þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended April 2, 2016 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-2622036 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
650 Madison Avenue, New York, New York | 10022 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Class A Common Stock, $.01 par value | New York Stock Exchange |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | Yes þ No o | |
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. | Yes o No þ | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes þ No o | |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | Yes þ No o | |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. | o | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. | ||
Large accelerated filer þ | Accelerated filer o | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | Yes o No þ | |
The aggregate market value of the registrant's voting common stock held by non-affiliates of the registrant was approximately $6,341,781,793 as of September 25, 2015, the last business day of the registrant's most recently completed second fiscal quarter based on the closing price of the common stock on the New York Stock Exchange. | ||
At May 13, 2016, 57,020,766 shares of the registrant's Class A common stock, $.01 par value and 25,881,276 shares of the registrant's Class B common stock, $.01 par value were outstanding. | ||
Part III incorporates information from certain portions of the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended April 2, 2016. |
• | the loss of key personnel, including Mr. Ralph Lauren, or other changes in our executive and senior management team or to our operating structure, and our ability to effectively transfer knowledge during periods of transition; |
• | our ability to achieve anticipated operating enhancements and/or cost reductions from our restructuring plans, which could include the potential sale, discontinuance, or consolidation of certain of our brands; |
• | our ability to successfully implement our growth strategies and to capitalize on our repositioning initiatives in certain brands, regions, and merchandise categories; |
• | our efforts to improve the efficiency of our distribution system and to continue to enhance, upgrade, and/or transition our global information technology systems and our global e-commerce platform; |
• | our ability to secure our facilities and systems and those of our third-party service providers from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, or similar Internet or email events; |
• | our exposure to currency exchange rate fluctuations from both a transactional and translational perspective, and risks associated with increases in the costs of raw materials, transportation, and labor; |
• | our ability to continue to maintain our brand image and reputation and protect our trademarks; |
• | the impact of the volatile state of the global economy, stock markets, and other global economic conditions on us, our customers, our suppliers, and our vendors and on our ability and their ability to access sources of liquidity; |
• | the impact to our business resulting from changes in consumers' ability or preferences to purchase premium lifestyle products that we offer for sale and our ability to forecast consumer demand, which could result in either a build-up or shortage of inventory; |
• | changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors, and consolidations, liquidations, restructurings, and other ownership changes in the retail industry; |
• | a variety of legal, regulatory, tax, political, and economic risks, including risks related to the importation and exportation of products, tariffs, and other trade barriers which our international operations are subject to and other risks associated with our international operations, such as compliance with the Foreign Corrupt Practices Act or violations of other anti-bribery and corruption laws prohibiting improper payments, and the burdens of complying with a variety of foreign laws and regulations, including tax laws, trade and labor restrictions, and related laws that may reduce the flexibility of our business; |
• | the impact to our business of events of unrest and instability that are currently taking place in certain parts of the world, as well as from any terrorist action, retaliation, and the threat of further action or retaliation; |
• | our ability to continue to expand or grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result; |
• | changes in our tax obligations and effective tax rates; |
• | changes in the business of, and our relationships with, major department store customers and licensing partners; |
• | our intention to introduce new products or enter into or renew alliances and exclusive relationships; |
• | our ability to access sources of liquidity to provide for our cash needs, including our debt obligations, payment of dividends, capital expenditures, and potential repurchases of our Class A common stock; |
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• | our ability to open new retail stores, concession shops, and e-commerce sites in an effort to expand our direct-to-consumer presence; |
• | our ability to make certain strategic acquisitions and successfully integrate the acquired businesses into our existing operations; |
• | the impact to our business resulting from potential costs and obligations related to the early termination of our long-term, non-cancellable leases; |
• | the potential impact to the trading prices of our securities if our Class A common stock share repurchase activity and/or cash dividend rate differs from investors' expectations; |
• | our ability to maintain our credit profile and ratings within the financial community; and |
• | the potential impact on our operations and on our suppliers and customers resulting from natural or man-made disasters. |
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Item 1. | Business. |
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• | International Growth; |
• | Direct-to-Consumer Growth; |
• | Product Innovation and Brand Extension Growth; |
• | Investment in Operational Infrastructure; |
• | Global Talent Development and Management; and |
• | Strong Financial Management and Cash Flow Reinvestment. |
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• | 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, Polo Sport, Double RL, Lauren Ralph Lauren, Ralph by Ralph Lauren, Polo and RLX Golf, Polo Ralph Lauren Children, Denim & Supply Ralph Lauren, Chaps, Club Monaco, and American Living, among others; |
• | Accessories — Our accessories products encompass a broad range for both men and women, including footwear, eyewear, watches, fine jewelry, hats, belts, and leather goods, including handbags and luggage, which are sold under various brand names, including Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Club Monaco, among others; |
• | Home — Our coordinated home products include bedding and bath products, furniture, fabric and wallpaper, lighting, paint, tabletop, and giftware; |
• | Fragrance — Our fragrance products capture the essence of Ralph Lauren's men's and women's brands with numerous labels, designed to appeal to a variety of audiences. Women's fragrance products are sold under our Safari, Ralph Lauren Blue, Lauren, Romance collection, RALPH collection, and Big Pony collection brands. Men's fragrance products are sold under our Safari, Polo Sport, Polo Green, Polo Blue, Polo Blue Sport, Purple Label, Polo Black, Double Black, Big Pony collection, Polo Red collection, and Polo Supreme Oud brands; and |
• | Restaurants — Our restaurants translate Mr. R. Lauren's distinctive vision into places to gather with family and friends to enjoy fine food. Our restaurants include The Polo Bar and Ralph’s Coffee located in New York City, RL Restaurant located in Chicago, and Ralph’s located in Paris. |
1. | Ralph Lauren Luxury — Our Ralph Lauren Luxury global brand group includes: |
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2. | Polo Ralph Lauren — Our Polo Ralph Lauren global brand group includes: |
3. | Lauren — Our Lauren global brand group includes: |
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4. | Denim & Supply — Inspired by the warehouse and artist communities of Brooklyn, New York, and the authentic style found in the music festival scene, Denim & Supply represents a laid-back style of clothes that is urban, rustic, and bohemian. Denim & Supply Ralph Lauren is available at our Denim & Supply stores around the world, at Macy's and Hudson's Bay in North America, select department stores in Europe and Asia, and in specialty stores and concession shops in Asia. In addition, Denim & Supply is available online at our Ralph Lauren e-commerce sites, including RalphLauren.com. |
5. | Club Monaco — Founded in 1985, Club Monaco designs and markets its own clothing and accessories for men and women, offering key fashion pieces with modern, urban sophistication and a selection of updated classics. Club Monaco apparel and accessories are available exclusively at Club Monaco stores around the world, as well as online at our Club Monaco e-commerce sites, ClubMonaco.com and ClubMonaco.ca. Club Monaco is also available in Asia through our licensing arrangements. |
6. | Ralph Lauren Home — Ralph Lauren Home presents home furnishings and accessories that reflect the style and craftsmanship synonymous with the name Ralph Lauren. Ralph Lauren Home includes furniture, bed and bath linens, china, crystal, silver, decorative accessories and gifts, as well as lighting, fabric, wallcovering, and floorcovering. Ralph Lauren Home offers exclusive luxury goods at select Ralph Lauren stores, home specialty stores, trade showrooms, and online at our Ralph Lauren e-commerce sites, including RalphLauren.com. The complete world of Ralph Lauren Home can be explored online at RalphLaurenHome.com. Ralph Lauren also offers paint in over 400 palettes. Ralph Lauren Paint is offered at select specialty stores in the U.S. and The Home Depot. The complete color palette, paint how-to's, and a guide to professional painters can be explored online at RalphLaurenPaint.com. |
