational perspective primarily include the Euro, the Japanese Yen, the British Pound Sterling, the South Korean Won, the Chinese Renminbi, the Canadian Dollar, the Swiss Franc, and the Australian Dollar. The expansion of our international business increases our exposure to foreign currency exchange risk.
Since we do not control third-party service providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future, any perceived or actual unauthorized disclosure of personally identifiable information regarding our employees, customers, or website visitors could harm our reputation and credibility, result in lost sales, impair our ability to attract website visitors, and/or reduce our ability to attract and retain employees and customers.
Since we do not control third-party service providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future, any perceived or actual unauthorized disclosure of personally identifiable information regarding our employees, customers, or website visitors could harm our reputation and credibility, result in lost sales, impair our ability to attract website visitors, and/or reduce our ability to attract and retain employees and 34 customers.
We are increasingly using digital and social media platforms to interact with customers and enhance their shopping 28 experience. If we are unable to develop and continuously improve our customer-facing technologies, the efforts of which typically require significant capital investments, we may not be able to provide a convenient and consistent experience to our customers regardless of the sales channel.
We are increasingly using digital and social media platforms to interact with customers and enhance their shopping experience. If we are unable to develop and continuously improve our customer-facing technologies, the efforts of which typically require significant capital investments, we may not be able to provide a convenient and consistent experience to our customers regardless of the sales channel.
The occurrence of natural disasters or other catastrophic events may result in sudden disruptions in the business operations of the local and regional economies affected, as well as the global economy as a whole, including, but not limited to, shortages and/or rising costs of raw materials or energy, public health issues, system failures, and reduced retail traffic.
The occurrence of natural disasters or other catastrophic events may result in sudden disruptions in the business operations of the local and regional economies affected, as well as the global economy as a 33 whole, including, but not limited to, shortages and/or rising costs of raw materials or energy, public health issues, system failures, and reduced retail traffic.
In addition, regardless of the outcome of any litigation or regulatory proceedings, such proceedings could result in substantial costs and may require our Company to devote substantial time and resources to defend itself. Further, changes in governmental regulations both in the U.S. and in other countries where we conduct business operations could have an adverse impact on our business.
In addition, regardless of the outcome of any litigation or regulatory proceedings, such proceedings could result in substantial costs and may require our Company to devote substantial time and resources to defend itself. Further, changes in governmental regulations both in the 37 U.S. and in other countries where we conduct business operations could have an adverse impact on our business.
Any failure on our part, or on the part of our third-party digital partners, to provide attractive, reliable, secure, and user-friendly digital commerce platforms, including mobile apps, could negatively impact our customers' shopping experience resulting in reduced website traffic, diminished loyalty to our brands, and lost sales.
Any failure on our part, or on the part of our third-party digital partners, to provide attractive, reliable, secure, and user-friendly digital commerce 26 platforms, including mobile apps, could negatively impact our customers' shopping experience resulting in reduced website traffic, diminished loyalty to our brands, and lost sales.
Given the rapidly evolving nature, sophistication, and complexity of cyber-attacks, despite our reasonable efforts to mitigate and prevent such attacks, it is possible that we may not be able to anticipate, prevent, detect, or implement effective preventive measures to protect against all cyber-attack incidents.
Given the rapidly evolving nature, sophistication, and complexity of cyber-attacks, despite our reasonable efforts to mitigate and prevent such attacks, it is possible that we may not be able to anticipate, prevent, timely detect, or implement effective preventive measures to protect against all cyber-attack incidents.
Furthermore, economic sanctions issued by one country against another, such as those recently issued by the U.S. and other countries against Russia in response to its war with Ukraine, could increase the risk of retaliatory state-sponsored cyber-attacks.
Furthermore, economic sanctions issued by one country against another, such as those issued by the U.S. and other countries against Russia in response to its war with Ukraine, could increase the risk of retaliatory state-sponsored cyber-attacks.
Any increased competition, or our failure to adequately address any of these competitive factors, could result in reduced market share or sales, which could adversely affect our business. The success of our business depends on our ability to retain the value and reputation of our brands.
Any increased competition, or our failure to adequately address any of these competitive factors, could result in reduced market share or sales, which could adversely affect our business. 29 The success of our business depends on our ability to retain the value and reputation of our brands.
We compete with these companies primarily on the basis of: (i) anticipating and responding in a timely fashion to changing consumer demands and shopping preferences, including the ever-increasing shift to digital brand engagement, social media communications, and online and cross-channel shopping; (ii) creating and maintaining favorable brand recognition, loyalty, and a reputation for quality, including through digital brand engagement and online and social media presence; (iii) developing and producing innovative, high-quality products in sizes, colors, and styles that appeal to consumers of varying age groups; (iv) competitively pricing our products and creating an acceptable value proposition for consumers, including price increases to mitigate inflationary pressures while simultaneously balancing the risk of lower consumer demand in response to any such price increases; (v) providing strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in order to stay better connected to consumers; (vi) establishing relationships with athletes, musicians, influencers, and other celebrities to promote our brands and products; (vii) providing attractive, reliable, secure, and user-friendly digital commerce sites; (viii) adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; (ix) obtaining sufficient retail floor space 30 and effective presentation of our products at stores and shop-within-shops; (x) attracting consumer traffic to stores, shop-within-shops, and digital commerce sites; (xi) sourcing sustainable and traceable raw materials at cost-effective prices; (xii) anticipating and maintaining proper inventory levels; (xiii) ensuring product availability and optimizing supply chain and distribution efficiencies with third-party manufacturers and retailers; (xiv) maintaining and growing market share; (xv) recruiting and retaining employees to operate our retail stores, distribution centers, and various corporate functions; (xvi) protecting our intellectual property; and (xvii) ability to withstand prolonged periods of adverse economic conditions or business disruptions.
We compete with these companies primarily on the basis of: (i) anticipating and responding in a timely fashion to changing consumer demands and shopping preferences, including the ever-increasing shift to digital brand engagement, social media communications, and online and cross-channel shopping; (ii) creating and maintaining favorable brand recognition, loyalty, and a reputation for quality, including through digital brand engagement and online and social media presence; (iii) developing and producing innovative, high-quality products in sizes, colors, and styles that appeal to consumers of varying demographics, including age; (iv) competitively pricing our products and creating a compelling value proposition for consumers, including price increases to mitigate inflationary pressures while simultaneously balancing the risk of lower consumer demand in response to any such price increases; (v) providing strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in order to stay better connected to consumers; (vi) establishing relationships with athletes, musicians, influencers, and other celebrities to promote our brands and products; (vii) providing attractive, reliable, secure, and user-friendly digital commerce sites; (viii) adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning; (ix) obtaining sufficient retail floor space and effective presentation of our products at stores and shop-within-shops; (x) attracting consumer traffic to stores, shop-within-shops, and digital commerce sites; (xi) sourcing sustainable and traceable raw materials at cost-effective prices; (xii) anticipating and maintaining proper inventory levels; (xiii) ensuring product availability and optimizing supply chain and distribution efficiencies with third-party manufacturers and retailers; (xiv) maintaining and growing market share; (xv) recruiting and retaining employees to operate our retail stores, distribution centers, and various corporate functions; (xvi) protecting our intellectual property; and (xvii) ability to withstand prolonged periods of adverse economic conditions or business disruptions.
Lauren or other extended or permanent loss of his services, or any negative market or industry perception with respect to him or arising from his loss, could have a material adverse effect on our business.
Lauren or other extended or permanent loss of his 28 services, or any negative market or industry perception with respect to him or arising from his loss, could have a material adverse effect on our business.
If we decide to close a store, or if we decide to downsize, consolidate, or relocate any of our corporate facilities, we may incur an impairment charge and/or exit costs associated with the disposal of the store or corporate facility.
If we decide to close a store, or if we decide to downsize, consolidate, or relocate any of our corporate facilities, we may incur an impairment charge and/or exit costs associated with the 31 disposal of the store or corporate facility.
See Item 1 — "Business — Our Licensing Business." 34 Our business could be adversely affected by man-made or natural disasters and other catastrophic events in the locations in which we or our customers or suppliers operate.
See Item 1 — "Business — Our Licensing Business." Our business could be adversely affected by man-made or natural disasters and other catastrophic events in the locations in which we or our customers or suppliers operate.
Other potential claimants may also be encouraged to bring suits against us based on a 38 settlement from us or adverse court decision against us for similar claims or allegations as their own.
Other potential claimants may also be encouraged to bring suits against us based on a settlement from us or adverse court decision against us for similar claims or allegations as their own.
Competition in our industry to attract and retain these employees is intense and is influenced by our reputation, our ability to offer competitive compensation and benefits, and economic conditions, among other factors.
Competition in our industry to attract and retain employees is intense and is influenced by our reputation, our ability to offer competitive compensation and benefits, and economic conditions, among other factors.
An increase in extreme weather conditions could also result in more frequent damage and/or closures of our stores and distribution centers, adversely impact retail traffic, consumer's disposable income levels or spending habits on discretionary items, or otherwise disrupt business operations in the communities in which we operate, any of which could result in lost sales or higher costs.
An increase in extreme weather conditions could also result in more frequent damage and/or closures of our stores, distribution centers, and corporate facilities, adversely impact retail traffic, consumer's disposable income levels or spending habits on discretionary items, or otherwise disrupt business operations in the communities in which we operate, any of which could result in lost sales or higher costs.
The success of our business also depends on our ability to continue to develop and maintain a reliable omni-channel experience for our customers, as well as our ability to introduce new Connected Retail capabilities, such as virtual selling appointments, Buy Online-Ship from Store, Buy Online-Pick Up in Store, and mobile checkout and contactless payments, among other capabilities.
The success of our business also depends on our ability to continue to develop and maintain a reliable omni-channel experience for our customers, as well as our ability to introduce new Connected Retail capabilities, such as virtual selling appointments, Endless Aisle, Buy Online-Ship from Store, Buy Online-Pick Up in Store, and mobile checkout and contactless payments, among other capabilities.
However, if the U.S. decides to impose additional tariffs on apparel or other of our goods imported from China, there can be no assurance that we will be able to offset all related increased costs, which could be material to our business operations as approximately 19% of our products are currently sourced from China.
However, if the U.S. decides to impose additional tariffs on apparel or other of our goods imported from China, there can be no assurance that we will be able to offset all related increased costs, which could be material to our business operations as approximately 15% of our products are currently sourced from China.
Lauren has the ability to exercise significant control over our business, including, without limitation, (i) the election of our Class B common stock directors, voting separately as a class and (ii) any action requiring the approval of our stockholders, including the adoption of amendments to our certificate of incorporation and the approval of mergers or sales of all or substantially all of our assets. 39 Item 1B.
Lauren has the ability to exercise significant control over our business, including, without limitation, (i) the election of our Class B common stock directors, voting separately as a class and (ii) any action requiring the approval of our stockholders, including the adoption of amendments to our certificate of incorporation and the approval of mergers or sales of all or substantially all of our assets. 38 Item 1B.
Potential impacts to our business include, but are not limited to: (i) our ability to successfully execute our long-term growth strategy; (ii) supply chain disruptions resulting from closed factories, reduced workforces, scarcity of raw materials, shipping and loading capacity constraints, and scrutiny or embargoing of goods produced in infected areas, including any related cost increases; (iii) reduced retail traffic at our stores and those of our wholesale customers and licensing partners due to forced closures or other operational restrictions, such as reduced capacity limits and operating hours, declines in tourism, and/or potential changes in consumer behavior and shopping preferences, such as their willingness to congregate in shopping centers or other populated locations and the overall growing preference to shop online versus at traditional brick and mortar locations; (iv) potential declines in the level of consumer purchases of discretionary items and luxury retail products, including our products, caused by higher unemployment and lower disposal income levels, inflationary pressures, travel and social gathering restrictions, work-from-home arrangements, or other factors beyond our control; (v) the potential build-up of excess inventory as a result of store closures and/or lower consumer demand; (vi) temporary closures or other operational restrictions of our distribution centers and/or corporate facilities; (vii) our ability to attract, retain, and manage employees in the current environment, which includes remote working arrangements; (viii) additional costs to protect the health and safety of our employees, customers, and communities, such as more frequent and thorough cleanings of our facilities and supplying personal protection equipment; (ix) the potential loss of one or more of our significant wholesale customers or licensing partners, or the loss of a large number of smaller wholesale customers or licensing partners, if they are not able to withstand prolonged periods of adverse economic conditions, and our ability to collect outstanding receivables; (x) increased vulnerability to data security or privacy breaches as a result of a substantial portion of our corporate employees working remotely for part of the work week; (xi) our ability to successfully negotiate with landlords to obtain rent abatements, rent deferrals, and other relief; (xii) our ability to access capital markets and maintain compliance with covenants associated with our existing debt instruments, as well as the ability of our key customers, suppliers, and vendors to do the same with regard to their own obligations; (xiii) our ability to generate sufficient cash flows to support our operations, including repayment of our debt obligations as they become due, as well as to return value to our shareholders in the form of dividend payments and repurchases of our common stock; (xiv) diversion of management 26 attention and resources from ongoing business activities and/or a decrease in employee morale; and (xv) our ability to maintain an effective system of internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002.