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Location | Number of Doors | ||
The Americas(a) | 7,741 | ||
Europe(b) | 5,625 | ||
Asia(c) | 136 | ||
Total | 13,502 |
(a) | Includes the U.S., Canada, and Latin America. |
(b) | Includes the Middle East. |
(c) | Includes Australia and New Zealand. |
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Location | Ralph Lauren Stores | ||
The Americas(a) | 56 | ||
Europe | 29 | ||
Asia(b) | 59 | ||
Total | 144 |
(a) | Includes the U.S. and Canada. |
(b) | Includes Australia. |
Location | Club Monaco Stores | ||
The Americas(a) | 70 | ||
Europe | 7 | ||
Total | 77 |
(a) | Includes the U.S. and Canada. |
Location | Factory Stores | ||
The Americas(a) | 168 | ||
Europe | 58 | ||
Asia(b) | 46 | ||
Total | 272 |
(a) | Includes the U.S. and Canada. |
(b) | Includes Australia. |
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• | Our North American e-commerce sites located at www.RalphLauren.com and www.ClubMonaco.com, as well as our Club Monaco site in Canada located at www.ClubMonaco.ca; |
• | Our Ralph Lauren e-commerce sites in Europe, including www.RalphLauren.co.uk, www.RalphLauren.fr, and www.RalphLauren.de; and |
• | Our Ralph Lauren e-commerce sites in Asia, including www.RalphLauren.co.jp, www.RalphLauren.co.kr, www.RalphLauren.asia, and www.RalphLauren.com.au. |
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Category | Licensed Products | Licensing Partners | ||
Men's Apparel | Underwear and Sleepwear | Hanesbrands, Inc. (includes Japan) | ||
Chaps, Lauren, and Ralph Tailored Clothing | Peerless Clothing International, Inc. | |||
Beauty Products | Fragrances, Cosmetics, Color, and Skin Care | L'Oreal S.A. (global) | ||
Accessories | Eyewear | Luxottica Group, S.p.A. (global) | ||
Home(a) | Bedding and Bath | Ichida Co., Ltd. and Kohl's Illinois, Inc. | ||
Utility and Blankets | Hollander Sleep Products LLC, Ichida Co., Ltd., and Kohl's Illinois, Inc. | |||
Fabric and Wallpaper | P. Kaufmann, Inc. |
(a) | Our Home products are sold under our Ralph Lauren Home, Lauren Ralph Lauren, and Chaps brands. As of April 2, 2016, we had agreements with 11 Home product licensing partners. |
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• | anticipate and respond to changing consumer demands in a timely manner; |
• | maintain favorable brand recognition, loyalty, and reputation for quality; |
• | develop and produce high quality products that appeal to consumers; |
• | appropriately source raw materials at cost-effective prices; |
• | appropriately price our products; |
• | provide strong and effective marketing support; |
• | ensure product availability; and |
• | obtain additional points of distribution and sufficient retail floor space, and effectively present our products to consumers. |
Geographic Region | Facility Type | Facility Location | Facility Ownership | |||
U.S. | Wholesale and Retail distribution center | Greensboro, North Carolina | Owned | |||
Wholesale and Retail distribution center | High Point, North Carolina | Leased | ||||
Wholesale distribution center | High Point, North Carolina | Leased | ||||
Retail distribution center | High Point, North Carolina(a) | Owned | ||||
Distribution center | Chino Hills, California | Third-party | ||||
Distribution center | Miami, Florida | Third-party | ||||
Canada | Distribution center | Toronto, Ontario(b) | Third-party | |||
Europe | Distribution center | Parma, Italy(c) | Third-party | |||
Japan | Distribution center | Yokohama, Japan(d) | Third-party | |||
South Korea | Distribution center | Bugok, South Korea(e) | Leased | |||
Greater China and Southeast Asia(f) | Distribution center | Tuen Mun, Hong Kong(g) | Third-party | |||
Latin America | Distribution center | Colón, Panama | Third-party |
(a) | This distribution center performs customer order fulfillment for our RalphLauren.com and ClubMonaco.com e-commerce operations and our Ralph Lauren, Polo, and Club Monaco retail stores located in the U.S. |
(b) | This distribution center performs customer order fulfillment for our businesses in Canada, including our e-commerce operations. |
(c) | This distribution center performs customer order fulfillment for our European businesses, including our e-commerce operations. |
(d) | This distribution center performs customer order fulfillment for our businesses in Japan, including our e-commerce operations. |
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(e) | This distribution center performs customer order fulfillment for our businesses in South Korea, including our e-commerce operations. |
(f) | Includes China, Hong Kong, Macau, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia, and New Zealand. |
(g) | This distribution center performs customer order fulfillment for our businesses in Greater China and Southeast Asia, including our e-commerce operations. |
• | comprehensive order processing; |
• | production and design information; |
• | accounting information; and |
• | an enterprise view of information for our design, marketing, manufacturing, importing, and distribution functions. |
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• | PURPLE LABEL; |
• | DOUBLE RL; |
• | RRL; |
• | RLX; |
• | LAUREN RALPH LAUREN; |
• | DENIM & SUPPLY RALPH LAUREN; |
• | PINK PONY; |
• | LAUREN; |
• | RALPH; |
• | CHAPS; |
• | CLUB MONACO; |
• | AMERICAN LIVING; and |
• | Various other trademarks, including those pertaining to fragrances and cosmetics. |
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Ralph Lauren | Age 76 | Mr. R. Lauren has been our Executive Chairman and Chief Creative Officer since November 2015, and a director of the Company since prior to our initial public offering in 1997. He had previously been our Chairman and Chief Executive Officer since prior to our initial public offering in 1997 until November 2015. In addition, he was previously a member of our Advisory Board or the Board of Directors of our predecessors since their organization. He founded our business in 1967. For nearly five decades, Mr. R. Lauren has cultivated the iconography of America into a global lifestyle brand. | ||
Stefan Larsson | Age 41 | Mr. Larsson has been our President and Chief Executive Officer, and a director of the Company since November 2015. He was Global President of Old Navy, Inc. a division of The Gap, Inc., from October 2012 through October 2015. Previously, Mr. Larsson held various leadership positions at H&M Hennes & Mauritz AB (“H&M”), serving as Head of Global Sales from 2010 to 2012; Head of Global Expansion from 2009 to 2010; Head of Operations, Global Expansion from 2007 to 2009; and Regional Manager, U.S. West Coast from 2005 to 2007. Prior to that, he served in numerous global roles at H&M with responsibility for products, including merchandising, planning, and production. | ||
Valérie Hermann | Age 53 | Ms. Hermann has been our Global Brand President of Luxury, Women's Collections, and World of Accessories since May 2016. She served as our President of Luxury Collections from April 2014 through April 2016. She was President and Chief Executive Officer of Reed Krakoff Co. from April 2011 through March 2014. From 2005 to 2011, Ms. Hermann served as Chief Executive Officer of Saint Laurent Paris. Prior to that, she held various positions at LVMH Moët Hennessy Louis Vuitton, including Director of Women's Ready to Wear at Dior. | ||
David Lauren | Age 44 | Mr. D. Lauren is our Executive Vice President of Global Advertising, Marketing, and Communications. He has been a director of the Company since August 2013. Mr. D. Lauren oversees the Company's global print and digital advertising campaigns, corporate and fashion communications, strategic marketing partnerships, social media platforms, and key philanthropic and citizenship initiatives. Mr. D. Lauren has been instrumental in growing the Company's global e-commerce business and building the Company's global fashion image as it has expanded internationally. He serves on the board of trustees of the Ralph Lauren Center for Cancer Care and Prevention and the board of directors of The National Museum of American History. Mr. D. Lauren is also the President of The Polo Ralph Lauren Foundation. Before joining the Company in 2000, he was Editor-In-Chief and President of Swing, a general interest publication for Generation X. Mr. D. Lauren is the son of Mr. R. Lauren. | ||
Robert L. Madore | Age 51 | Mr. Madore has been our Corporate Senior Vice President and Chief Financial Officer since April 2015. He served as Senior Vice President of Finance of the Company from December 2010 through March 2015, and was Senior Vice President of Operations and Chief Financial Officer of the Company’s retail division from 2004 to December 2010. From 2001 to 2003, Mr. Madore was Chief Operating Officer and Chief Financial Officer of Futurebrand, a division of Mccann Ericsson Worldwide. Prior to that, he held various executive management positions at Nine West Group, Inc. starting in 1995. |
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Item 1A. | Risk Factors |
• | higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the U.S.; |
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• | higher than anticipated lease termination and store closure costs (see "Our business is subject to risks associated with leasing real estate and other assets under long-term, non-cancellable leases"); |
• | failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge; |