Potential impacts to our business include, but are not limited to: (i) our ability to successfully execute our long-term growth strategy; (ii) supply chain disruptions resulting from closed factories, reduced workforces, scarcity of raw materials, shipping and loading capacity constraints, and scrutiny or embargoing of goods produced in infected areas, including any related cost increases; (iii) reduced retail traffic at our stores and those of our wholesale customers and licensing partners due to forced closures or other operational restrictions, such as reduced capacity limits and operating hours, declines in tourism, and/or potential changes in consumer behavior and shopping preferences, such as their willingness to congregate in shopping centers or other populated locations and the overall growing preference to shop online versus at traditional brick and mortar locations; (iv) potential declines in the level of consumer purchases of discretionary items and luxury retail products, including our products, caused by higher unemployment and lower disposal income levels, inflationary pressures, travel and social gathering restrictions, work-from-home arrangements, or other factors beyond our control; (v) the potential build-up of excess inventory as a result of store closures and/or lower consumer demand; (vi) temporary closures or other operational restrictions of our distribution centers and/or corporate facilities; (vii) our ability to attract, retain, and manage employees; (viii) additional costs to protect the health and safety of our employees, customers, and communities, such as more frequent and thorough cleanings of our facilities and supplying personal protection equipment; (ix) 25 the potential loss of one or more of our significant wholesale customers or licensing partners, or the loss of a large number of smaller wholesale customers or licensing partners, if they are not able to withstand prolonged periods of adverse economic conditions, and our ability to collect outstanding receivables; (x) increased vulnerability to data security or privacy breaches as a result of remote working arrangements; (xi) our ability to successfully negotiate with landlords to obtain rent abatements, rent deferrals, and other relief; (xii) our ability to access capital markets and maintain compliance with covenants associated with our existing debt instruments, as well as the ability of our key customers, suppliers, and vendors to do the same with regard to their own obligations; (xiii) our ability to generate sufficient cash flows to support our operations, including repayment of our debt obligations as they become due, as well as to return value to our shareholders in the form of dividend payments and repurchases of our common stock; (xiv) diversion of management attention and resources from ongoing business activities and/or a decrease in employee morale; and (xv) our ability to maintain an effective system of internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002.
If customers are not receptive to the design layout or visual merchandising of our stores, our business could be adversely affected.
If customers are not receptive to the 27 design layout or visual merchandising of our stores, our business could be adversely affected.
Accordingly, the success of our business depends on our ability to identify reputable manufacturers who can fulfill our orders timely and to our specifications, as well as the timely importation, customs clearance, and receipt of products to and from our various distribution centers. We compete with other companies for the production capacity of our manufacturers.
Accordingly, the success of our business depends on our ability to identify reputable manufacturers who can fulfill our orders timely and to our specifications, as well as the timely importation, customs clearance, and shipment of products to and from our various distribution centers. We compete with other companies for the production capacity of our manufacturers.
Any perceived or actual electronic or physical security breach involving the misappropriation, loss, or other unauthorized disclosure of confidential or personally identifiable information, including penetration of our network security, whether by us or by a third party, could disrupt our business, severely damage our reputation and our relationships with our customers, employees, or vendors, expose us to risks of litigation, significant fines and penalties, liability, and higher costs for insurance or insurance not being available to us on economically feasible terms or at all, and result in deterioration in our customers', employees', or 35 vendors' confidence in us, and adversely affect our business, results of operations, and financial condition.
Any perceived or actual electronic or physical security breach involving the misappropriation, loss, or other unauthorized disclosure of confidential or personally identifiable information, including penetration of our network security, whether by us or by a third party, could disrupt our business, result in negative media attention, severely damage our reputation and our relationships with our customers, employees, or vendors, expose us to risks of litigation, significant fines and penalties, liability, and higher costs for insurance or insurance not being available to us on economically feasible terms or at all, and result in deterioration in our customers', employees', or vendors' confidence in us, and adversely affect our business, results of operations, and financial condition.
The violation of any ethical, social, product safety, labor, health, environmental, privacy, or other standards and regulations by an independent manufacturer used by us or one of our licensing partners, could interrupt or otherwise disrupt the shipment of finished products to us or damage our reputation.
The violation of any ethical, social, product safety, labor, health, environmental, privacy, or other standards and regulations by an independent manufacturer used by us or one of our licensing partners, could interrupt or otherwise disrupt the shipment of finished products to us, subject us to litigation, and/or damage our reputation.
Lauren's son, Mr. David Lauren, serves as our Chief Branding and Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board of Directors, and we employ other members of the Lauren family. From time to time, we may have other business dealings with Mr. R. Lauren, members of the Lauren family, or entities affiliated with Mr. R.
David Lauren, serves as our Chief Branding and Innovation Officer, Strategic Advisor to the CEO, and Vice Chairman of the Board of Directors, and we employ other members of the Lauren family. From time to time, we may have other business dealings with Mr. R. Lauren, members of the Lauren family, or entities affiliated with Mr. R.
If any of our distribution centers were to close or become inoperable or inaccessible for any reason, including, but not limited to, pandemic diseases such as COVID-19, natural disasters, severe weather, labor shortages, fires, and system failures, or if we fail to successfully consolidate existing facilities or transition to new facilities, we could experience a substantial loss of inventory, disruption of deliveries to our customers and our stores, increased costs, and longer lead times associated with the distribution of products during the period that would be required to reopen or replace the facility.
If any of our distribution centers were to close or become inoperable or inaccessible for any reason, including, but not limited to, natural disasters, severe weather, labor shortages, fires, and system failures, pandemic diseases, or if we fail to successfully consolidate existing facilities or transition to new facilities, we could experience a substantial loss of inventory, disruption of deliveries to our customers and our stores, increased costs, and longer lead times associated with the distribution of products during the period that would be required to reopen or replace the facility.
The risks associated with our own products also apply to our licensed products in addition to any number of possible risks specific to a licensing partner's business, including risks associated with a particular licensing partner's ability to (i) obtain capital; (ii) execute its business plans; (iii) manage its labor relations; (iv) maintain relationships with its suppliers and customers; (v) generate sufficient cash flows to fund its operations and pay its obligations as they become due, including minimum royalties due to us; (vi) withstand prolonged periods of adverse economic conditions; and (vii) manage its credit and bankruptcy risks effectively.
The risks associated with our own products also apply to our licensed products in addition to any number of possible risks specific to a licensing partner's business, including risks associated with a particular licensing partner's ability to (i) obtain capital; (ii) execute its business plans; (iii) manage its labor relations; (iv) maintain relationships with its suppliers and customers; (v) generate sufficient cash flows to fund its operations and pay its obligations as they become due, including minimum royalties due to us; (vi) withstand prolonged periods of adverse economic conditions; (vii) manage its credit and bankruptcy risks effectively; and (viii) protect the value and reputation of our brands.
Our failure to continue to shorten lead times or to correctly anticipate consumer preferences and demand could result in the build-up of excess inventory. Other factors beyond our control could also result in the build-up of excess inventory, including unforeseen adverse economic conditions or business disruptions, such as those caused by the COVID-19 pandemic.
Our failure to continue to shorten lead times or to correctly anticipate consumer preferences and demand could result in the build-up of excess inventory. Other factors beyond our control could also result in the build-up of excess inventory, including unforeseen adverse economic conditions or business disruptions, such as those caused by pandemic diseases.
Increased frequency and/or severity of adverse weather events due to climate change could adversely impact global supply chains, including the availability and cost of raw materials (such as cotton, a key raw material used in the production of our products that is highly susceptible to severe weather conditions), the ability of our 36 manufacturers to fulfill our orders timely and to our specifications, and shipping disruptions and/or higher freight costs.
Increased frequency and/or severity of extreme weather events due to climate change could adversely impact global supply chains, including the availability, quality, and cost of raw materials (such as cotton, a key raw material used in the production of our products that is highly susceptible to severe weather conditions), the ability of our manufacturers to fulfill our orders timely and to our specifications, and shipping disruptions and/or higher freight costs.
The rapid increase of online 32 shopping driven by changes in consumer shopping preferences has amplified certain of these risks resulting in capacity constraints. As previously noted, we have incurred, and may continue to incur, higher freight and other logistic costs as a result of certain of the beforementioned factors.
The rapid increase of online shopping driven by changes in consumer shopping preferences has amplified certain of these risks resulting in capacity constraints. We have incurred, and may continue to incur, higher freight and other logistic costs as a result of certain of the beforementioned factors.
This ability may be subject to certain economic, financial, competitive, and other factors that are beyond our control, such as impacts related to the COVID-19 pandemic, which in the past had resulted in us temporarily suspending our quarterly cash dividend and share repurchases.
This ability may be subject to certain economic, financial, competitive, and other factors that are beyond our control, such as impacts related to pandemic diseases, which in the past had resulted in us temporarily suspending our quarterly cash dividend and share repurchases.
Bribery Act, which prohibits U.K. and related companies from any form of bribery; (ii) adapting to local customs and culture; (iii) unexpected changes in laws, judicial processes, or regulatory requirements; (iv) the imposition of additional duties, tariffs, taxes, and other charges or other barriers to trade; (v) changes in diplomatic and trade relationships; (vi) civil and political instability, military conflicts, and terrorist attacks; (vii) pandemic diseases, such as COVID-19; and (viii) general economic fluctuations in specific countries or markets.
Bribery Act, which prohibits U.K. and related companies from any form of bribery; (ii) adapting to local customs and culture; (iii) unexpected changes in laws, judicial processes, or regulatory requirements; (iv) the imposition of additional duties, tariffs, taxes, and other charges or other barriers to trade; (v) changes in diplomatic and trade relationships; (vi) civil and political instability, military conflicts, terrorist attacks, and other hostilities; (vii) pandemic diseases; and (viii) general economic fluctuations in specific countries or markets.
The inability of third parties to manufacture and/or ship our products due to insufficient liquidity or otherwise could impair our ability to meet the delivery date requirements of our 25 customers.
The inability of third parties to manufacture and/or ship our products due to insufficient liquidity or otherwise could impair our 24 ability to meet the delivery date requirements of our customers.
Our operations, including retail, distribution, warehousing, and corporate operations, are susceptible to man-made or natural disasters, including pandemic diseases such as COVID-19, severe weather, geological events, and other catastrophic events, such as terrorist attacks and military conflict, any of which could disrupt our operations. In addition, the operations of our customers and suppliers could experience similar disruptions.
Our operations, including retail, distribution, warehousing, and corporate operations, are susceptible to man-made or natural disasters, including severe weather, geological events, pandemic diseases, and other catastrophic events, such as terrorist attacks and military conflicts, any of which could disrupt our operations. In addition, the operations of our customers and suppliers could experience similar disruptions.
Despite the security measures we currently have in place (including those described in Item 1 — "Business — Information Systems" ), our facilities and systems and those of our third-party service providers may be vulnerable to targeted or random attacks that could lead to security breaches, acts of vandalism, phishing attacks, denial-of-service attacks, computer viruses, malware, ransomware, misplaced or lost data, programming and/or human errors, or other Internet or email events.
Despite the security measures we currently have in place (including those described in Item 1C — " Cybersecurity "), our facilities and systems and those of our third-party service providers may be vulnerable to targeted or random attacks that could lead to security breaches, acts of vandalism, phishing attacks, denial-of-service attacks, computer viruses, malware, ransomware, misplaced or lost data, programming and/or human errors, or other Internet or email events.
Dollar and other currencies impact our financial results from a transactional perspective, as our foreign operations generally purchase inventory in U.S. Dollars. Given that we source most of our products overseas, the cost of these products may be affected by changes in the value of the relevant currencies.
Specifically, changes in exchange rates between the U.S. Dollar and other currencies impact our financial results from a transactional perspective, as our foreign operations generally purchase inventory in U.S. Dollars. Given that we source most of our products overseas, the cost of these products may be affected by changes in the value of the relevant currencies.