• | failure to maintain adequate controls and procedures while executing, and subsequent to completing, our restructuring plans; |
• | diversion of management attention from ongoing business activities and/or a decrease in employee morale; and |
• | attrition beyond any planned reduction in workforce. |
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• | the burdens of complying with a variety of foreign laws and regulations, including trade, labor, and product safety trading restrictions; |
• | compliance with U.S. and other country laws relating to foreign operations, including, but not limited to, the Foreign Corrupt Practices Act, which prohibits U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business, and the U.K. Bribery Act, which prohibits U.K. and related companies from any form of bribery; |
• | unexpected changes in laws, judicial processes, or regulatory requirements; |
• | adapting to local customs and culture; and |
• | new tariffs or other barriers in certain international markets. |
• | political instability and terrorist attacks; |
• | changes in diplomatic and trade relationships; and |
• | general economic fluctuations in specific countries or markets. |
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• | changes in social, political, and economic conditions, including those which may result from the outcome of the 2016 U.S. presidential election, or terrorist acts that could result in the disruption of trade from the countries in which our manufacturers or suppliers are located; |
• | the imposition of additional regulations relating to imports or exports, and costs of complying with laws relating to the identification and reporting of the sources of minerals used in our products; |
• | the imposition of additional duties, taxes, and other charges on imports or exports; |
• | significant fluctuations in the cost of raw materials and commodities; |
• | increases in the cost of labor, travel, and transportation; |
• | disruptions of shipping and international trade caused by natural and man-made disasters; |
• | significant delays in the delivery of cargo due to security considerations; |
• | pandemic and epidemic diseases, which could result in closed factories, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in infected areas; |
• | the imposition of anti-dumping or countervailing duty proceedings resulting in the potential assessment of special anti-dumping or countervailing duties; and |
• | the imposition of sanctions in the form of additional duties either by the U.S. or its trading partners to remedy perceived illegal actions by national governments. |
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• | general business conditions; |
• | economic downturns; |
• | employment levels; |
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• | downturns in the stock market; |
• | interest rates; |
• | foreign currency exchange rates; |
• | the housing market; |
• | consumer debt levels; |
• | the availability of consumer credit; |
• | commodity prices; |
• | taxation; and |
• | consumer confidence in future economic conditions. |
• | anticipating and responding to changing consumer demands in a timely manner; |
• | creating and maintaining favorable brand recognition, loyalty, and a reputation for quality; |
• | developing and maintaining innovative, high-quality products in sizes, colors, and styles that appeal to consumers; |
• | appropriately sourcing raw materials at cost-effective prices; |
• | appropriately pricing products; |
• | anticipating and maintaining proper inventory levels; |
• | providing strong and effective marketing support; |
• | recruiting and retaining key employees; |
• | creating an acceptable value proposition for retail customers; |
• | ensuring product availability and optimizing supply chain and distribution efficiencies with manufacturers and retailers; |
• | obtaining sufficient retail floor space and effective presentation of our products at retail stores; |
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• | maintaining and growing market share; and |
• | protecting our intellectual property. |
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• | obtain capital; |
• | manage its labor relations; |
• | maintain relationships with its suppliers and customers; and |
• | manage its credit and bankruptcy risks effectively. |
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Item 1B. | Unresolved Staff Comments. |
Item 2. | Properties. |
Location | Use | Approximate Square Feet | ||
Greensboro, NC | Wholesale and retail distribution facility | 1,500,000 | ||
NC Highway 66, High Point, NC | Wholesale and retail distribution facility | 847,000 | ||
N. Pendleton Street, High Point, NC | Retail e-commerce call center and distribution facility | 805,000 | ||
625 Madison Avenue, NYC | Corporate offices and showrooms | 412,000 | ||
Eagle Hill Drive, High Point, NC | Wholesale distribution facility | 343,000 | ||
650 Madison Avenue, NYC | Executive and corporate offices, design studio, and showrooms | 270,000 | ||
Lyndhurst, NJ | Corporate and retail administrative offices | 178,000 | ||
Geneva, Switzerland | European corporate offices | 107,000 | ||
7th Avenue, NYC | Corporate offices, design studio, and Women's showrooms | 104,000 | ||
Gateway Office, Hong Kong | Asia corporate offices | 56,000 | ||
Manhattan Place, Hong Kong | Asia sourcing offices | 46,000 | ||
5th Avenue, NYC | Retail flagship store | 39,000 | ||
888 Madison Avenue, NYC | Retail flagship store | 37,900 | ||
N. Michigan Avenue, Chicago | Retail flagship store | 37,500 | ||
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 | ||
Lee Gardens, Hong Kong | Retail flagship store | 20,200 | ||
N. Rodeo Drive, Beverly Hills | Retail flagship store | 19,400 |
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Item 3. | Legal Proceedings. |
Item 4. | Mine Safety Disclosures. |
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Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Market Price of Class A Common Stock | Dividends Declared per Common Share | |||||||||||
High | Low | |||||||||||
Fiscal 2016: | ||||||||||||
First Quarter | $ | 141.08 | $ | 127.77 | $ | 0.50 | ||||||
Second Quarter | 135.67 | 104.34 | 0.50 | |||||||||
Third Quarter | 137.38 | 103.29 | 0.50 | |||||||||
Fourth Quarter | 115.85 | 82.15 | 0.50 | |||||||||
Fiscal 2015: | ||||||||||||
First Quarter | $ | 164.75 | $ | 141.93 | $ | 0.45 | ||||||
Second Quarter | 174.98 | 152.22 | 0.45 | |||||||||
Third Quarter | 185.92 | 153.39 | 0.45 | |||||||||
Fourth Quarter | 187.49 | 127.29 | 0.50 |
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 27, 2015 to January 23, 2016 | 819 | (b) | $ | 113.40 | — | $ | 200 | |||||||
January 24, 2016 to February 20, 2016 | 1,167,700 | 85.61 | 1,167,700 | 100 | ||||||||||
February 21, 2016 to April 2, 2016 | 946 | (b) | 94.89 | — | 100 | |||||||||
1,169,465 | 1,167,700 |
(a) | As of April 2, 2016, the remaining availability under our Class A common stock repurchase program was approximately $100 million. On May 11, 2016, the Company's Board of Directors approved an expansion of the program that allows it to repurchase up to an additional $200 million of Class A common stock. Repurchases of shares of Class A common stock are subject to overall business and market conditions. |
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(b) | Represents 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. |
Item 6. | Selected Financial Data |
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Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
• | Overview. This section provides a general description of our business, current trends and outlook, and a summary of our financial performance for Fiscal 2016. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our results of operations and financial condition, and in anticipating future trends. |
• | Results of operations. This section provides an analysis of our results of operations for Fiscal 2016 as compared to Fiscal 2015 and Fiscal 2015 as compared to Fiscal 2014. |
• | Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of April 2, 2016, which includes (i) an analysis of our financial condition compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for Fiscal 2016 and Fiscal 2015 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, common stock repurchases, payments of dividends, and our outstanding debt and covenant compliance; and (iv) a summary of our contractual and other obligations as of April 2, 2016. |
• | Market risk management. This section discusses how we manage our risk exposures related to foreign currency exchange rates, interest rates, and our investments as of April 2, 2016. |
• | Critical accounting policies. This section discusses accounting policies considered to be important to our results of operations and financial condition, which typically require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 to the accompanying audited consolidated financial statements. |
• | Recently issued accounting standards. This section discusses the potential impact on our reported results of operations and financial condition of certain accounting standards that have been recently issued or proposed. |
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• | pretax asset impairment and restructuring and other charges recorded during the periods presented. A summary of the effect of these items on pretax income for each fiscal year is summarized below (references to "Notes" are to the notes to the accompanying audited consolidated financial statements): |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Impairments of assets (see Note 10) | $ | (49 | ) | $ | (7 | ) | $ | (1 | ) | |||
Restructuring and other charges (see Note 11) | (143 | ) | (10 | ) | (18 | ) |
• | the inclusion of the 53rd week in Fiscal 2016, which resulted in incremental net revenues of $72 million and net income of $8 million, or approximately $0.10 per diluted share. |
• | our acquisitions of previously licensed businesses, including the transition of the Ralph Lauren-branded apparel and accessories business in Australia and New Zealand (the "Australia and New Zealand Business") from a licensed to a wholly-owned operation (the "Australia and New Zealand Licensed Operations Acquisition") in July 2013; and the transition of the North American Chaps-branded men's sportswear business (the "Chaps Menswear Business") from a licensed to a wholly-owned operation (the "Chaps Menswear License Acquisition") in April 2013, which resulted in a $16 million gain recorded during the first quarter of Fiscal 2014. |
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Fiscal Years Ended | |||||||||||||||
April 2, 2016 | March 28, 2015 | $ Change | % / bps Change | ||||||||||||
(millions, except per share data) | |||||||||||||||
Net revenues | $ | 7,405 | $ | 7,620 | $ | (215 | ) | (2.8 | %) | ||||||
Cost of goods sold(a) | (3,218 | ) | (3,242 | ) | 24 | (0.7 | %) | ||||||||
Gross profit | 4,187 | 4,378 | (191 | ) | (4.4 | %) | |||||||||
Gross profit as % of net revenues | 56.5 | % | 57.5 | % | (100 bps) | ||||||||||
Selling, general, and administrative expenses(a) | (3,389 | ) | (3,301 | ) | (88 | ) | 2.7 | % | |||||||
SG&A expenses as % of net revenues | 45.8 | % | 43.3 | % | 250 bps | ||||||||||
Amortization of intangible assets | (24 | ) | (25 | ) | 1 | (6.2 | %) | ||||||||
Impairment of assets | (49 | ) | (7 | ) | (42 | ) | NM | ||||||||
Restructuring and other charges | (143 | ) | (10 | ) | (133 | ) | NM | ||||||||
Operating income | 582 | 1,035 | (453 | ) | (43.8 | %) | |||||||||
Operating income as % of net revenues | 7.9 | % | 13.6 | % | (570 bps) | ||||||||||
Foreign currency losses | (4 | ) | (26 | ) | 22 | (85.2 | %) | ||||||||
Interest expense | (21 | ) | (17 | ) | (4 | ) | 25.7 | % | |||||||
Interest and other income, net | 6 | 6 | — | (7.9 | %) | ||||||||||
Equity in losses of equity-method investees | (11 | ) | (11 | ) | — | (5.3 | %) | ||||||||
Income before provision for income taxes | 552 | 987 | (435 | ) | (44.1 | %) | |||||||||
Provision for income taxes | (156 | ) | (285 | ) | 129 | (45.5 | %) | ||||||||
Effective tax rate(b) | 28.2 | % | 28.9 | % | (70 bps) | ||||||||||
Net income | $ | 396 | $ | 702 | $ | (306 | ) | (43.6 | %) | ||||||
Net income per common share: | |||||||||||||||
Basic | $ | 4.65 | $ | 7.96 | $ | (3.31 | ) | (41.6 | %) | ||||||
Diluted | $ | 4.62 | $ | 7.88 | $ | (3.26 | ) | (41.4 | %) |
(a) | Includes total depreciation expense of $286 million and $269 million for Fiscal 2016 and Fiscal 2015, respectively. |
(b) | Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes. |
39 |
Fiscal Years Ended | $ Change | Foreign Exchange Impact | $ Change | % Change | ||||||||||||||||||||||
April 2, 2016 | March 28, 2015 | As Reported | Constant Currency | As Reported | Constant Currency | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||
Net Revenues: | ||||||||||||||||||||||||||
Wholesale | $ | 3,297 | $ | 3,495 | $ | (198 | ) | $ | (105 | ) | $ | (93 | ) | (5.7 | %) | (2.7 | %) | |||||||||
Retail | 3,933 | 3,956 | (23 | ) | (168 | ) | 145 | (0.6 | %) | 3.7 | % | |||||||||||||||
Licensing | 175 | 169 | 6 | (2 | ) | 8 | 3.7 | % | 5.0 | % | ||||||||||||||||
Total net revenues | $ | 7,405 | $ | 7,620 | $ | (215 | ) | $ | (275 | ) | $ | 60 | (2.8 | %) | 0.8 | % |
• | a $156 million, or 5.8%, net decrease related to our business in the Americas, reflecting lower sales across all of our major apparel and accessories businesses, due in part to a decline in foreign tourist traffic in major metropolitan locations, which contributed to a more competitive retail environment. The net decrease related to our business in the Americas also reflected net unfavorable foreign currency effects of $14 million due to the weakening of the Canadian Dollar against the U.S. Dollar; and |
• | a $33 million, or 4.6%, net decrease related to our European business, reflecting net unfavorable foreign currency effects of $86 million, partially offset by increased sales across all of our major apparel and accessories businesses. On a constant currency basis, net revenues related to our European business increased by $53 million, or 7.3%. |
• | a $220 million, or 7%, net decline in consolidated comparable store sales, including net unfavorable foreign currency effects of $123 million. Our total comparable store sales decreased by $97 million, or 3%, on a constant currency basis, primarily driven by lower sales from certain retail stores, partially offset by an increase from our Ralph Lauren e-commerce operations. Comparable store sales related to our e-commerce operations increased by approximately 2% on a reported basis and 3% on a constant currency basis over the related prior period, and had a favorable impact on our total comparable store sales of approximately 1% to 2% on both a reported and constant currency basis. Our consolidated comparable store sales excluding e-commerce declined by approximately 8% to 9% on a reported basis and 4% to 5% on a constant currency basis. All comparable store sales metrics were calculated on a 52-week basis. |
40 |
• | a $197 million, or 28%, net increase in non-comparable store sales, inclusive of the favorable impact of the 53rd week in Fiscal 2016, which resulted in incremental net revenues of $62 million on a reported basis. The increase also included net unfavorable foreign currency effects of $45 million. On a constant currency basis, non-comparable store sales increased by $242 million, or 34%, primarily driven by new global store openings and the expansion of our e-commerce operations within the past twelve months, which more than offset the impact of store closings. |
April 2, 2016 | March 28, 2015 | |||||
Stores: | ||||||
Freestanding stores | 493 | 466 | ||||
Concession shops | 583 | 536 | ||||
Total stores | 1,076 | 1,002 |
• | Our North American e-commerce sites located at www.RalphLauren.com and www.ClubMonaco.com, as well as our Club Monaco site in Canada located at www.ClubMonaco.ca; |
• | Our Ralph Lauren e-commerce sites in Europe, including www.RalphLauren.co.uk, www.RalphLauren.fr, and www.RalphLauren.de; and |
• | Our Ralph Lauren e-commerce sites in Asia, including www.RalphLauren.co.jp, www.RalphLauren.co.kr, www.RalphLauren.asia, and www.RalphLauren.com.au. |
41 |
Fiscal 2016 Compared to Fiscal 2015 | ||||
(millions) | ||||
SG&A expense category: | ||||
Consulting fees | $ | 26 | ||
Depreciation expense | 18 | |||
Rent and occupancy expenses | 16 | |||
Compensation-related expenses | 7 | |||
Marketing and advertising expenses | 5 | |||
Other | 16 | |||
Total change in SG&A expenses | $ | 88 |
42 |
Fiscal Years Ended | ||||||||||||||||||
April 2, 2016 | March 28, 2015 | |||||||||||||||||
Operating Income | Operating Margin | Operating Income | Operating Margin | $ Change | Margin Change | |||||||||||||
(millions) | (millions) | (millions) | ||||||||||||||||
Segment: | ||||||||||||||||||
Wholesale | $ | 822 | 24.9% | $ | 943 | 27.0% | $ | (121 | ) | (210 bps) | ||||||||
Retail | 359 | 9.1% | 527 | 13.3% | (168 | ) | (420 bps) | |||||||||||
Licensing | 155 | 88.7% | 152 | 90.4% | 3 | (170 bps) | ||||||||||||
1,336 | 1,622 | (286 | ) | |||||||||||||||
Unallocated corporate expenses | (611 | ) | (577 | ) | (34 | ) | ||||||||||||
Unallocated restructuring and other charges | (143 | ) | (10 | ) | (133 | ) | ||||||||||||
Total operating income | $ | 582 | 7.9% | $ | 1,035 | 13.6% | $ | (453 | ) | (570 bps) |
43 |
44 |
Fiscal Years Ended | |||||||||||||||
March 28, 2015 | March 29, 2014 | $ Change | % / bps Change | ||||||||||||
(millions, except per share data) | |||||||||||||||
Net revenues | $ | 7,620 | $ | 7,450 | $ | 170 | 2.3 | % | |||||||
Cost of goods sold(a) | (3,242 | ) | (3,140 | ) | (102 | ) | 3.3 | % | |||||||
Gross profit | 4,378 | 4,310 | 68 | 1.6 | % | ||||||||||
Gross profit as % of net revenues | 57.5 | % | 57.9 | % | (40 bps) | ||||||||||
Selling, general, and administrative expenses(a) | (3,301 | ) | (3,142 | ) | (159 | ) | 5.0 | % | |||||||
SG&A expenses as % of net revenues | 43.3 | % | 42.2 | % | 110 bps | ||||||||||
Amortization of intangible assets | (25 | ) | (35 | ) | 10 | (27.9 | %) | ||||||||
Gain on acquisition of Chaps | — | 16 | (16 | ) | NM | ||||||||||
Impairment of assets | (7 | ) | (1 | ) | (6 | ) | NM | ||||||||
Restructuring and other charges | (10 | ) | (18 | ) | 8 | (43.5 | %) | ||||||||
Operating income | 1,035 | 1,130 | (95 | ) | (8.4 | %) | |||||||||
Operating income as % of net revenues | 13.6 | % | 15.2 | % | (160 bps) | ||||||||||
Foreign currency losses | (26 | ) | (8 | ) | (18 | ) | NM | ||||||||
Interest expense | (17 | ) | (20 | ) | 3 | (17.3 | %) | ||||||||
Interest and other income, net | 6 | 3 | 3 | 73.3 | % | ||||||||||
Equity in losses of equity-method investees | (11 | ) | (9 | ) | (2 | ) | 22.8 | % | |||||||
Income before provision for income taxes | 987 | 1,096 | (109 | ) | (9.9 | %) | |||||||||
Provision for income taxes | (285 | ) | (320 | ) | 35 | (11.0 | %) | ||||||||
Effective tax rate(b) | 28.9 | % | 29.2 | % | (30 bps) | ||||||||||
Net income | $ | 702 | $ | 776 | $ | (74 | ) | (9.5 | %) | ||||||
Net income per common share: | |||||||||||||||
Basic | $ | 7.96 | $ | 8.55 | $ | (0.59 | ) | (6.9 | %) | ||||||
Diluted | $ | 7.88 | $ | 8.43 | $ | (0.55 | ) | (6.5 | %) |
(a) | Includes total depreciation expense of $269 million and $223 million for Fiscal 2015 and Fiscal 2014, respectively. |
(b) | Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes. |
NM | Not meaningful. |
45 |
Fiscal Years Ended | $ Change | Foreign Exchange Impact | $ Change | % Change | ||||||||||||||||||||||