We also face intense competition from other domestic and foreign fashion-oriented apparel, footwear, accessory, and casual apparel producers that sell products through brick and mortar stores and wholesale and licensing channels.
We also face intense competition from other domestic and foreign fashion-oriented apparel, footwear, and accessory companies that sell products through brick and mortar stores and wholesale and licensing channels.
Implementation of our growth strategy involves the continuation and expansion of our multi-channel distribution network, including within international markets such as China, which is subject to many factors, including, but not limited to, our ability to (i) identify new or underpenetrated markets where our products and brand will be accepted by consumers; (ii) attract customers, particularly in new markets; (iii) identify desirable freestanding and department store locations, the availability of which may be out of our control; (iv) negotiate acceptable lease terms, including desired tenant improvement allowances; (v) efficiently and cost effectively build-out stores and shop-within-shops; (vi) source sufficient inventory levels timely to meet the needs of the new stores and shop-within-shops; (vii) hire, train, and retain competent store personnel; and (viii) integrate new stores and shop-within-shops into our existing systems and operations. 27 Any of these challenges could delay or otherwise prevent us from successfully executing our distribution expansion strategy.
Implementation of our growth strategy involves the continuation and expansion of our multi-channel distribution network, including within international markets such as China, which is subject to many factors, including, but not limited to, our ability to (i) identify new or underpenetrated markets where our products and brand will be accepted by consumers; (ii) attract customers, particularly in new markets; (iii) identify desirable freestanding and department store locations, the availability of which may be out of our control; (iv) negotiate acceptable lease terms, including desired tenant improvement allowances; (v) efficiently and cost effectively build-out stores and shop-within-shops; (vi) source sufficient inventory levels timely to meet the needs of the new stores and shop-within-shops; (vii) hire, train, and retain competent store personnel; and (viii) integrate new stores and shop-within-shops into our existing systems and operations.
In Fiscal 2023, approximately 96% of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 19% of our products sourced from China and 18% from Vietnam.
In Fiscal 2024, approximately 96% of our products (by dollar value) were produced outside of the U.S., primarily in Asia, Europe, and Latin America, with approximately 19% of our products sourced from Vietnam and 15% from China.
Risks Related to Environmental, Social, and Governance Issues Our business could suffer if we fail to meet our global citizenship and sustainability goals or if such goals do not meet the expectations of our stakeholders There is an increased focus from consumers, employees, investors, advocacy groups, and other stakeholders concerning environmental, social, and governance ("ESG") matters, including climate change, and the related sustainability initiatives of companies.
Risks Related to Citizenship and Sustainability Issues Our business could suffer if we fail to meet our global citizenship and sustainability goals or if such goals do not meet the expectations of our stakeholders There is an increased focus from consumers, employees, investors, advocacy groups, and other stakeholders concerning citizenship and sustainability matters, including climate change.
If our information technology systems become damaged or otherwise cease to function properly, we may have to make significant investments to repair or replace them. Additionally, confidential or sensitive data related to our customers, employees, or vendors could be lost or compromised. We are continually improving and upgrading our computer systems and software, which also involves risks and uncertainties.
If our information technology systems become damaged or otherwise cease to function properly, we may have to make significant investments to repair or replace them. Additionally, confidential or sensitive data related to our customers, employees, or vendors could be lost or compromised. We are continually improving and upgrading our computer systems, software, and related processes.
In addition, many countries in which we and our suppliers operate have begun enacting new legislation and regulations in an attempt to reduce or mitigate the potential impacts of climate change, which could result in higher sourcing, operational, and compliance-related costs.
In addition, many countries in which we and our suppliers and wholesale customers operate have begun enacting new legislation and regulations intended to reduce or mitigate the potential impacts of climate change, which could result in higher sourcing, operational, and compliance-related costs.
Further, we could incur additional costs, face market and technological barriers, and require additional resources to monitor, report, and comply with various ESG practices.
Further, we could incur additional costs, face market and technological barriers, and require additional resources to monitor, report, and comply with various citizenship and sustainability practices.
We have implemented restructuring plans to support key strategic initiatives, such as the Fiscal 2021 Strategic Realignment Plan, as described in Item 1 — "Business — Recent Developments." Although designed to deliver long-term sustainable growth, restructuring plans present significant potential risks that may impair our ability to achieve anticipated operating enhancements and/or cost reductions, or otherwise harm our business, including (i) higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the U.S.; (ii) higher than anticipated lease termination and store or facility closure costs (see "Risks Related to our Business and Operations — Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases" ); (iii) failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge; (iv) failure to maintain adequate controls and procedures while executing, and subsequent to completing, our restructuring plans; (v) diversion of management attention and resources from ongoing business activities and/or a decrease in employee 29 morale; (vii) attrition beyond any planned reduction in workforce; and (viii) damage to our reputation and brand image due to our restructuring-related activities.
Although designed to deliver long-term sustainable growth, restructuring plans present significant potential risks that may impair our ability to achieve anticipated operating enhancements and/or cost reductions, or otherwise harm our business, including (i) higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the U.S.; (ii) higher than anticipated lease termination and store or facility closure costs (see "Risks Related to our Business and Operations — Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases" ); (iii) failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge; (iv) failure to maintain adequate controls and procedures while executing, and subsequent to completing, our restructuring plans; (v) diversion of management attention and resources from ongoing business activities and/or a decrease in employee morale; (vii) attrition beyond any planned reduction in workforce; and (viii) damage to our reputation and brand image due to our restructuring-related activities.
Such a failure could also result in the implementation of new restructuring-related activities, which may be dilutive to our earnings in the short term. Achievement of our growth strategy may require investment in new capabilities, distribution channels, and technologies.
Such a failure could also result in the implementation of new restructuring-related activities, which may be dilutive to our earnings in the short term. Achievement of our growth strategy may require investment in new capabilities, distribution channels, and technologies, such as those related to our Next Generation Transformation project.
Further, even if we are able to obtain waivers of non-compliance, such waivers may result in incremental fees, higher interest rates, and/or additional restrictions and covenants. Additionally, the Federal Reserve has raised interest rates multiple times over the last 12 months in an effort to mitigate inflationary pressures and further increases may occur in the near future.
Further, even if we are able to obtain waivers of non-compliance, such waivers may result in incremental fees, higher interest rates, and/or additional restrictions and covenants. Additionally, the Federal Reserve has raised interest rates multiple times in an effort to mitigate current inflationary pressures and further increases could potentially occur in the future.
Additionally, our industry is subject to significant pricing pressure caused by many factors, including intense competition and a highly promotional retail environment, consolidation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer spending patterns.
Additionally, our industry is subject to significant pricing pressure caused by many factors, including persisting inflationary pressures, intense competition and a highly promotional retail environment, consolidation in the retail industry, pressure from retailers to reduce the costs of products, excess inventory levels in the marketplace, and changes in consumer spending patterns.
Our failure to realize the anticipated benefits, which may be due to our inability to execute the various elements of our growth strategy, changes in consumer preferences, competition, economic conditions (including recent inflationary and foreign currency pressures), and other risks described herein, such as those related to pandemic diseases and supply chain challenges, could have a material adverse effect on our business.
Our failure to realize the anticipated benefits, which may be due to our inability to execute the various elements of our growth strategy, changes in consumer preferences, competition, economic conditions (including ongoing inflationary pressures), and other risks described herein, such as those related to pandemic diseases, supply chain disruptions, and military conflicts or other hostilities, could have a material adverse effect on our business.
We are dependent on information technology systems and networks, including the Internet, for a significant portion of our direct-to-consumer sales, including our digital commerce operations and retail business credit card transaction authorization and processing.
We are dependent on information technology systems and networks, including the Internet, for a significant portion of our direct-to-consumer sales, including our digital commerce operations and retail business credit card transaction authorization and processing (among other electronic payment methods that we accept).
Such proposed measures also include expanded disclosure requirements regarding greenhouse gas emissions and other climate-related information, including independent auditors providing some level of attestation to the accuracy of such disclosures.
Such proposed measures also include expanded disclosure requirements regarding greenhouse gas emissions, climate change risks, and other climate-related information, including independent auditors providing increasing levels of attestation to the accuracy of such disclosures.
Although we believe that our existing cash and investments, cash provided by operations, and available borrowing capacity under our credit and overdraft facilities and commercial paper borrowing program will provide us with sufficient liquidity, the impact of economic conditions on our major third-party customers, suppliers, vendors, and lenders and their ability to access global capital markets cannot be predicted.
Although we believe that our existing cash and investments, cash provided by operations, and available borrowing capacity under our credit and overdraft facilities and commercial paper borrowing program will provide us with sufficient liquidity, the impact of adverse economic conditions (such as persisting inflationary pressures and high interest rates) on our major customers, suppliers, vendors, and lenders and their ability to access global capital markets cannot be predicted.
The departure of key individuals or our failure to maintain sufficient employee staffing levels could have a material adverse impact on our business, as well as impede our ability to maintain an effective system of internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002.
The departure of key individuals or our failure to maintain sufficient employee staffing levels could have a material adverse impact on our business, as well as impede our ability to maintain an effective system of internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002. We face intense competition worldwide in the markets in which we operate.
There has also been increased focus by governmental and non-governmental organizations, consumers, customers, and other stakeholders on products that are sustainably made and other sustainability matters, including traceability and transparency, sustainability claims and product labeling requirements, responsible sourcing and deforestation, the use of energy and water, and the recyclability or recoverability of packaging, product, and materials.
There has also been increased focus by governmental and non-governmental organizations, consumers, customers, and other stakeholders on products that are made with more sustainable practices and materials and other sustainability matters, including traceability and transparency, sustainability claims and product labeling requirements, responsible sourcing and deforestation, design for circularity, the use of energy, water, and synthetic fibers, and the recyclability or recoverability of packaging, product, and materials.
In addition, prices of raw materials used to manufacture our products are subject to significant fluctuation as a result of certain of the beforementioned factors, as well as crop yields which could be negatively impacted by severe weather conditions.
In addition, the cost and availability of raw materials used to manufacture our products are subject to significant fluctuation as a result of certain of the beforementioned factors (including persisting inflationary pressures), as well as crop yields which could be negatively impacted by severe weather conditions.
Although we have established certain long-term initiatives and goals regarding our impact on the environment and society as a whole, including our diversity, equity, and inclusion initiatives, there can be no assurance that our various stakeholders will agree with our initiatives or if we will be successful in achieving our goals by our targeted dates or at all.
Although we have established certain long-term initiatives and goals regarding our impact on the environment and society as a whole as part of our Global Citizenship & Sustainability program, there can be no assurance that our various stakeholders will agree with our initiatives or if we will be successful in achieving our goals by our targeted dates or at all.
Other risks related to our international expansion plans include (i) changes in general economic conditions in specific countries and markets, including those resulting from pandemic diseases, civil or political instability, or military conflicts; (ii) changes in diplomatic and trade relationships and any resulting anti-American sentiment; (iii) foreign government regulation; and (iv) restrictions on the repatriation of funds held internationally, among other risks described herein.
Other risks related to our international expansion plans include (i) changes in general economic conditions in specific countries and markets, including those resulting from inflationary pressures, pandemic diseases, natural or man-made disasters, civil or political instability, or military conflicts, terrorist acts, or other hostilities; (ii) changes in diplomatic and trade relationships and any resulting anti-American sentiment; (iii) foreign government regulation; (iv) risks associated with importing products; and (v) restrictions on the repatriation of funds held internationally, among other risks described herein.
Although we sell our products through the Internet, increased competition and promotional activity in the worldwide apparel, footwear, accessory, and home product industries from Internet-based competitors could reduce our sales, prices, and margins.
We face increasing competition from companies selling apparel, footwear, accessories, home, and other of our product categories through the Internet. Although we sell our products through the Internet, increased competition and promotional activity in the worldwide apparel, footwear, accessory, and home product industries from Internet-based competitors could reduce our sales, prices, and margins.
The retail industry in particular continues to be the target of many cyber-attacks, which are becoming increasingly more difficult to anticipate and prevent due to their rapidly evolving nature.
Given the sensitive nature of information collected and processed, the retail industry in particular continues to be the target of many cyber-attacks, which are becoming increasingly more frequent and difficult to anticipate, prevent, and timely detect due to their rapidly evolving nature.
The department store sector has experienced numerous consolidations, restructurings, reorganizations, and other ownership changes in recent years, which could potentially increase in frequency as a result of prolonged periods of adverse economic conditions or changes in consumer shopping preferences, such as the increasing shift away from traditional brick and mortar wholesale retailers to larger online retailers.