March 28, 2015 | March 29, 2014 | As Reported | Constant Currency | As Reported | Constant Currency | |||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||
Net Revenues: | ||||||||||||||||||||||||||
Wholesale | $ | 3,495 | $ | 3,486 | $ | 9 | $ | (63 | ) | $ | 72 | 0.3 | % | 2.1 | % | |||||||||||
Retail | 3,956 | 3,798 | 158 | (65 | ) | 223 | 4.2 | % | 5.9 | % | ||||||||||||||||
Licensing | 169 | 166 | 3 | (3 | ) | 6 | 1.8 | % | 3.3 | % | ||||||||||||||||
Total net revenues | $ | 7,620 | $ | 7,450 | $ | 170 | $ | (131 | ) | $ | 301 | 2.3 | % | 4.0 | % |
• | a $28 million net increase related to our business in the Americas, reflecting increased revenues from our womenswear and accessories businesses, partially offset by decreased revenues from our menswear business, due in part to higher prior period sales associated with the initial transition of the Chaps Menswear Business to a wholly-owned operation. The net increase related to our business in the Americas also reflected net unfavorable foreign currency effects of $9 million due to the weakening of the Canadian Dollar against the U.S. Dollar. |
• | a $9 million net decrease related to our Asia businesses, primarily reflecting net unfavorable foreign currency effects of $4 million largely related to the weakening of the Japanese Yen against the U.S. Dollar, as well as the continued impact of our business model shift to the retail concession-based channel, partially offset by increased sales to our licensees; and |
• | a $10 million net decrease related to our European business, primarily reflecting net unfavorable foreign currency effects of $50 million, partially offset by increased sales across all of our major apparel and accessories businesses. |
• | a $178 million, or a 23%, net increase in non-comparable store sales, including net unfavorable foreign currency effects of $17 million. On a constant currency basis, non-comparable store sales increased by $195 million, or 25%, primarily driven by new global store openings in Asia and Europe within the past twelve months, the expansion of our e-commerce operations, and new stores and concession shops assumed in connection with the Australia and New Zealand Licensed Operations Acquisition, which more than offset the impact of store closings. |
• | a $20 million, or 1%, net decline in consolidated comparable store sales, including net unfavorable foreign currency effects of $48 million. Our total comparable store sales increased approximately $28 million, or 1%, on a constant currency basis, primarily driven by an increase from our Ralph Lauren e-commerce operations, partially offset by lower sales from certain retail stores and concession shops. Comparable store sales related to our e-commerce operations increased by approximately 16% on a reported basis and 17% on a constant currency basis over the related prior fiscal year period, and had a favorable impact on our total comparable store sales of approximately 3% to 4% on a reported basis and 2% to 3% on a constant currency basis. Our consolidated comparable store sales excluding e-commerce declined between 3% and 4% on a reported basis and declined between 2% and 3% on a constant currency basis. |
46 |
March 28, 2015 | March 29, 2014 | |||||
Stores: | ||||||
Freestanding stores | 466 | 433 | ||||
Concession shops | 536 | 503 | ||||
Total stores | 1,002 | 936 | ||||
E-commerce Sites: | ||||||
North American sites(a) | 3 | 3 | ||||
European sites(b) | 3 | 3 | ||||
Asian sites(c) | 4 | 2 | ||||
Total e-commerce sites | 10 | 8 |
(a) | Includes www.RalphLauren.com, www.ClubMonaco.com, and www.ClubMonaco.ca. |
(b) | Includes www.RalphLauren.co.uk, www.RalphLauren.fr, and www.RalphLauren.de. |
(c) | Includes www.RalphLauren.co.jp and www.RalphLauren.co.kr, and, as of March 28, 2015, www.RalphLauren.asia and www.RalphLauren.com.au. |
47 |
Fiscal 2015 Compared to Fiscal 2014 | ||||
(millions) | ||||
SG&A expense category: | ||||
Compensation-related expenses(a) | $ | 62 | ||
Depreciation expense | 46 | |||
Rent and occupancy expenses | 26 | |||
Marketing and advertising expenses | 19 | |||
Incremental operating expenses related to the Australia and New Zealand Business | 10 | |||
Shipping and handling costs | 7 | |||
Acquisition-related costs(b) | (7 | ) | ||
Other | (4 | ) | ||
Total change in SG&A expenses | $ | 159 |
(a) | Primarily due to increased salaries and related expenses to support our retail business growth. |
(b) | Comprised of acquisition-related costs for the Chaps Menswear License Acquisition in April 2013 and for the Australia and New Zealand Licensed Operations Acquisition in July 2013 (see Note 5 to the accompanying audited consolidated financial statements). |
48 |
Fiscal Years Ended | ||||||||||||||||||
March 28, 2015 | March 29, 2014 | |||||||||||||||||
Operating Income | Operating Margin | Operating Income | Operating Margin | $ Change | Margin Change | |||||||||||||
(millions) | (millions) | (millions) | ||||||||||||||||
Segment: | ||||||||||||||||||
Wholesale | $ | 943 | 27.0% | $ | 963 | 27.6% | $ | (20 | ) | (60 bps) | ||||||||
Retail | 527 | 13.3% | 572 | 15.1% | (45 | ) | (180 bps) | |||||||||||
Licensing | 152 | 90.4% | 150 | 90.2% | 2 | 20 bps | ||||||||||||
1,622 | 1,685 | (63 | ) | |||||||||||||||
Unallocated corporate expenses | (577 | ) | (553 | ) | (24 | ) | ||||||||||||
Gain on acquisition of Chaps | — | 16 | (16 | ) | ||||||||||||||
Unallocated restructuring and other charges | (10 | ) | (18 | ) | 8 | |||||||||||||
Total operating income | $ | 1,035 | 13.6% | $ | 1,130 | 15.2% | $ | (95 | ) | (160 bps) |
49 |
April 2, 2016 | March 28, 2015 | $ Change | ||||||||||
(millions) | ||||||||||||
Cash and cash equivalents | $ | 456 | $ | 500 | $ | (44 | ) | |||||
Short-term investments | 629 | 644 | (15 | ) | ||||||||
Non-current investments(a) | 187 | 8 | 179 | |||||||||
Short-term debt | (116 | ) | (234 | ) | 118 | |||||||
Long-term debt(b) | (597 | ) | (298 | ) | (299 | ) | ||||||
Net cash and investments(c) | $ | 559 | $ | 620 | $ | (61 | ) | |||||
Equity | $ | 3,744 | $ | 3,891 | $ | (147 | ) |
(a) | Recorded within other non-current assets in our consolidated balance sheets. |
(b) | See Note 13 to the accompanying audited consolidated financial statements for discussion of the carrying values of our long-term debt as of April 2, 2016 and March 28, 2015. |
(c) | "Net cash and investments" is defined as cash and cash equivalents, plus short-term and non-current investments, less total debt. |
50 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | $ Change | ||||||||||
(millions) | ||||||||||||
Net cash provided by operating activities | $ | 1,007 | $ | 894 | $ | 113 | ||||||
Net cash used in investing activities | (583 | ) | (689 | ) | 106 | |||||||
Net cash used in financing activities | (473 | ) | (421 | ) | (52 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 5 | (81 | ) | 86 | ||||||||
Net decrease in cash and cash equivalents | $ | (44 | ) | $ | (297 | ) | $ | 253 |
• | a favorable change in our accounts receivable balance, largely driven by lower net revenues at the end of Fiscal 2016 and the timing of cash collections; and |
• | favorable changes in our (i) prepaid expenses and other current assets and (ii) accounts payable and accrued liabilities balances, both largely driven by the timing of payments. |
• | a $54 million decrease in proceeds from debt issuances, less cash used to repay debt. During Fiscal 2016, we received net proceeds of $299 million from our issuance of 2.625% unsecured senior notes in August 2015 and $26 million in borrowings under our credit facilities, which were partially offset by net repayments of $145 million related to our commercial paper note issuances and repayments. During Fiscal 2015, we received net proceeds of $234 million related to our commercial paper note issuances and repayments; and |
• | a $12 million increase in cash used to pay dividends, primarily due to an increase in the quarterly cash dividend on our common stock from $0.45 per share to $0.50 per share effective beginning in the fourth quarter of Fiscal 2015. During Fiscal 2016, we used $170 million to pay dividends, as compared to $158 million during Fiscal 2015. |
51 |
• | a $32 million decrease in cash used to repurchase shares of our Class A common stock. During Fiscal 2016, we used $480 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $20 million in shares of 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. On a comparative basis, during Fiscal 2015, we used $500 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $32 million in shares of Class A common stock were surrendered or withheld for taxes. |
Fiscal Years Ended | ||||||||||||
March 28, 2015 | March 29, 2014 | $ Change | ||||||||||
(millions) | ||||||||||||
Net cash provided by operating activities | $ | 894 | $ | 907 | $ | (13 | ) | |||||
Net cash used in investing activities | (689 | ) | (488 | ) | (201 | ) | ||||||
Net cash used in financing activities | (421 | ) | (599 | ) | 178 | |||||||
Effect of exchange rate changes on cash and cash equivalents | (81 | ) | 3 | (84 | ) | |||||||
Net decrease in cash and cash equivalents | $ | (297 | ) | $ | (177 | ) | $ | (120 | ) |
• | unfavorable changes in income tax receivables and payables, as well as prepaid expenses and other current assets, both due to the timing of payments; and |
• | a year-over-year increase in our inventory levels to support our new brands and new and expanded stores. |
• | a $203 million increase in proceeds from debt issuances, less cash used to repay debt. During Fiscal 2015, we received net proceeds of $234 million from commercial paper note issuances and repayments. During Fiscal 2014, we received $300 million in proceeds from our issuance of 2.125% unsecured senior notes in September 2013, a portion of which was used to repay the $269 million principal amount outstanding of the 4.5% Euro-denominated notes upon their maturity on October 4, 2013; and |
52 |
• | a $26 million decline in cash used to repurchase shares of our Class A common stock. During Fiscal 2015, we used $500 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $32 million in shares of 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. On a comparative basis, during Fiscal 2014, we used $498 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $60 million in shares of Class A common stock were surrendered or withheld for taxes. |
• | a $26 million decline in excess tax benefits from stock-based compensation arrangements; |
• | a $15 million increase in payments related to our capital lease obligations; and |
• | a $9 million increase in cash used to pay dividends. |
April 2, 2016 | ||||||||||||
Description(a) | Total Availability | Borrowings Outstanding | Remaining Availability | |||||||||
(millions) | ||||||||||||
Commercial Paper Program(b) | $ | 500 | $ | 90 | (c) | $ | 410 | |||||
Global Credit Facility | 500 | 9 | (d) | 491 | ||||||||
Pan-Asia Credit Facilities | 57 | 26 | (c) | 31 |
(a) | As defined in Note 13 to the accompanying audited consolidated financial statements. |
(b) | Borrowings under the Commercial Paper Program are supported by the Global Credit Facility. |
(c) | Classified as short-term debt within the consolidated balance sheet. |
(d) | As of April 2, 2016, we were contingently liable for $9 million of outstanding letters of credit under the Global Credit Facility. |
53 |
54 |
Fiscal 2017 | Fiscal 2018-2019 | Fiscal 2020-2021 | Fiscal 2022 and Thereafter | Total | ||||||||||||||||
(millions) | ||||||||||||||||||||
Senior Notes | $ | — | $ | 300 | $ | 300 | $ | — | $ | 600 | ||||||||||
Interest payments on Senior Notes | 14 | 25 | 12 | — | 51 | |||||||||||||||
Capital leases | 30 | 54 | 55 | 106 | 245 | |||||||||||||||
Operating leases | 346 | 634 | 494 | 733 | 2,207 | |||||||||||||||
Inventory purchase commitments | 525 | 416 | — | — | 941 | |||||||||||||||
Other commitments | 58 | 43 | 38 | 10 | 149 | |||||||||||||||
Total | $ | 973 | $ | 1,472 | $ | 899 | $ | 849 | $ | 4,193 |
• | Senior Notes represents the principal amount of our outstanding 2.125% Senior Notes and 2.625% Senior Notes. Amounts do not include any fair value adjustments, call premiums, unamortized debt issuance costs, or interest payments (see below); |
• | Interest payments on Senior Notes represent the semi-annual contractual interest payments due on our 2.125% Senior Notes and 2.625% Senior Notes; |
• | Lease obligations represent the minimum lease rental payments due under noncancelable leases for our real estate and operating equipment. In addition to such amounts, we are normally required to pay taxes, insurance, and certain occupancy costs relating to our leased real estate properties, which are not included in the table above. Approximately 70% of these lease obligations relate to our retail operations. Information has been presented separately for capital and operating leases; |
• | Inventory purchase commitments represent our legally-binding agreements to purchase fixed or minimum quantities of goods at determinable prices; and |
• | Other commitments primarily represent our legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements; distribution-related agreements; information technology-related service agreements; and pension-related obligations. |
55 |
• | Forecasted Inventory Transactions — recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party. |
56 |
• | Intercompany Royalties — recognized within foreign currency gains (losses) generally in the period in which the related payments being hedged occur. |
57 |
58 |
59 |
60 |
61 |
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk. |
Item 8. | Financial Statements and Supplementary Data. |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
62 |
Item 9B. | Other Information. |
Item 10. | Directors, Executive Officers and Corporate Governance. |
Item 11. | Executive Compensation. |
63 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
(a) | (b) | (c) | |||||||||
Plan Category | Numbers of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options ($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | ||||||||
Equity compensation plans approved by security holders | 4,170,629 | (1) | $ | 146.58 | (2) | 2,522,816 | (3) | ||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||
Total | 4,170,629 | $ | 146.58 | 2,522,816 |
(1) | Consists of 2,417,979 options to purchase shares of our Class A common stock and 1,752,650 restricted stock units that are payable solely in shares of Class A common stock (including 429,688 service-based restricted stock units that have fully vested but for which the underlying shares have not yet been delivered as of April 2, 2016). Does not include 14,456 outstanding restricted shares that are subject to forfeiture. |
(2) | Represents the weighted average exercise price of outstanding stock options. |
(3) | All of the securities remaining available for future issuance set forth in column (c) may be in the form of options, stock appreciation rights, restricted stock, restricted stock units, performance awards, or other stock-based awards under the Company's 1997 Incentive Plan and 2010 Incentive Plan (the "Plans"). An additional 14,456 outstanding shares of restricted stock granted under the Company's Plans that remain subject to forfeiture are not reflected in column (c). |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accounting Fees and Services. |
64 |
Item 15. | Exhibits, Financial Statement Schedules. |
Exhibit Number | Description | |
3.1 | Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Registration Statement on Form S-1 (File No. 333-24733) (the "S-1")) | |
3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Form 8-K filed August 16, 2011) | |
3.3 | Third Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Form 8-K dated February 4, 2014) | |
4.1 | Indenture, dated as of September 26, 2013, by and between the Company and Wells Fargo Bank, National Association (including the form of Note) (filed as Exhibit 4.1 to the Form 8-K dated September 23, 2013) | |
4.2 | First Supplemental Indenture, dated as of September 26, 2013, by and between the Company and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K dated September 23, 2013) | |
4.3 | Second Supplemental Indenture, dated as of August 18, 2015, by and between Ralph Lauren Corporation and Wells Fargo Bank, National Association (filed as Exhibit 4.2 to the Form 8-K dated August 13, 2015) | |
10.1 | Registration Rights Agreement dated as of June 9, 1997 by and among Ralph Lauren, GS Capital Partners, L.P., GS Capital Partner PRL Holding I, L.P., GS Capital Partners PRL Holding II, L.P., Stone Street Fund 1994, L.P., Stone Street 1994 Subsidiary Corp., Bridge Street Fund 1994, L.P., and the Company (filed as Exhibit 10.3 to the S-1) | |
10.2 | Form of Indemnification Agreement between the Company and its Directors and Executive Officers (filed as Exhibit 10.26 to the S-1) | |
10.3 | Amended and Restated Employment Agreement, made effective as of June 26, 2012, between the Company and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K filed July 2, 2012)† | |
10.4 | Amendment No. 1 to the Amended and Restated Employment Agreement, dated as of April 1, 2015, between Ralph Lauren Corporation and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K dated April 6, 2015)† | |
10.5 | Amendment No. 2 to the Amended and Restated Employment Agreement, dated as of September 25, 2015, between Ralph Lauren Corporation and Ralph Lauren (filed as Exhibit 10.1 to the Form 8-K dated September 25, 2015)† | |
10.6 | Employment Agreement, dated as of September 25, 2015, between Ralph Lauren Corporation and Stefan Larsson (filed as Exhibit 10.2 to the Form 8-K dated September 25, 2015)† | |
10.7 | Employment Agreement, effective as of April 7, 2014, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.13 to the Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2015 (the "Fiscal 2015 10-K"))† | |
10.8 | Amendment No. 1 to the Employment Agreement, effective as of June 24, 2014, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.14 to the Fiscal 2015 10-K)† | |
10.9 | Amendment No. 2 to the Employment Agreement, effective as of March 29, 2015, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.15 to the Fiscal 2015 10-K)† | |
10.10 | Amended and Restated Employment Agreement, effective as of April 4, 2016, between Ralph Lauren Corporation and Valérie Hermann (filed as Exhibit 10.1 to the Form 8-K dated May 4, 2016)† | |
10.11 | Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Robert L. Madore (filed as Exhibit 10.4 to the Form 8-K dated April 6, 2015)† | |
10.12 | Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Jackwyn Nemerov (filed as Exhibit 10.2 to the Form 8-K dated September 18, 2013)† | |
10.13 | Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of March 30, 2014, between the Company and Jackwyn Nemerov (filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2014 (the "Fiscal 2014 10-K"))† | |
10.14 | Amendment No. 2 to the Amended and Restated Employment Agreement, effective as of March 29, 2015, between Ralph Lauren Corporation and Jackwyn Nemerov (filed as Exhibit 10.9 to the Fiscal 2015 10-K)† | |
10.15 | Employment Separation Agreement and Release, between Ralph Lauren Corporation and Jackwyn Nemerov (filed as Exhibit 10.1 to the Form 8-K dated October 21, 2015)† |
65 |
Exhibit Number | Description | |
10.16 | Amended and Restated Employment Agreement, effective as of November 1, 2013, between the Company and Christopher H. Peterson (filed as Exhibit 10.3 to the Form 8-K dated September 18, 2013)† | |
10.17 | Amendment No. 1 to the Amended and Restated Employment Agreement, effective as of March 30, 2014, between the Company and Christopher Peterson (filed as Exhibit 10.8 to the Fiscal 2014 10-K)† | |