The department store sector has experienced numerous consolidations, restructurings, reorganizations, bankruptcies, and other ownership changes in recent times, which could potentially increase in frequency as a result of current adverse economic conditions, including persisting inflationary pressures and high interest rates, and/or changes in consumer shopping preferences, such as the continued shift away from traditional brick and mortar wholesale retailers to larger online retailers.
Sales to our three largest wholesale customers accounted for approximately 16% of total net revenues for Fiscal 2023, and these customers accounted for approximately 34% of our total gross trade accounts receivable outstanding as of April 1, 2023. Substantially all sales to our three largest wholesale customers related to our North America segment.
Sales to our three largest wholesale customers accounted for approximately 13% of total net revenues for Fiscal 2024, and these customers accounted for approximately 29% of our total gross trade accounts receivable outstanding as of March 30, 2024. Substantially all sales to our three largest wholesale customers related to our North America segment.
Many economic and other factors outside of our control affect the level of consumer spending in the apparel, footwear & accessories, home, fragrances, and hospitality industries, including, among others, man-made or natural disasters, including pandemic diseases; consumer perceptions of personal well-being and safety; consumer perceptions of current and future economic conditions; employment levels and wage rates; stock market performance; inflation; interest rates; foreign currency exchange rates; the housing market; consumer debt levels; the availability of consumer credit; the health and stability of the banking sector; the availability and price of commodities, including fuel and energy costs; global food supplies; taxation; general domestic and international political conditions; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; and weather conditions.
The global economy and retail industry are impacted by many different factors that are outside of our control, including, among others, man-made or natural disasters, including pandemic diseases; consumer perceptions of personal well-being and safety; consumer perceptions of current and future economic conditions, including any recessionary fears; employment levels and wage rates; stock market performance; inflation; interest rates; foreign currency exchange rates; the housing market; consumer debt levels; the availability of consumer credit; the health and stability of the banking sector; the availability and price of commodities, including fuel and energy costs; global food supplies; taxation; diplomatic and trade relationships; general domestic and international political conditions; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; and weather conditions.
Any failure on our part to comply with such regulations or meet such expectations could lead to adverse consumer actions and/or investment decisions by investors, as well as expose us to government enforcement action and/or private litigation.
Any failure on our part to comply with such regulations or meet such expectations could lead to adverse investment decisions by investors, lost sales resulting from our inability to sell our products in applicable jurisdictions and/or adverse consumer purchase decisions, as well as expose us to government enforcement action and/or private litigation.
Any disruptions, delays, or deficiencies in the design, implementation, or transition of such systems could result in increased costs, disruptions in the sourcing, sale, and shipment of our product, delays in the collection of cash from our customers, and/or adversely affect our ability to accurately report our financial results in a timely manner.
Any disruptions, delays, or deficiencies in the design, implementation, or transition of such systems could also result in disruptions to our business operations, including the sourcing, sale, and shipment of our product, delays in the collection of cash from our customers, diversion of management attention, and/or adversely affect our ability to accurately report our financial results in a timely manner or otherwise maintain compliance with internal controls.
In addition, the tax laws and regulations in the countries where we operate may change, or there may be changes in interpretation and enforcement of existing tax laws, which could materially affect our income tax expense in our consolidated financial statements.
In addition, the tax laws and regulations in the countries where we operate may change, or there may be changes in interpretation and enforcement of existing tax laws, which could materially affect our income tax expense in our consolidated financial statements. For example, in August 2022, President Biden signed the Inflation Reduction Act ("IRA") into law.
While the suspension of our operations in Russia have not resulted in a material impact to our consolidated financial statements, our business has been impacted by the broader macroeconomic implications resulting from the war, including unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and volatility in financial markets, among other factors, which have adversely impacted consumer sentiment and confidence.
Although our voluntary decision to suspend operations in Russia has not resulted in a material impact to our consolidated financial statements and our ongoing operations in Israel are also not material, our business has been, and may continue to be, impacted by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and volatility in financial markets, among other factors, which have adversely impacted consumer sentiment and confidence.
In addition, we require our licensing partners and independent manufacturers to operate in compliance with applicable laws and regulations. While our internal and vendor operating guidelines promote ethical business practices and our employees periodically visit and monitor the operations of our independent manufacturers, we do not control these manufacturers or their labor practices.
While our internal and vendor operating guidelines promote ethical business practices and our employees periodically visit and monitor the operations of our independent manufacturers, we do not control these manufacturers or their labor practices.
The IRA enacted a 15% corporate minimum tax rate (subject to certain thresholds being met) that will be applicable to the Company beginning in its Fiscal 2024, a 1% excise tax on share repurchases made after December 31, 2022, and created and extended certain tax-related energy incentives.
The IRA enacted a 15% corporate minimum tax rate (subject to certain thresholds being met) that became effective for us beginning in our Fiscal 2024, a 1% excise tax on share repurchases made after December 31, 2022 (which may be reduced for the fair value of certain share issuances), and created and extended certain tax-related energy incentives.
This could negatively affect our ability to compete with other retailers and result in diminished loyalty to our brands, which could adversely impact our business. Our retail stores are generally located in shopping malls or other shopping centers.
This could negatively affect our ability to compete with other retailers and result in diminished loyalty to our brands, which could adversely impact our business. For discussion of additional risks related to our use of information technology, see "Risks Related to Information Systems and Data Security." Our retail stores are generally located in shopping malls or other shopping centers.
In recent years, consumers have been increasingly shopping online using computers, smartphones, tablets, and other devices, and using such devices to perform comparison shopping on a real-time basis.
Consumers continue to increasingly shop online using computers, smartphones, tablets, and other devices, and also use such devices to perform comparison shopping on a real-time basis.
We may not be able to offset such increases in raw materials, freight, or other sourcing costs through pricing actions or other means. Any one of these factors could have a material adverse effect on our business.
We may not be able to implement price increases that fully offset increases in raw materials, freight, or other sourcing costs and/or any such price increases could have an adverse impact on consumer demand for our products. Any one of these factors could have a material adverse effect on our business.
We devote substantial resources to the establishment and protection of our trademarks and anti-counterfeiting activities worldwide. However, significant counterfeiting and imitation of our products continue to exist.
Our trademarks, intellectual property, and other proprietary rights are extremely important to our success and our competitive position. We devote substantial resources to the establishment and protection of our trademarks and anti-counterfeiting activities worldwide. However, significant counterfeiting and imitation of our products continue to exist.
Cyber-criminals are constantly devising schemes to gain unauthorized access to computer systems and confidential or sensitive data.
Cyber-criminals are constantly devising new, sophisticated schemes to gain unauthorized access to computer systems and confidential or sensitive data, including through the use of artificial intelligence.
Although we continue to limit our promotional activity in connection with our quality of sales initiatives, these factors may cause us to reduce our sales prices to retailers and consumers, which could cause our gross margin to decline if we are unable to appropriately manage inventory levels and/or otherwise offset price reductions with comparable reductions in our costs.
Although we continue to limit our promotional activity in connection with our quality of sales initiatives, these factors may cause us to reduce our sales prices to retailers and consumers, which could cause our gross margin to decline. If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our profitability will decline.
Our major customers, suppliers, and vendors may also be subject to similar risks, which in turn could have a resulting material adverse impact on our business if they were to lose access to sufficient liquidity. Infectious disease outbreaks, such as the COVID-19 pandemic, could have a material adverse effect on our business.
Our major customers, suppliers, and vendors may also be subject to similar risks, which in turn could have a resulting material adverse impact on our business if they were to lose access to sufficient liquidity. Our business is exposed to domestic and foreign currency fluctuations. Our business is exposed to foreign currency exchange risk.
The voting shares of our Company's stock are concentrated in one majority stockholder. As of April 1, 2023, Mr. Ralph Lauren, or entities controlled by the Lauren family, held approximately 86% of the voting power of the outstanding common stock of our Company. In addition, Mr. R. Lauren serves as our Executive Chairman and Chief Creative Officer, Mr. R.
As of March 30, 2024, Mr. Ralph Lauren, or entities controlled by the Lauren family, held approximately 84% of the voting power of the outstanding common stock of our Company. In addition, Mr. R. Lauren serves as our Executive Chairman and Chief Creative Officer, Mr. R. Lauren's son, Mr.
Climate change, or our ability to adhere to any legislation and regulatory requirements related to climate change, traceability and transparency, product labeling, or other sustainability matters may adversely affect our business. Our business is susceptible to risks associated with climate change, including potential disruptions to our retail stores, distribution centers, and corporate facilities.
Climate change, or our ability to adhere to any legislation and regulatory requirements related to climate change, traceability and transparency, product labeling, or other sustainability matters may adversely affect our business.
We record tax expense based on our estimates of future payments, which include reserves for uncertain tax positions in multiple tax jurisdictions. At any given time, multiple tax years are subject to audit by various taxing authorities. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues.
We are subject to income and non-income taxes in many U.S. and certain foreign jurisdictions, with the applicable tax rates varying by jurisdiction. We record tax expense based on our estimates of future payments, which include reserves for uncertain tax positions in multiple tax jurisdictions. At any given time, multiple tax years are subject to audit by various taxing authorities.
Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also materially adversely affect our business in future periods or if circumstances change. Risks Related to Macroeconomic Conditions Economic, political, and other conditions may adversely affect the level of consumer purchases of discretionary items and luxury retail products, including our products.
Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also materially adversely affect our business in future periods or if circumstances change.
Additionally, the Organisation for Economic Co-operation and Development (the "OECD"), which represents a coalition of member countries, has proposed changes to numerous long-standing tax principles through its Base Erosion and Profit Shifting project, which is focused on a number of issues, including the creation of a global minimum tax commonly referred to as "Pillar Two." Currently, South Korea and Japan are the only countries to have enacted legislation consistent with the OECD's proposals under Pillar Two.
Additionally, the Organisation for Economic Co-operation and Development (the "OECD"), which represents a coalition of member countries, has proposed changes to numerous long-standing tax principles through its Base Erosion and Profit Shifting project, which is focused on a number of issues, including the creation of a global minimum tax commonly referred to as "Pillar Two." In December 2022, the European Union member states agreed to implement the OECD's Pillar Two global minimum tax rate of 15%, with certain aspects of the directive becoming effective in January 2024 and the remaining aspects becoming effective in January 2025.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePendleton Street, High Point, NC Retail digital commerce call center and distribution facility 805,000 Whitsett, NC Wholesale and retail distribution facility 520,600 Greensboro, NC Wholesale and retail distribution facility 357,400 650 Madison Avenue, NYC Executive and corporate offices, design studio, and showrooms 240,800 601 West 26th Street, NYC Corporate offices 216,200 Long Island City, NY Corporate offices, design and digital production studios, showrooms, and warehousing 206,700 Nutley, NJ Corporate offices 109,300 Spinners Building, Hong Kong Asia sourcing offices 67,000 Gateway Office, Hong Kong Asia corporate offices 37,500 Geneva, Switzerland Europe corporate office 31,200 Shanghai, China Asia corporate offices 28,800 Watford, UK Europe corporate offices 28,000 London, UK Europe corporate offices 19,650 888 Madison Avenue, NYC Retail flagship store 37,900 N.
Biggest changePendleton Street, High Point, NC Retail digital commerce call center and distribution facility 805,000 Whitsett, NC Wholesale and retail distribution facility 360,000 Greensboro, NC Wholesale and retail distribution facility 357,400 650 Madison Avenue, NYC Executive and corporate offices, design studio, and showrooms 244,000 601 West 26th Street, NYC Corporate offices 222,200 Long Island City, NY Corporate offices, design and digital production studios, showrooms, and warehousing 169,600 Nutley, NJ Corporate offices 92,500 Spinners Building, Hong Kong Asia sourcing offices 69,200 Gateway Office, Hong Kong Asia corporate offices 37,500 Geneva, Switzerland Europe corporate office 31,200 Shanghai, China Asia corporate offices 28,800 Watford, UK Europe corporate offices 28,000 London, UK Europe corporate offices 19,650 888 Madison Avenue, NYC Retail flagship store 37,900 N.
See Item 1A — " Risk Factors — Risks Related to our Business and Operations — Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases. " 40
See Item 1A — " Risk Factors — Risks Related to our Business and Operations — Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases. " 41
Michigan Avenue, Chicago Retail flagship store 37,500 New Bond Street, London, UK Retail flagship store 31,500 867 Madison Avenue, NYC Retail flagship store 27,700 Paris, France Retail flagship store 25,700 Tokyo, Japan Retail flagship store 25,000 N.