10.18 | Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Christopher H. Peterson (filed as Exhibit 10.2 to the Form 8-K dated April 6, 2015)† | |
10.19 | Employment Separation Agreement and Release, between Ralph Lauren Corporation and Christopher Peterson (filed as Exhibit 10.1 to the Form 8-K dated February 25, 2016)† | |
10.20 | Amended and Restated Employment Agreement, effective as of March 1, 2014, between the Company and Mitchell A. Kosh (filed as Exhibit 10.1 to the Form 8-K dated February 11, 2014)† | |
10.21 | Amended and Restated Employment Agreement, effective as of April 1, 2015, between Ralph Lauren Corporation and Mitchell A. Kosh (filed as Exhibit 10.3 to the Form 8-K dated April 6, 2015)† | |
10.22 | Employment Separation Agreement and Release, between Ralph Lauren Corporation and Mitchell A. Kosh (filed as Exhibit 10.1 to the Form 8-K dated October 1, 2015)† | |
10.23 | Non-Qualified Stock Option Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 2005 (the "Fiscal 2005 10-K"))† | |
10.24 | Restricted Stock Unit Award Agreement, dated as of June 8, 2004, between the Company and Ralph Lauren (filed as Exhibit 10.15 to the Fiscal 2005 10-K)† | |
10.25 | Executive Officer Annual Incentive Plan, as amended as of August 9, 2012 (filed as Appendix B to the Company's Definitive Proxy Statement dated July 2, 2012)† | |
10.26 | 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 99.1 to the Form 8-K dated August 12, 2004)† | |
10.27 | Amendment, as of June 30, 2006, to the 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 10.4 to the Form 10-Q for the quarterly period ended July 1, 2006)† | |
10.28 | Amendment No. 2, dated as of May 21, 2009, to the 1997 Long-Term Stock Incentive Plan, as Amended and Restated as of August 12, 2004 (filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K for the fiscal year ended March 28, 2009)† | |
10.29 | Amended and Restated 2010 Long-Term Incentive Plan, amended as of August 8, 2013 (filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended June 29, 2013)† | |
10.30 | Cliff Restricted Performance Share Unit Award Overview containing the standard terms of cliff restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.25 to the Fiscal 2014 10-K)† | |
10.31 | Pro-Rata Restricted Performance Share Unit Award Overview containing the standard terms of restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.26 to the Fiscal 2014 10-K)† | |
10.32 | Stock Option Award Overview containing the standard terms of stock option awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.27 to the Fiscal 2014 10-K)† | |
10.33 | Cliff Restricted Performance Share Unit with TSR Modifier Award Overview containing the standard terms of cliff restricted performance share unit awards under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.28 to the Fiscal 2014 10-K)† | |
10.34 | Form of Performance Share Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.38 to the Fiscal 2015 10-K)† | |
10.35 | Form of Performance-Based Restricted Stock Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.39 to the Fiscal 2015 10-K)† | |
10.36 | Form of Restricted Stock Unit Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan (filed as Exhibit 10.1 to the Form 10-Q dated August 6, 2015)† | |
10.37* | Form of Non-Employee Director Restricted Stock Award Agreement under the Amended and Restated 2010 Long-Term Stock Incentive Plan† | |
10.38 | Amended and Restated Credit Agreement, dated as of February 11, 2015, among Ralph Lauren Corporation, Acqui Polo C.V., Polo Fin B.V. and Ralph Lauren Asia Pacific Limited, as the borrowers, the lenders party thereto, Bank of America, N.A., as syndication agent, Wells Fargo Bank, N.A., HSBC Bank USA, N.A. and Deutsche Bank Securities Inc., as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent (the "2015 Credit Agreement") (filed as Exhibit 10.1 to the Form 8-K dated February 18, 2015) |
66 |
Exhibit Number | Description | |
10.39* | First Amendment to the 2015 Credit Agreement, dated as of March 22, 2016, among Ralph Lauren Corporation, Acqui Polo C.V., RL Finance B.V. (formerly known as Polo Fin B.V.) and Ralph Lauren Asia Pacific Limited, as the borrowers, the lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents parties thereto | |
10.40 | Amended and Restated Polo Ralph Lauren Supplemental Executive Retirement Plan (filed as Exhibit 10.1 to the Company's Form 10-Q for the quarterly period ended December 31, 2005)† | |
12.1* | Computation of Ratio of Earnings to Fixed Charges | |
14.1 | Code of Ethics for Principal Executive Officers and Senior Financial Officers (filed as Exhibit 14.1 to the Company's Annual Report on Form 10-K for the fiscal year ended March 29, 2003) | |
14.2 | Code of Business Conduct and Ethics of the Company, as amended and restated on August 6, 2015 (filed as Exhibit 14.1 to the Form 10-Q dated August 6, 2015) | |
21.1* | List of Significant Subsidiaries of the Company | |
23.1* | Consent of Ernst & Young LLP | |
31.1* | Certification of Stefan Larsson required by 17 CFR 240.13a-14(a) | |
31.2* | Certification of Robert L. Madore required by 17 CFR 240.13a-14(a) | |
32.1* | Certification of Stefan Larsson Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2* | Certification of Robert L. Madore Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101* | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at April 2, 2016 and March 28, 2015, (ii) the Consolidated Statements of Income for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, (iv) the Consolidated Statements of Cash Flows for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, (v) the Consolidated Statements of Equity for the fiscal years ended April 2, 2016, March 28, 2015, and March 29, 2014, and (vi) the Notes to the Consolidated Financial Statements. |
* | Filed herewith. |
† | Management contract or compensatory plan or arrangement. |
67 |
RALPH LAUREN CORPORATION | ||
By: | /S/ ROBERT L. MADORE | |
Robert L. Madore | ||
Corporate Senior Vice President and Chief Financial Officer | ||
(Principal Financial and Accounting Officer) | ||
Date: May 19, 2016 |
Signature | Title | Date | ||
/S/ RALPH LAUREN | Executive Chairman, Chief Creative Officer, and Director | May 19, 2016 | ||
Ralph Lauren | ||||
/S/ STEFAN LARSSON | President, Chief Executive Officer, and Director (Principal Executive Officer) | May 19, 2016 | ||
Stefan Larsson | ||||
/S/ ROBERT L. MADORE | Corporate Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | May 19, 2016 | ||
Robert L. Madore | ||||
/s/ DAVID LAUREN | Executive Vice President of Global Advertising, Marketing, and Communications, and Director | May 19, 2016 | ||
David Lauren | ||||
/S/ JOHN R. ALCHIN | Director | May 19, 2016 | ||
John R. Alchin | ||||
/S/ ARNOLD H. ARONSON | Director | May 19, 2016 | ||
Arnold H. Aronson | ||||
/S/ FRANK A. BENNACK, JR. | Director | May 19, 2016 | ||
Frank A. Bennack, Jr. | ||||
/S/ DR. JOYCE F. BROWN | Director | May 19, 2016 | ||
Dr. Joyce F. Brown | ||||
/S/ JOEL L. FLEISHMAN | Director | May 19, 2016 | ||
Joel L. Fleishman | ||||
/S/ HUBERT JOLY | Director | May 19, 2016 | ||
Hubert Joly |
68 |
Signature | Title | Date | ||
/S/ JUDITH MCHALE | Director | May 19, 2016 | ||
Judith McHale | ||||
/S/ ROBERT C. WRIGHT | Director | May 19, 2016 | ||
Robert C. Wright |
69 |
Page | ||
Consolidated Financial Statements: | ||
Supplementary Information: | ||
EX-10.37 | ||
EX-10.39 | ||
EX-12.1 | ||
EX-21.1 | ||
EX-23.1 | ||
EX-31.1 | ||
EX-31.2 | ||
EX-32.1 | ||
EX-32.2 | ||
EX-101 | INSTANCE DOCUMENT | |
EX-101 | SCHEMA DOCUMENT | |
EX-101 | CALCULATION LINKBASE DOCUMENT | |
EX-101 | LABELS LINKBASE DOCUMENT | |
EX-101 | PRESENTATION LINKBASE DOCUMENT | |
EX-101 | DEFINITION LINKBASE DOCUMENT |
F-1 |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 456 | $ | 500 | ||||
Short-term investments | 629 | 644 | ||||||
Accounts receivable, net of allowances of $254 million and $251 million | 517 | 655 | ||||||
Inventories | 1,125 | 1,042 | ||||||
Income tax receivable | 58 | 57 | ||||||
Deferred tax assets | — | 145 | ||||||
Prepaid expenses and other current assets | 268 | 281 | ||||||
Total current assets | 3,053 | 3,324 | ||||||
Property and equipment, net | 1,583 | 1,436 | ||||||
Deferred tax assets | 119 | 45 | ||||||
Goodwill | 918 | 903 | ||||||
Intangible assets, net | 244 | 267 | ||||||
Other non-current assets | 296 | 131 | ||||||
Total assets | $ | 6,213 | $ | 6,106 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 116 | $ | 234 | ||||
Accounts payable | 151 | 210 | ||||||
Income tax payable | 33 | 27 | ||||||
Accrued expenses and other current liabilities | 898 | 715 | ||||||
Total current liabilities | 1,198 | 1,186 | ||||||
Long-term debt | 597 | 298 | ||||||
Non-current liability for unrecognized tax benefits | 81 | 116 | ||||||
Other non-current liabilities | 593 | 615 | ||||||
Commitments and contingencies (Note 16) | ||||||||
Total liabilities | 2,469 | 2,215 | ||||||
Equity: | ||||||||
Class A common stock, par value $.01 per share; 101.0 million and 100.0 million shares issued; 57.0 million and 60.4 million shares outstanding | 1 | 1 | ||||||
Class B common stock, par value $.01 per share; 25.9 million shares issued and outstanding | — | — | ||||||
Additional paid-in-capital | 2,258 | 2,117 | ||||||
Retained earnings | 6,015 | 5,787 | ||||||
Treasury stock, Class A, at cost; 44.0 million and 39.6 million shares | (4,349 | ) | (3,849 | ) | ||||
Accumulated other comprehensive loss | (181 | ) | (165 | ) | ||||
Total equity | 3,744 | 3,891 | ||||||
Total liabilities and equity | $ | 6,213 | $ | 6,106 |
F-2 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions, except per share data) | ||||||||||||
Net sales | $ | 7,230 | $ | 7,451 | $ | 7,284 | ||||||