Michigan Avenue, Chicago Retail flagship store 37,500 New Bond Street, London, UK Retail flagship store 31,500 867 Madison Avenue, NYC Retail flagship store 27,700 Paris, France Retail flagship store 25,700 Tokyo, Japan Retail flagship store 25,200 N.
We believe that our existing facilities are well maintained, in good operating condition, and are adequate for our present level of operations. The following table sets forth information relating to our principal properties as of April 1, 2023: Location Use Approximate Square Feet NC Highway 66, High Point, NC Wholesale and retail distribution facility 847,000 N.
We believe that our existing facilities are well maintained, in good operating condition, and are adequate for our present level of operations. The following table sets forth information relating to our principal properties as of March 30, 2024: Location Use Approximate Square Feet NC Highway 66, High Point, NC Wholesale and retail distribution facility 847,000 N.
Rodeo Drive, Beverly Hills Retail flagship store 22,200 Milan, Italy Retail flagship store 14,900 Prince's Building, Hong Kong Retail flagship store 9,800 As of April 1, 2023, we directly operated 553 retail stores, totaling approximately 4.1 million square feet.
Rodeo Drive, Beverly Hills Retail flagship store 22,200 Milan, Italy Retail flagship store 14,900 Prince's Building, Hong Kong Retail flagship store 9,500 As of March 30, 2024, we directly operated 564 retail stores, totaling approximately 4.2 million square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. We are involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to our business, including, among other things, matters involving credit card fraud, trademark and other intellectual property, licensing, importation and exportation of products, taxation, unclaimed property, leases, and employee relations.
Biggest changeItem 3. Legal Proceedings. We are involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to our business, including, among other things, matters involving credit card fraud, trademark and other intellectual property, licensing, importation and exportation of our products, taxation, unclaimed property, leases, and employee relations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth repurchases of shares of our Class A common stock during the fiscal quarter ended April 1, 2023: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (a) (millions) January 1, 2023 to January 28, 2023 — $ — — $ 1,217 January 29, 2023 to February 25, 2023 — — — 1,217 February 26, 2023 to April 1, 2023 379,328 (b) 112.75 376,474 1,175 379,328 376,474 (a) As of April 1, 2023, the remaining availability under our Class A common stock repurchase program was approximately $1.175 billion, reflecting the February 2, 2022 approval by our Board of Directors to expand the program by up to an additional $1.500 billion of Class A common stock repurchases.
Biggest changeMarch 4, 2024 3,000,000 The following table sets forth repurchases of shares of our Class A common stock during the fiscal quarter ended March 30, 2024: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (a) (millions) December 31, 2023 to January 27, 2024 4,057 $ 135.01 4,057 $ 896 January 28, 2024 to February 24, 2024 85,666 179.40 85,666 881 February 25, 2024 to March 30, 2024 582,180 (b) 180.41 579,976 776 671,903 669,699 (a) As of March 30, 2024, the remaining availability under our Class A common stock repurchase program was approximately $776 million, reflecting the February 2, 2022 approval by our Board of Directors to expand the program by up to an additional $1.500 billion of Class A common stock repurchases.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. As of May 19, 2023, there were 622 holders of record of our Class A common stock and 7 holders of record of our Class B common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. As of May 17, 2024, there were 606 holders of record of our Class A common stock and 7 holders of record of our Class B common stock.
(b) Includes 2,854 shares surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under its long-term stock incentive plans. 41 The following graph compares the cumulative total stockholder return (stock price appreciation plus dividends) on our Class A common stock to the cumulative total return of the Standard & Poor's ("S&P") 500 Index, the S&P 1500 Apparel, Accessories & Luxury Goods Index, and a prior peer group index (the "Prior Peer Group") for the period from March 31, 2018, the last day of our 2018 fiscal year, through April 1, 2023, the last day of our 2023 fiscal year.
(b) Includes 2,204 shares surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under its long-term stock incentive plans. 42 The following graph compares the cumulative total stockholder return (stock price appreciation plus dividends) on our Class A common stock to the cumulative total return of the Standard & Poor's ("S&P") 500 Index and the S&P 1500 Apparel, Accessories & Luxury Goods Index for the period from March 30, 2019, the last day of our 2019 fiscal year, through March 30, 2024, the last day of our 2024 fiscal year.
The returns are calculated by assuming a $100 investment made on March 31, 2018 in the Class A common stock and each index, with all dividends reinvested. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Ralph Lauren Corporation, the S&P 500 Index, S&P 1500 Apparel, Accessories & Luxury Goods Index, and the Prior Peer Group
The returns are calculated by assuming a $100 investment made on March 30, 2019 in the Class A common stock and each index, with all dividends reinvested. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Ralph Lauren Corporation, the S&P 500 Index, and S&P 1500 Apparel, Accessories & Luxury Goods Index Item 6. Reserved 43
The shares of Class A common stock issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. No shares of our Class B common stock were converted into Class A common stock during the fiscal quarter ended April 1, 2023.
The shares of Class A common stock issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended.
Removed
During Fiscal 2023, the Company determined that the S&P Composite 1500 Apparel, Accessories & Luxury Goods Index is a more appropriate comparison due to the composition of the included companies given their size, comparable products, and lines of business.
Added
During the fiscal quarter ended March 30, 2024, the stockholder set forth in the table below converted shares of Class B common stock into Class A common stock on the date set forth below: Stockholder That Converted Class B Common Stock to Class A Common Stock Date of Conversion Number of Shares Converted/Received Lauren Family, L.L.C.
Removed
Our Prior Peer Group consisted of Burberry Group PLC, Compagnie Financière Richemont SA, EssilorLuxottica SA, The Estée Lauder Companies Inc., Hermes International, Kering, LVMH, PVH Corp., Tapestry, Inc., Tod's S.p.A., and V.F. Corporation. All calculations for foreign companies in our Prior Peer Group are performed using the local foreign issue of such companies.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

175 edited+36 added−74 removed131 unchanged
Biggest changeThe $335.0 million increase in cash provided by operating activities was due to an increase in net income before non-cash charges, partially offset by a net unfavorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year. 63 The net unfavorable change related to our operating assets and liabilities, including our working capital, was primarily driven by: • a year-over-year increase in our inventory levels largely to support revenue growth, as well as higher goods-in-transit to mitigate ongoing global supply chain delays; • a net unfavorable change in our accrued liabilities largely driven by an unfavorable change in our restructuring reserve due to a decrease in restructuring charges recorded during Fiscal 2022 as compared to the prior fiscal year, partially offset by a favorable change in our dividends payable related to the temporary suspension and subsequent resumption of our quarterly cash dividend program; and • an unfavorable change related to our prepaid expenses and other current assets largely driven by an increase in non-trade receivables primarily related to transition services being performed in connection with the disposition of our former Club Monaco business (see " Recent Developments "), as well as the timing of cash payments; and • an unfavorable change related to our income tax receivables and payables largely driven by the timing of cash receipts and payments, respectively.
Biggest changeThe net favorable change related to our operating assets and liabilities, including our working capital, was primarily driven by: • a favorable change related to our inventories, largely driven by a more normalized receipt cadence; • a net favorable change in our accrued liabilities largely driven by the impact of a lower bonus achievement level realized during Fiscal 2023 as compared to Fiscal 2022 and a favorable change in our restructuring reserve due to an increase in restructuring charges recorded during the current fiscal year period as compared to the prior fiscal year period, as well as a favorable change in accounts payable driven by the timing of cash payments; and • a favorable change related to our accounts receivable, largely driven by a decline in wholesale net revenues and timing of cash receipts.
Our brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others. We diversify our business by geography (North America, Europe, and Asia, among other regions) and channel of distribution (retail, wholesale, and licensing).
Our brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others. We diversify our business by geography (North America, Europe, and Asia, among other regions) and channel of distribution (retail, wholesale, and licensing).
All percentages shown in the below table and the discussion that follows have been calculated using unrounded numbers.
All percentages shown in the below table and the discussion that follows have been calculated using unrounded numbers.
Cash Flows Fiscal 2023 Compared to Fiscal 2022 Fiscal Years Ended April 1, 2023 April 2, 2022 $ Change (millions) Net cash provided by operating activities $ 411.0 $ 715.9 $ (304.9) Net cash provided by (used in) investing activities 471.5 (717.9) 1,189.4 Net cash used in financing activities (1,208.8) (665.7) (543.1) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (8.8) (48.3) 39.5 Net decrease in cash, cash equivalents, and restricted cash $ (335.1) $ (716.0) $ 380.9 Net Cash Provided by Operating Activities.
Fiscal 2023 Compared to Fiscal 2022 Fiscal Years Ended April 1, 2023 April 2, 2022 $ Change (millions) Net cash provided by operating activities $ 411.0 $ 715.9 $ (304.9) Net cash provided by (used in) investing activities 471.5 (717.9) 1,189.4 Net cash used in financing activities (1,208.8) (665.7) (543.1) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (8.8) (48.3) 39.5 Net decrease in cash, cash equivalents, and restricted cash $ (335.1) $ (716.0) $ 380.9 Net Cash Provided by Operating Activities.
However, prolonged periods of adverse economic conditions or business disruptions in any of our key regions, or a combination thereof, such as those resulting from pandemic 65 diseases and other catastrophic events, could impede our ability to pay our obligations as they become due or return value to our shareholders, as well as delay previously planned expenditures related to our operations.
However, prolonged periods of adverse economic conditions or business disruptions in any of our key regions, or a combination thereof, such as those resulting from pandemic diseases and other catastrophic events, could impede our ability to pay our obligations as they become due or return value to our shareholders, as well as delay previously planned expenditures related to our operations.
As the ultimate resolution of contingencies is inherently unpredictable, these assessments can involve a series of complex judgments about future events including, but not limited to, court rulings, negotiations between affected parties, and governmental actions. As a result, the accounting for loss contingencies relies heavily on management's judgment in developing the related estimates and assumptions.
As the ultimate resolution of contingencies is inherently unpredictable, these assessments can involve a series of complex judgments about future events including, but not limited to, court rulings, negotiations between affected parties, and governmental actions. As a 72 result, the accounting for loss contingencies relies heavily on management's judgment in developing the related estimates and assumptions.
Asia net revenues — Net revenues increased by $139.9 million, or 10.9%, during Fiscal 2023 as compared to Fiscal 2022, despite ongoing COVID-19-related disruptions continuing to sporadically occur throughout the fiscal year, as well as the absence of the 53rd week, which resulted in incremental net revenues of approximately $21 million during the prior fiscal year related to our retail business.
Asia net revenues — Net revenues increased by $139.9 million, or 10.9%, during Fiscal 2023 as compared to Fiscal 2022, despite COVID-19-related disruptions continuing to sporadically occur throughout the fiscal year, as well as the absence of the 53rd week, which resulted in incremental net revenues of approximately $21 million during the prior fiscal year related to our retail business.
These factors, among others, may cause gross profit as a percentage of net revenues to fluctuate from year to year. Selling, General, and Administrative Expenses. SG&A expenses include costs relating to compensation and benefits, advertising and marketing, rent and occupancy, distribution, information technology, legal, depreciation and amortization, bad debt, and other selling and administrative costs.
These factors, among others, may cause gross profit as a percentage of net revenues to fluctuate from year to year. 52 Selling, General, and Administrative Expenses. SG&A expenses include costs relating to compensation and benefits, rent and occupancy, marketing and advertising, distribution, information technology, legal, depreciation and amortization, bad debt, and other selling and administrative costs.
Valuation allowances are established when management determines that it is more likely than not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically by assessing the adequacy of future expected taxable income, 72 which typically involves the use of significant estimates.
Valuation allowances are established when management determines that it is more likely than not that some portion or all of a deferred tax asset will not be realized. Tax valuation allowances are analyzed periodically by assessing the adequacy of future expected taxable income, which typically involves the use of significant estimates.
During Fiscal 2023, we received net proceeds from sales and maturities of investments of $694.8 million, as compared to making net purchases of investments of $546.0 million during Fiscal 2022. This increase in cash provided by investing activities was partially offset by: • a $50.6 million increase in capital expenditures.
During Fiscal 2023, we received net proceeds from sales and maturities of investments of $694.8 million, as compared to making net purchases of investments of $546.0 million during Fiscal 2022. 63 This increase in cash provided by investing activities was partially offset by: • a $50.6 million increase in capital expenditures.
We monitor foreign exchange risk using different techniques, including periodic review of market values and performance of sensitivity analyses. Cross-Currency Swap Contracts We periodically designate pay-fixed rate, receive-fixed rate cross-currency swap contracts as hedges of our net investment in certain European subsidiaries. These contracts swap U.S.
We monitor foreign exchange risk using different techniques, including periodic review of market values and performance of sensitivity analyses. 68 Cross-Currency Swap Contracts We periodically designate pay-fixed rate, receive-fixed rate cross-currency swap contracts as hedges of our net investment in certain European subsidiaries. These contracts swap U.S.
RECENTLY ISSUED ACCOUNTING STANDARDS See Note 4 to the accompanying consolidated financial statements for a description of certain recently issued accounting standards which have impacted our consolidated financial statements or may impact our consolidated financial statements in future reporting periods. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
RECENTLY ISSUED ACCOUNTING STANDARDS See Note 4 to the accompanying consolidated financial statements for a description of certain recently issued accounting standards which have impacted our consolidated financial statements, or may impact our consolidated financial statements in future reporting periods. 73 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
In accordance with the terms of the agreement, we have the ability to expand our borrowing availability under the Global Credit Facility to $1 billion through the full term of the facility, subject to the agreement of one or more new or existing lenders under the facility to increase their commitments.
In accordance with the terms of the agreement, we have the ability to expand our borrowing availability under the Global Credit Facility to $1.500 billion through the full term of the facility, subject to the agreement of one or more new or existing lenders under the facility to increase their commitments.
On a constant currency basis, net revenues decreased by $2.4 million, reflecting a decrease of $24.9 million in non-comparable store sales driven by the absence on the 53rd week, partially offset by an increase of $22.5 million in comparable store sales.
On a constant currency basis, net revenues decreased by $2.4 million, reflecting a decrease of $24.9 million in non- 57 comparable store sales driven by the absence on the 53rd week, partially offset by an increase of $22.5 million in comparable store sales.
On a comparative basis, during Fiscal 2022, we did not issue or repay any debt; and • a $48.3 million increase in payments of dividends, due to the reinstatement of our quarterly cash dividend program during Fiscal 2022 after being temporarily suspended at the beginning of the COVID-19 pandemic as a preemptive action to preserve cash and strengthen our liquidity position, as discussed in " Dividends " below, as well as an increase to the quarterly cash dividend per share.
On a comparative basis, during Fiscal 2022, we did not issue or repay any debt; and • a $48.3 million increase in payments of dividends, due to the reinstatement of our quarterly cash dividend program during Fiscal 2022 after being temporarily suspended at the beginning of the COVID-19 pandemic as a preemptive action to preserve cash and strengthen our liquidity position, as well as an increase to the quarterly cash dividend per share.
The following table summarizes the percentage change in comparable store sales related to our Asia retail business: % Change Digital commerce 24 % Brick and mortar 17 % Total comparable store sales 17 % • a $25.2 million increase related to our Asia wholesale business, reflecting increases most notably in Japan, South Korea, and Australia, partially offset by unfavorable foreign currency effects of $9.4 million. 52 Gross Profit.
The following table summarizes the percentage change in comparable store sales related to our Asia retail business: % Change Digital commerce 24 % Brick and mortar 17 % Total comparable store sales 17 % • a $25.2 million increase related to our Asia wholesale business, reflecting increases most notably in Japan, South Korea, and Australia, partially offset by unfavorable foreign currency effects of $9.4 million. 58 Gross Profit.
The overall improvement in operating margin also reflected the favorable impact of approximately 50 basis points attributable to other factors, most notably favorable channel mix. These increases in operating margin were partially offset by the unfavorable impact of 170 basis points attributable to foreign currency effects. Unallocated corporate expenses decreased by $28.8 million to $638.5 million in Fiscal 2023.
The overall improvement in operating margin also reflected the favorable impact of approximately 40 basis points attributable to other factors, most notably favorable channel mix. These increases in operating margin were partially offset by the unfavorable impact of 170 basis points attributable to foreign currency effects. Unallocated corporate expenses decreased by $28.8 million to $638.5 million in Fiscal 2023.
The following table summarizes the percentage change in our Fiscal 2023 consolidated comparable store sales as compared to the prior fiscal year: % Change Digital commerce 7 % Brick and mortar 8 % Total comparable store sales 8 % 50 Our global average store count increased by 90 stores and concession shops during Fiscal 2023 compared with the prior fiscal year, driven by new openings primarily in Asia.
The following table summarizes the percentage change in our Fiscal 2023 consolidated comparable store sales as compared to the prior fiscal year: % Change Digital commerce 7 % Brick and mortar 8 % Total comparable store sales 8 % 56 Our global average store count increased by 90 stores and concession shops during Fiscal 2023 compared with the prior fiscal year, driven by new openings primarily in Asia.
Borrowings under the Pan-Asia Credit Facilities and Pan-Asia Overdraft Facilities (collectively, the "Pan-Asia Borrowing Facilities") are guaranteed by the parent company and are granted at the sole discretion of the participating banks (as described within Note 11 to the accompanying consolidated financial statements), subject to availability of the respective banks' funds and satisfaction of certain regulatory requirements.
Borrowings under the Pan-Asia Credit Facilities and Japan Overdraft Facility (collectively, the "Pan-Asia Borrowing Facilities") are guaranteed by the parent company and are granted at the sole discretion of the participating banks (as described within Note 11 to the accompanying consolidated financial statements), subject to availability of the respective banks' funds and satisfaction of certain regulatory requirements.
A 25-basis point increase or decrease in interest rates would decrease or increase, respectively, the aggregate fair values of our Senior Notes by approximately $13 million based on certain simplifying assumptions, including an immediate across-the-board increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period.
A 25-basis point increase or decrease in interest rates would decrease or increase, respectively, the aggregate fair values of our Senior Notes by approximately $11 million based on certain simplifying assumptions, including an immediate across-the-board increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period.
No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 2% of our Fiscal 2023 net revenues, which primarily consist of Ralph Lauren and Chaps branded royalty revenues earned through our global licensing alliances.
No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 2% of our Fiscal 2024 net revenues, which primarily consist of Ralph Lauren and Chaps branded royalty revenues earned through our global licensing alliances.
Accordingly, investors and other financial statement users should consider the types of events and transactions that have affected operating trends. 49 RESULTS OF OPERATIONS Fiscal 2023 Compared to Fiscal 2022 The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions.
Accordingly, investors and other financial statement users should consider the types of events and transactions that have affected operating trends. 49 RESULTS OF OPERATIONS Fiscal 2024 Compared to Fiscal 2023 The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions.
Gross profit as a percentage of net revenues is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, pricing, the timing and level of promotional activities, foreign currency exchange rates, and fluctuations in material costs.
Gross profit as a percentage of net revenues is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, pricing, the timing and level of promotional activities, foreign currency exchange rates, and fluctuations in product costs.
Dollar against the foreign currencies under contract would result in a net increase or decrease, respectively, in the fair value of our derivative portfolio of approximately $109 million. This hypothetical net change in fair value should ultimately be largely offset by the net change in the related underlying hedged items.
Dollar against the foreign currencies under contract would result in a net increase or decrease, respectively, in the fair value of our derivative portfolio of approximately $110 million. This hypothetical net change in fair value should ultimately be largely offset by the net change in the related underlying hedged items.
The $0.49 per share decrease was driven by the lower level of net income, as previously discussed, partially offset by lower weighted-average diluted shares outstanding during Fiscal 2023 driven by our share repurchases during the last twelve months.
The $0.49 per share decrease was driven by the lower level of net income, as previously discussed, partially offset by lower weighted-average diluted shares outstanding during Fiscal 2023 driven by our share repurchases during the preceding twelve months.
For lease terms that have commenced, information has been presented separately for operating and 67 finance leases.
For lease terms that have commenced, information has been presented separately for operating and finance leases.
In response to such pressures, as well as in an effort to reduce elevated inventory levels, many U.S. retailers have become increasingly more promotional in an attempt to offset traffic declines and increase conversion.
In response to such pressures, as well as in an effort to reduce elevated inventory levels, many retailers (particularly in the U.S.) have become increasingly more promotional in an attempt to offset traffic declines and increase conversion.
Other lease commitments relate to executed lease agreements for which the related lease terms have not yet commenced as of April 1, 2023; • Inventory purchase commitments represent our legally-binding agreements to purchase fixed or minimum quantities of goods at determinable prices; • Mandatory transition tax payments represent our remaining tax obligation incurred in connection with the deemed repatriation of previously deferred foreign earnings pursuant to the TCJA (see Note 10 to the accompanying consolidated financial statements for discussion of the TCJA); and • Other commitments primarily represent our legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements; information technology-related service agreements; and pension-related obligations.
Other lease commitments relate to executed lease agreements for which the related lease terms have not yet commenced as of March 30, 2024; • Inventory purchase commitments represent our legally-binding agreements to purchase fixed or minimum quantities of goods at determinable prices; • Mandatory transition tax payments represent our remaining tax obligation incurred in connection with the deemed repatriation of previously deferred foreign earnings pursuant to the TCJA (see Note 10 to the accompanying consolidated financial statements for discussion of the TCJA); and • Other commitments primarily represent our legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements; information technology-related service agreements; and pension-related obligations.
This section provides an analysis of our results of operations for Fiscal 2023 and Fiscal 2022 as compared to the respective prior fiscal year. • Financial condition and liquidity.
This section provides an analysis of our results of operations for Fiscal 2024 and Fiscal 2023 as compared to the respective prior fiscal year. • Financial condition and liquidity.
In addition, we license to third parties for specified periods the right to access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home. 43 We organize our business into the following three reportable segments: • North America — Our North America segment, representing approximately 47% of our Fiscal 2023 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses primarily in the U.S. and Canada.
In addition, we license to third parties for specified periods the right to access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings. 44 We organize our business into the following three reportable segments: • North America — Our North America segment, representing approximately 44% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses primarily in the U.S. and Canada.
This section provides a general description of our business, global economic conditions and industry trends, and a summary of our financial performance for Fiscal 2023.
This section provides a general description of our business, global economic conditions and industry trends, and a summary of our financial performance for Fiscal 2024.
Our wholesale business in Europe is comprised primarily of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital partners. • Asia — Our Asia segment, representing approximately 22% of our Fiscal 2023 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Asia, Australia, and New Zealand.
Our wholesale business in Europe is comprised primarily of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital and licensee partners. • Asia — Our Asia segment, representing approximately 24% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Asia, Australia, and New Zealand.
A hypothetical 1% increase in our reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances as of April 1, 2023 would have reduced our Fiscal 2023 net revenues by approximately $1 million. Similarly, we evaluate our accounts receivable balances to develop expectations regarding the extent to which they will ultimately be collected.
A hypothetical 1% increase in our reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances as of March 30, 2024 would have reduced our Fiscal 2024 net revenues by approximately $1 million. Similarly, we evaluate our accounts receivable balances to develop expectations regarding the extent to which they will ultimately be collected.
Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores. • Europe — Our Europe segment, representing approximately 29% of our Fiscal 2023 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Europe and emerging markets.
Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores. • Europe — Our Europe segment, representing approximately 30% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Europe and emerging markets.
The 210 basis point decline was primarily driven by inflationary cost pressures, unfavorable foreign currency effects, and higher non-routine inventory charges recorded during Fiscal 2023 as compared to the prior fiscal year, partially offset by higher pricing.
The 210 basis point decline was primarily driven by inflationary cost pressures, unfavorable foreign currency effects, and higher non-routine inventory charges recorded during Fiscal 2023 as compared to the prior fiscal year, partially offset by higher pricing. Selling, General, and Administrative Expenses.
Our equity decreased to $2.431 billion as of April 1, 2023, compared to $2.536 billion as of April 2, 2022, due to our share repurchase activity and dividends declared during Fiscal 2023, partially offset by our comprehensive income and the net impact of stock-based compensation arrangements. 47 Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition The comparability of our operating results for the three fiscal years presented herein has been affected by certain events, including: • pretax charges incurred in connection with our restructuring activities, as well as certain other benefits (charges), as summarized below (references to "Notes" are to the notes to the accompanying consolidated financial statements): Fiscal Years Ended April 1, 2023 April 2, 2022 March 27, 2021 (millions) Restructuring and other charges, net (see Note 9) $ (43.0) $ (22.2) $ (170.5) Non-routine inventory benefits (charges) (a) (15.4) 13.3 (29.3) Impairment of assets (see Note 8) (9.7) (21.3) (96.0) Non-routine bad debt reversals (expense), net (b) 2.1 (2.4) 41.4 Total charges $ (66.0) $ (32.6) $ (254.4) (a) Non-routine inventory benefits (charges) are recorded within cost of goods sold in the consolidated statements of operations.
Our equity increased to $2.450 billion as of March 30, 2024, compared to $2.431 billion as of April 1, 2023 due to our comprehensive income and the net impact of stock-based compensation arrangements, partially offset by our share repurchase activity and dividends declared during Fiscal 2024. 47 Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition The comparability of our operating results for the three fiscal years presented herein has been affected by certain events, including: • pretax charges incurred in connection with our restructuring activities, as well as certain other benefits (charges), as summarized below (references to "Notes" are to the notes to the accompanying consolidated financial statements): Fiscal Years Ended March 30, 2024 April 1, 2023 April 2, 2022 (millions) Restructuring and other charges, net (see Note 9) $ (74.9) $ (43.0) $ (22.2) Non-routine inventory benefits (charges) (a) 4.5 (15.4) 13.3 Impairment of assets (see Note 8) — (9.7) (21.3) Non-routine bad debt reversals (expense), net (b) 0.5 2.1 (2.4) Total charges, net $ (69.9) $ (66.0) $ (32.6) (a) Non-routine inventory benefits (charges) are recorded within cost of goods sold in the consolidated statements of operations.
This section provides a discussion of our financial condition and liquidity as of April 1, 2023, which includes (i) an analysis of our financial condition as compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for Fiscal 2023 and Fiscal 2022 as compared to the respective prior fiscal year; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, our outstanding debt and covenant compliance, common stock repurchases, and payments of dividends; and (iv) a summary of our material cash requirements as of April 1, 2023. • Market risk management.
This section provides a discussion of our financial condition and liquidity as of March 30, 2024, which includes (i) an analysis of our financial condition as compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for Fiscal 2024 and Fiscal 2023 as compared to the respective prior fiscal year; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, our supplier finance program, outstanding debt and covenant compliance, common stock repurchases, and payments of dividends; and (iv) a summary of our material cash requirements as of March 30, 2024. • Market risk management.
Our retail business in Asia is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. In addition, we sell our products online through various third-party digital partner commerce sites. Our wholesale business in Asia is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
Our retail business in Asia is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. In addition, we sell our products online through various third-party digital partner commerce sites. Our wholesale business in Asia is comprised primarily of sales to department stores and various third-party digital and licensee partners.
For example, changes in economic conditions in the U.S., most notably inflationary pressures (including increases in the cost of raw materials, transportation, and salaries & benefits), rising interest rates, significant foreign currency volatility, recent bank failures, and concerns of a potential recession, continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond.
Changes in economic conditions, most notably persisting inflationary pressures (including increases in the cost of raw materials, transportation, and salaries & benefits), high interest rates, significant foreign currency volatility, bank failures, and concerns of a potential recession, continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond.
In doing so, we assess the risk of loss in the fair values of these contracts that would result from hypothetical changes in foreign currency exchange rates. This analysis assumes a like movement by the foreign currencies in our hedge portfolio against the U.S. Dollar. As of April 1, 2023, a 10% appreciation or depreciation of the U.S.
In doing so, we assess the risk of loss in the fair values of these contracts that would result from hypothetical changes in foreign currency exchange rates. This analysis assumes a like movement by the foreign currencies in our hedge portfolio against the U.S. Dollar. As of March 30, 2024, a 10% appreciation or depreciation of the U.S.
The following table details our retail store presence by segment as of the periods presented: April 1, 2023 April 2, 2022 Freestanding Stores: North America 237 239 Europe 104 95 Asia 212 170 Total freestanding stores 553 504 Concession Shops: North America 1 1 Europe 29 29 Asia 692 654 Total concession shops 722 684 Total stores 1,275 1,188 In addition to our stores, we sell products online in North America, Europe, and Asia through our various digital commerce sites, as well as through our Polo mobile app in North America.
The following table details our retail store presence by segment as of the periods presented: April 1, 2023 April 2, 2022 Freestanding Stores: North America 237 239 Europe 104 95 Asia 212 170 Total freestanding stores 553 504 Concession Shops: North America 1 1 Europe 29 29 Asia 692 654 Total concession shops 722 684 Total stores 1,275 1,188 In addition to our stores, we sold products online in North America, Europe, and Asia through our various digital commerce sites, as well as through our Ralph Lauren app in the U.S.
In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce site, www.RalphLauren.com.
In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce sites, www.RalphLauren.com and www.RalphLauren.ca.
Our investment objectives include capital preservation, maintaining adequate liquidity, diversification to minimize liquidity and credit risk, and achievement of maximum returns within the guidelines set forth in our investment policy. See Note 13 to the accompanying consolidated financial statements for further detail of the composition of our investment portfolio as of April 1, 2023.
Our investment objectives include capital preservation, maintaining adequate liquidity, diversification to minimize liquidity and credit risk, and achievement of maximum returns within the guidelines set forth in our investment policy. See Note 13 to the accompanying consolidated financial statements for further detail of the composition of our investment portfolio as of March 30, 2024.
Asia operating margin improved by 250 basis points, primarily due to the favorable impact of approximately 370 basis points related to our retail business driven by a decline in SG&A expenses as a percentage of net revenues and an increase in our gross margin.
Asia operating margin improved by 250 basis points, primarily due to the net favorable impact of approximately 380 basis points driven by a decline in SG&A expenses as a percentage of net revenues and an increase in our gross margin.
We also enter into master netting arrangements with counterparties, when possible, to further mitigate credit risk. As a result of the above considerations, we do not believe that we are exposed to undue concentration of counterparty risk with respect to our derivative contracts as of April 1, 2023.
We also enter into master netting arrangements with counterparties, when possible, to further mitigate credit risk. As a result of the above considerations, we do not believe that we are exposed to undue concentration of counterparty risk with respect to our derivative contracts as of March 30, 2024.
However, we do have in aggregate $41.0 million of derivative instruments in net asset positions held across eight creditworthy financial institutions. Foreign Currency Risk Management We manage our exposure to changes in foreign currency exchange rates using forward foreign currency exchange and cross-currency swap contracts.
However, we do have in aggregate $36.8 million of derivative instruments in net asset positions held across five creditworthy financial institutions. Foreign Currency Risk Management We manage our exposure to changes in foreign currency exchange rates using forward foreign currency exchange and cross-currency swap contracts.
As such, Fiscal 2023 ended on April 1, 2023 and was a 52-week period; Fiscal 2022 ended on April 2, 2022 and was a 53-week period; Fiscal 2021 ended on March 27, 2021 and was a 52-week period; and Fiscal 2024 will end on March 30, 2024 and will be a 52-week period.
As such, Fiscal 2024 ended on March 30, 2024 and was a 52-week period; Fiscal 2023 ended on April 1, 2023 and was a 52-week period; Fiscal 2022 ended on April 2, 2022 and was a 53-week period; and Fiscal 2025 will end on March 29, 2025 and will be a 52-week period.
Financial Condition and Liquidity We ended Fiscal 2023 in a net cash and short-term investments position (calculated as cash and cash equivalents, plus short-term investments, less total debt) of $427.2 million, as compared to $962.1 million as of the end of Fiscal 2022.
Financial Condition and Liquidity We ended Fiscal 2024 in a net cash and short-term investments position (calculated as cash and cash equivalents, plus short-term investments, less total debt) of $642.7 million, as compared to $427.2 million as of the end of Fiscal 2023.
See Note 16 to the accompanying consolidated financial statements for additional information relating to our Class A common stock repurchase program. 66 Dividends Except as discussed below, we have maintained a regular quarterly cash dividend program on our common stock since 2003.
See Note 16 to the accompanying consolidated financial statements for additional information relating to our Class A common stock repurchase program. Dividends We have generally maintained a regular quarterly cash dividend program on our common stock since 2003.
These favorable variances were partially offset by an increase in other expense, net of $8.8 million primarily driven by higher net foreign currency losses during Fiscal 2023 as compared to the prior fiscal year. Income Tax Provision. The income tax provision represents federal, foreign, state and local income taxes.
These favorable variances were partially offset by an increase in other expense, net of $8.8 million primarily driven by higher net foreign currency losses during Fiscal 2023 as compared to the prior fiscal year. 60 Income Tax Provision.
During Fiscal 2023, we spent $217.5 million on capital expenditures, as compared to $166.9 million during Fiscal 2022. Our capital expenditures during Fiscal 2023 primarily related to store openings and renovations, as well as enhancements to our information technology systems.
During Fiscal 2023, we spent $217.5 million on capital expenditures, as compared to $166.9 million during Fiscal 2022. Our capital expenditures during Fiscal 2023 primarily related to store openings and renovations, as well as enhancements to our information technology systems. Net Cash Used in Financing Activities.
A hypothetical 1% increase in the level of our allowance for doubtful accounts as of April 1, 2023 would have increased our Fiscal 2023 SG&A expenses by less than $1 million.
A hypothetical 1% increase in the level of our allowance for doubtful accounts as of March 30, 2024 would have increased our Fiscal 2024 SG&A expenses by less than $1 million.
A hypothetical 10% change in our Fiscal 2023 stock-based compensation expense would have affected our net income by approximately $6 million.
A hypothetical 10% change in our Fiscal 2024 stock-based compensation expense would have affected our net income by approximately $8 million.
Interest Rate Risk Management Sensitivity As of April 1, 2023, we had no variable-rate debt outstanding. As such, our exposure to changes in interest rates primarily relates to changes in the fair values of our fixed-rate Senior Notes. As of April 1, 2023, the aggregate fair values of our Senior Notes were $1.071 billion.
Interest Rate Risk Management Sensitivity As of March 30, 2024, we had no variable-rate debt outstanding. As such, our exposure to changes in interest rates primarily relates to changes in the fair values of our fixed-rate Senior Notes. As of March 30, 2024, the aggregate fair values of our Senior Notes were $1.063 billion.
Investment Risk Management As of April 1, 2023, we had cash and cash equivalents on-hand of $1.529 billion, consisting of deposits in interest bearing accounts, investments in money market deposit accounts, and investments in time deposits with original maturities of 90 days or less.
Investment Risk Management As of March 30, 2024, we had cash and cash equivalents on-hand of $1.662 billion, consisting of deposits in interest bearing accounts, investments in money market deposit accounts, and investments in time deposits with original maturities of 90 days or less.
Additionally, during Fiscal 2023 and Fiscal 2022, we recognized income of $3.5 million and $4.0 million, respectively, related to consideration received from Regent in connection with the sale of Club Monaco.
Additionally, during Fiscal 2023 and Fiscal 2022, we recognized income of $3.5 million and $4.0 million, respectively, related to consideration received from Regent in connection with our previously sold Club Monaco business.
A hypothetical 1% increase in the level of our inventory reserves as of April 1, 2023 would have decreased our Fiscal 2023 gross profit by approximately $2 million. Impairment of Goodwill and Other Intangible Assets Goodwill and certain other intangible assets deemed to have indefinite useful lives are not amortized.
A hypothetical 1% increase in the level of our inventory reserves as of March 30, 2024 would have decreased our Fiscal 2024 gross profit by approximately $3 million. 70 Impairment of Goodwill and Other Intangible Assets Goodwill and certain other intangible assets deemed to have indefinite useful lives are not amortized.
The net decrease in cash provided by operating activities was due to a net unfavorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year period, as well as the decline in net income before non-cash charges.
The net increase in cash provided by operating activities was due to a net favorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year, as well as an increase in net income before non-cash charges.
Our operating performance for Fiscal 2023 reflected revenue increases of 3.6% on a reported basis and 9.4% on a constant currency basis, as defined within " Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition " below.
Our operating performance for Fiscal 2024 reflected revenue increases of 2.9% on a reported basis and 2.7% on a constant currency basis, as defined within " Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition " below.
During Fiscal 2023 and Fiscal 2022, our operating results were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $66.0 million and $32.6 million, respectively, which had an after-tax effect of reducing net income by $52.9 million, or $0.76 per diluted share, and $23.2 million, or $0.31 per diluted share, respectively.
During Fiscal 2024 and Fiscal 2023, our operating results were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $69.9 million and $66.0 million, respectively, which had an after-tax effect of reducing net income by $52.6 million, or $0.80 per diluted share, and $52.9 million, or $0.76 per diluted share, respectively.
Operating income and margin for our segments, as well as a discussion of the changes in each reportable segment's operating margin from the prior fiscal year, are provided below: Fiscal Years Ended April 1, 2023 April 2, 2022 Operating Income Operating Margin Operating Income Operating Margin $ Change Margin Change (millions) (millions) (millions) Segment: North America $ 543.2 18.0% $ 676.7 22.8% $ (133.5) (480 bps) Europe 406.5 22.1% 444.0 24.9% (37.5) (280 bps) Asia 289.6 20.3% 228.8 17.8% 60.8 250 bps Other non-reportable segments (a) 146.4 93.1% 138.4 75.7% 8.0 1,740 bps 1,385.7 1,487.9 (102.2) Unallocated corporate expenses (638.5) (667.3) 28.8 Unallocated restructuring and other charges, net (43.0) (22.2) (20.8) Total operating income $ 704.2 10.9% $ 798.4 12.8% $ (94.2) (190 bps) (a) Reflects the disposition of our former Club Monaco business at the end of the first quarter of Fiscal 2022.
The decline in operating income as a percentage of net revenues was primarily driven by the decrease in our gross margin and higher net restructuring-related charges, impairment of assets, and certain other charges (benefits) recorded during Fiscal 2023 as compared to the prior fiscal year, partially offset by the decline in SG&A expenses as a percentage of net revenues, all as previously discussed. 59 Operating income and margin for our segments, as well as a discussion of the changes in each reportable segment's operating margin from the prior fiscal year, are provided below: Fiscal Years Ended April 1, 2023 April 2, 2022 Operating Income Operating Margin Operating Income Operating Margin $ Change Margin Change (millions) (millions) (millions) Segment: North America $ 543.2 18.0% $ 676.7 22.8% $ (133.5) (480 bps) Europe 406.5 22.1% 444.0 24.9% (37.5) (280 bps) Asia 289.6 20.3% 228.8 17.8% 60.8 250 bps Other non-reportable segments (a) 146.4 93.1% 138.4 75.7% 8.0 1,740 bps 1,385.7 1,487.9 (102.2) Unallocated corporate expenses (638.5) (667.3) 28.8 Unallocated restructuring and other charges, net (43.0) (22.2) (20.8) Total operating income $ 704.2 10.9% $ 798.4 12.8% $ (94.2) (190 bps) (a) Reflects the disposition of our former Club Monaco business at the end of the first quarter of Fiscal 2022.
This section discusses how we manage our risk exposures related to foreign currency exchange rates, interest rates, and our investments as of April 1, 2023. • Critical accounting policies.
This section discusses how we manage our risk exposures related to foreign currency exchange rates, interest rates, and our investments as of March 30, 2024. • Critical accounting policies.
North America operating margin declined by 480 basis points, primarily due to the unfavorable impacts of approximately 320 basis points and 50 basis points related to our retail and wholesale businesses, respectively, both driven by an increase in SG&A expenses as a percentage of net revenues and a decline in our gross margin.
North America operating margin declined by 480 basis points, primarily due to the net unfavorable impacts of approximately 370 basis points driven by an increase in SG&A expenses as a percentage of net revenues and a decline in our gross margin.
Unallocated restructuring and other charges, net increased by $20.8 million to $43.0 million in Fiscal 2023, as previously discussed above and in Note 9 to the accompanying consolidated financial statements. 54 Non-operating Income (Expense), Net.
Unallocated restructuring and other charges, net increased by $20.8 million to $43.0 million in Fiscal 2023, as previously discussed above and in Note 9 to the accompanying consolidated financial statements. Non-operating Income (Expense), Net. During Fiscal 2023 and Fiscal 2022, we reported non-operating expense, net, of $12.3 million and $43.8 million, respectively.
Generally, once stock option values are determined, accounting practices do not permit them to be changed, even if the estimates used are different from actual results. No stock options were granted during any of the fiscal years presented.
Generally, once stock option values are determined, accounting practices do not permit them to be changed, even if the estimates used are different from actual results. No stock options were granted during any of the fiscal years presented. See Note 18 to the accompanying consolidated financial statements for further discussion.
During Fiscal 2023, we generated $411.0 million of net cash flows from our operations. As of April 1, 2023, we had $1.566 billion in cash, cash equivalents, and short-term investments, of which $930.4 million were held by our subsidiaries domiciled outside the U.S. We are not dependent on foreign cash to fund our domestic operations.
During Fiscal 2024, we generated $1.070 billion of net cash flows from our operations. As of March 30, 2024, we had $1.783 billion in cash, cash equivalents, and short-term investments, of which $962.0 million were held by our subsidiaries domiciled outside the U.S. We are not dependent on foreign cash to fund our domestic operations.
This increase was realized despite the transition of our Chaps business to a fully licensed business model during the second quarter of Fiscal 2022. 51 This increase was partially offset by: • a $6.0 million decrease related to our North America retail business, reflecting the absence of the 53rd week, which resulted in incremental net revenues of approximately $28 million during the prior fiscal year.
This increase was partially offset by: • a $6.0 million decrease related to our North America retail business, reflecting the absence of the 53rd week, which resulted in incremental net revenues of approximately $28 million during the prior fiscal year.
The above table also excludes the following: (i) amounts recorded in current liabilities in our consolidated balance sheet as of April 1, 2023, which will be paid within one year, other than lease obligations, mandatory transition tax payments, and accrued interest payments on debt; and (ii) non-current liabilities that have no cash outflows associated with them (e.g., deferred income), or the cash outflows associated with them are uncertain or do not represent a "purchase obligation" as such term is used herein (e.g., deferred taxes, derivative financial instruments, and other miscellaneous items).
The above table also excludes the following: (i) amounts recorded in current liabilities in our consolidated balance sheet as of March 30, 2024, which will be paid within one year, other than lease obligations, mandatory transition tax payments, and accrued interest payments on debt; and (ii) non-current liabilities that have no cash outflows associated with them (e.g., deferred income), or the cash outflows associated with them are uncertain or do not represent a "purchase obligation" as such term is used herein (e.g., deferred taxes, derivative financial instruments, asset retirement obligations, and other miscellaneous items). 67 We also have certain contractual arrangements that would require us to make payments if certain events or circumstances occur.
See Note 12 to the accompanying consolidated financial statements for further discussion. In evaluating finite-lived intangible assets for recoverability, we use our best estimate of future cash flows expected to result from the use of the asset and its eventual disposition where probable.
In evaluating finite-lived intangible assets for recoverability, we use our best estimate of future cash flows expected to result from the use of the asset and its eventual disposition where probable.
Non-operating income (expense), net is comprised of interest expense, interest income, and other income (expense), net, which includes foreign currency gains (losses), equity in income (losses) from our equity-method investees, and other non-operating expenses. During Fiscal 2023 and Fiscal 2022, we reported non-operating expense, net, of $12.3 million and $43.8 million, respectively.
Non-operating income (expense), net is comprised of interest expense, interest income, and other income (expense), net, which includes foreign currency gains (losses), equity in income (losses) from our equity-method investees, and other non-operating expenses. During Fiscal 2024, we reported non-operating income, net, of $21.0 million as compared to non-operating expense, net of $12.3 million during Fiscal 2023.
Excluded from the above contractual obligations table is the non-current liability for unrecognized tax benefits of $93.8 million as of April 1, 2023, as we cannot make a reliable estimate of the period in which the liability will be settled, if ever.
Excluded from the above contractual obligations table is the non-current liability for unrecognized tax benefits of $118.7 million as of March 30, 2024, as we cannot make a reliable estimate of the period in which the liability will be settled, if ever.
See Note 18 to the accompanying consolidated financial statements for further discussion. 73 Sensitivity The assumptions used in calculating the grant date fair values of our stock-based compensation awards represent our best estimates. In addition, projecting the achievement level of certain performance-based awards, as well as estimating the number of awards expected to be forfeited, requires judgment.
Sensitivity The assumptions used in calculating the grant date fair values of our stock-based compensation awards represent our best estimates. In addition, projecting the achievement level of certain performance-based awards, as well as estimating the number of awards expected to be forfeited, requires judgment.
Our operating results during Fiscal 2023 and Fiscal 2022 were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $66.0 million and $32.6 million, respectively. Operating income as a percentage of net revenues was 10.9% in Fiscal 2023, reflecting a 190 basis point decline from Fiscal 2022.
Our operating results during Fiscal 2024 and Fiscal 2023 were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $69.9 million and $66.0 million, respectively. Operating income as a percentage of net revenues was 11.4% in Fiscal 2024, reflecting a 50 basis point improvement from Fiscal 2023.
Substantially all of our inventories are comprised of finished goods, which are stated at the lower of cost or estimated realizable value, with cost determined on a weighted-average cost basis. 70 The estimated net realizable value of inventory is determined based on an analysis of historical sales trends of our individual product lines, the impact of market trends and economic conditions (including those resulting from pandemic diseases and other catastrophic events), and a forecast of future demand, giving consideration to the value of current orders in-house for future sales of inventory, as well as plans to sell inventory through our outlet stores, among other liquidation channels.
The estimated net realizable value of inventory is determined based on an analysis of historical sales trends of our individual product lines, the impact of market trends and economic conditions (including those resulting from pandemic diseases and other catastrophic events), and a forecast of future demand, giving consideration to the value of current orders in-house for future sales of inventory, as well as plans to sell inventory through our outlet stores, among other liquidation channels.
During Fiscal 2022 and Fiscal 2021, we recorded restructuring charges of $4.0 million and $159.1 million, respectively, primarily consisting of severance and benefits costs and other cash charges, as well as other charges of $11.8 million and $11.4 million, respectively, primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired.
During Fiscal 2024 and Fiscal 2023, we recorded net restructuring charges and benefits of $55.8 million and $19.2 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $14.0 million and $23.8 million, respectively, primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired.
On a constant currency basis, net revenues increased by $253.7 million, reflecting increases of $145.2 million in comparable store sales and $108.5 million in non-comparable store sales.
On a constant currency basis, net revenues increased by $81.5 million, reflecting increases of $66.7 million in comparable store sales and $14.8 million in non-comparable store sales.
The following table presents the total availability, borrowings outstanding, and remaining availability under our credit and overdraft facilities and Commercial Paper Program as of April 1, 2023: April 1, 2023 Description (a) Total Availability Borrowings Outstanding Remaining Availability (millions) Global Credit Facility and Commercial Paper Program (b) $ 500 $ 12 (c) $ 488 Pan-Asia Credit Facilities 37 — 37 Pan-Asia Overdraft Facilities 52 — 52 (a) As defined in Note 11 to the accompanying consolidated financial statements.
The following table presents the total availability, borrowings outstanding, and remaining availability under our credit and overdraft facilities and Commercial Paper Program as of March 30, 2024: March 30, 2024 Description (a) Total Availability Borrowings Outstanding Remaining Availability (millions) Global Credit Facility and Commercial Paper Program (b) $ 750 $ 12 (c) $ 738 Pan-Asia Credit Facilities 36 — 36 Japan Overdraft Facility 33 — 33 (a) As defined in Note 11 to the accompanying consolidated financial statements.
During Fiscal 2022, we resumed activities under our common stock repurchase program and repurchased $450.5 million of shares of our Class A common stock, and an additional $42.1 million in shares of our Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our long-term stock incentive plans.
During Fiscal 2024, we used $398.2 million to repurchase shares of our Class A common stock pursuant to our common stock repurchase program, and an additional $51.5 million in shares of our Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our long-term stock incentive plans.
Non-routine inventory charges, net recorded during Fiscal 2023 primarily related to the Russia-Ukraine war (approximately $10 million) and delays in U.S. customs shipment reviews and approvals (approximately $5 million). Non-routine inventory benefits, net recorded during Fiscal 2022 related to COVID-19-related reserves.
Non-routine inventory charges, net recorded during Fiscal 2023 primarily related to the Russia-Ukraine war (approximately $10 million) and delays in U.S. customs shipment reviews and approvals (approximately $5 million). Non-routine inventory benefits, net recorded during Fiscal 2022 related to COVID-19-related reserves. (b) Non-routine bad debt reversals (expense), net are recorded within SG&A expenses in the consolidated statements of operations.
While the suspension of our operations in Russia has not resulted in a material impact to our consolidated financial statements, our business has been impacted by the broader macroeconomic implications resulting from the war, including unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and volatility in financial markets, among other factors, which have adversely impacted consumer sentiment and confidence.
Although our voluntary decision to suspend operations in Russia has not resulted in a material impact to our consolidated financial statements and our ongoing operations in Israel are also not material, our business has been, and may continue to be, impacted by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and volatility in financial markets, among other factors, which have adversely impacted consumer sentiment and confidence.

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