Licensing revenue | 175 | 169 | 166 | |||||||||
Net revenues | 7,405 | 7,620 | 7,450 | |||||||||
Cost of goods sold(a) | (3,218 | ) | (3,242 | ) | (3,140 | ) | ||||||
Gross profit | 4,187 | 4,378 | 4,310 | |||||||||
Selling, general, and administrative expenses(a) | (3,389 | ) | (3,301 | ) | (3,142 | ) | ||||||
Amortization of intangible assets | (24 | ) | (25 | ) | (35 | ) | ||||||
Gain on acquisition of Chaps | — | — | 16 | |||||||||
Impairment of assets | (49 | ) | (7 | ) | (1 | ) | ||||||
Restructuring and other charges | (143 | ) | (10 | ) | (18 | ) | ||||||
Total other operating expenses, net | (3,605 | ) | (3,343 | ) | (3,180 | ) | ||||||
Operating income | 582 | 1,035 | 1,130 | |||||||||
Foreign currency losses | (4 | ) | (26 | ) | (8 | ) | ||||||
Interest expense | (21 | ) | (17 | ) | (20 | ) | ||||||
Interest and other income, net | 6 | 6 | 3 | |||||||||
Equity in losses of equity-method investees | (11 | ) | (11 | ) | (9 | ) | ||||||
Income before provision for income taxes | 552 | 987 | 1,096 | |||||||||
Provision for income taxes | (156 | ) | (285 | ) | (320 | ) | ||||||
Net income | $ | 396 | $ | 702 | $ | 776 | ||||||
Net income per common share: | ||||||||||||
Basic | $ | 4.65 | $ | 7.96 | $ | 8.55 | ||||||
Diluted | $ | 4.62 | $ | 7.88 | $ | 8.43 | ||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 85.2 | 88.2 | 90.7 | |||||||||
Diluted | 85.9 | 89.1 | 92.0 | |||||||||
Dividends declared per share | $ | 2.00 | $ | 1.85 | $ | 1.70 | ||||||
(a) Includes total depreciation expense of: | $ | (286 | ) | $ | (269 | ) | $ | (223 | ) |
F-3 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Net income | $ | 396 | $ | 702 | $ | 776 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Foreign currency translation gains (losses) | 36 | (318 | ) | 52 | ||||||||
Net gains (losses) on cash flow hedges | (55 | ) | 47 | (27 | ) | |||||||
Net losses on available-for-sale investments | — | — | (5 | ) | ||||||||
Net gains (losses) on defined benefit plans | 3 | (8 | ) | — | ||||||||
Other comprehensive income (loss), net of tax | (16 | ) | (279 | ) | 20 | |||||||
Total comprehensive income | $ | 380 | $ | 423 | $ | 796 |
F-4 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 396 | $ | 702 | $ | 776 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization expense | 310 | 294 | 258 | |||||||||
Deferred income tax expense (benefit) | (8 | ) | 11 | 1 | ||||||||
Equity in losses of equity-method investees | 11 | 11 | 9 | |||||||||
Non-cash stock-based compensation expense | 97 | 81 | 93 | |||||||||
Gain on acquisition of Chaps | — | — | (16 | ) | ||||||||
Non-cash impairment of assets | 49 | 7 | 1 | |||||||||
Excess tax benefits from stock-based compensation arrangements | (10 | ) | (8 | ) | (34 | ) | ||||||
Other non-cash charges (benefits), net | 40 | (25 | ) | 6 | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 129 | (96 | ) | (104 | ) | |||||||
Inventories | (91 | ) | (97 | ) | (77 | ) | ||||||
Prepaid expenses and other current assets | 30 | (96 | ) | (56 | ) | |||||||
Accounts payable and accrued liabilities | 90 | 50 | 43 | |||||||||
Income tax receivables and payables | (15 | ) | (22 | ) | 59 | |||||||
Deferred income | (8 | ) | (21 | ) | (18 | ) | ||||||
Other balance sheet changes, net | (13 | ) | 103 | (34 | ) | |||||||
Net cash provided by operating activities | 1,007 | 894 | 907 | |||||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (418 | ) | (391 | ) | (390 | ) | ||||||
Purchases of investments | (1,085 | ) | (1,398 | ) | (1,067 | ) | ||||||
Proceeds from sales and maturities of investments | 942 | 1,113 | 1,011 | |||||||||
Acquisitions and ventures | (16 | ) | (12 | ) | (40 | ) | ||||||
Change in restricted cash deposits | (6 | ) | (1 | ) | (2 | ) | ||||||
Net cash used in investing activities | (583 | ) | (689 | ) | (488 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of short-term debt | 4,344 | 2,808 | — | |||||||||
Repayments of short-term debt | (4,463 | ) | (2,574 | ) | — | |||||||
Proceeds from issuance of long-term debt | 299 | — | 300 | |||||||||
Repayments of current maturities of long-term debt | — | — | (269 | ) | ||||||||
Payments of capital lease obligations | (25 | ) | (24 | ) | (9 | ) | ||||||
Payments of dividends | (170 | ) | (158 | ) | (149 | ) | ||||||
Repurchases of common stock, including shares surrendered for tax withholdings | (500 | ) | (532 | ) | (558 | ) | ||||||
Proceeds from exercise of stock options | 34 | 52 | 52 | |||||||||
Excess tax benefits from stock-based compensation arrangements | 10 | 8 | 34 | |||||||||
Other financing activities | (2 | ) | (1 | ) | — | |||||||
Net cash used in financing activities | (473 | ) | (421 | ) | (599 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 5 | (81 | ) | 3 | ||||||||
Net decrease in cash and cash equivalents | (44 | ) | (297 | ) | (177 | ) | ||||||
Cash and cash equivalents at beginning of period | 500 | 797 | 974 | |||||||||
Cash and cash equivalents at end of period | $ | 456 | $ | 500 | $ | 797 |
F-5 |
RALPH LAUREN CORPORATION | ||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF EQUITY | ||||||||||||||||||||||||||||||
Additional | Treasury Stock | |||||||||||||||||||||||||||||
Common Stock(a) | Paid-in | Retained | at Cost | Total | ||||||||||||||||||||||||||
Shares | Amount | Capital | Earnings | Shares | Amount | AOCI(b) | Equity | |||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||||
Balance at March 30, 2013 | 123.5 | $ | 1 | $ | 1,752 | $ | 4,647 | 32.6 | $ | (2,709 | ) | $ | 94 | $ | 3,785 | |||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | 776 | |||||||||||||||||||||||||||||
Other comprehensive income | 20 | |||||||||||||||||||||||||||||
Total comprehensive income | 796 | |||||||||||||||||||||||||||||
Dividends declared | (153 | ) | (153 | ) | ||||||||||||||||||||||||||
Repurchases of common stock | 50 | (c) | 3.6 | (608 | ) | (558 | ) | |||||||||||||||||||||||
Stock-based compensation | 93 | 93 | ||||||||||||||||||||||||||||
Shares issued and tax benefits recognized | ||||||||||||||||||||||||||||||
pursuant to stock-based compensation plans(d) | 1.4 | — | 86 | 86 | ||||||||||||||||||||||||||
Conversion of stock-based compensation awards(e) | (2 | ) | (13 | ) | (15 | ) | ||||||||||||||||||||||||
Balance at March 29, 2014 | 124.9 | $ | 1 | $ | 1,979 | $ | 5,257 | 36.2 | $ | (3,317 | ) | $ | 114 | $ | 4,034 | |||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | 702 | |||||||||||||||||||||||||||||
Other comprehensive loss | (279 | ) | ||||||||||||||||||||||||||||
Total comprehensive income | 423 | |||||||||||||||||||||||||||||
Dividends declared | (161 | ) | (161 | ) | ||||||||||||||||||||||||||
Repurchases of common stock | 3.4 | (532 | ) | (532 | ) | |||||||||||||||||||||||||
Stock-based compensation | 81 | 81 | ||||||||||||||||||||||||||||
Shares issued and tax benefits recognized | ||||||||||||||||||||||||||||||
pursuant to stock-based compensation plans(d) | 1.0 | — | 60 | 60 | ||||||||||||||||||||||||||
Conversion of stock-based compensation awards(e) | (3 | ) | (11 | ) | (14 | ) | ||||||||||||||||||||||||
Balance at March 28, 2015 | 125.9 | $ | 1 | $ | 2,117 | $ | 5,787 | 39.6 | $ | (3,849 | ) | $ | (165 | ) | $ | 3,891 | ||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||
Net income | 396 | |||||||||||||||||||||||||||||
Other comprehensive loss | (16 | ) | ||||||||||||||||||||||||||||
Total comprehensive income | 380 | |||||||||||||||||||||||||||||
Dividends declared | (168 | ) | (168 | ) | ||||||||||||||||||||||||||
Repurchases of common stock | 4.4 | (500 | ) | (500 | ) | |||||||||||||||||||||||||
Stock-based compensation | 97 | 97 | ||||||||||||||||||||||||||||
Shares issued and tax benefits recognized | ||||||||||||||||||||||||||||||
pursuant to stock-based compensation plans(d) | 1.0 | — | 44 | 44 | ||||||||||||||||||||||||||
Balance at April 2, 2016 | 126.9 | $ | 1 | $ | 2,258 | $ | 6,015 | 44.0 | $ | (4,349 | ) | $ | (181 | ) | $ | 3,744 |
(a) | Includes Class A and Class B common stock. In Fiscal 2015 and Fiscal 2014, 1.0 million and 3.0 million shares, respectively, of Class B common stock were converted into an equal number of shares of Class A common stock pursuant to the terms of the Class B common stock (see Note 17). |
(b) | Accumulated other comprehensive income (loss). |
(c) | Relates to a $50 million payment made in March 2013 under a prepaid share repurchase program, which resulted in the delivery of the related shares at the conclusion of the repurchase term in Fiscal 2014 (see Note 17). |
(d) | Includes excess tax benefits relating to stock-based compensation plans of approximately $10 million, $8 million, and $34 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. |
(e) | Includes the conversion of certain fully-vested and expensed stock-based compensation awards to cash contributions into a deferred compensation account (see Note 17). |
F-6 |
1. | Description of Business |
2. | Basis of Presentation |
F-7 |
3. | Summary of Significant Accounting Policies |
F-8 |
Fiscal Years Ended | |||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | |||||||
Basic shares | 85.2 | 88.2 | 90.7 | ||||||
Dilutive effect of stock options, restricted stock, and RSUs | 0.7 | 0.9 | 1.3 | ||||||
Diluted shares | 85.9 | 89.1 | 92.0 |
F-9 |
F-10 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Beginning reserve balance | $ | 240 | $ | 254 | $ | 230 | ||||||
Amount charged against revenue to increase reserve | 749 | 756 | 758 | |||||||||
Amount credited against customer accounts to decrease reserve | (753 | ) | (749 | ) | (739 | ) | ||||||
Foreign currency translation | 4 | (21 | ) | 5 | ||||||||
Ending reserve balance | $ | 240 | $ | 240 | $ | 254 |
F-11 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Beginning reserve balance | $ | 11 | $ | 16 | $ | 15 | ||||||
Amount recorded to expense to increase reserve(a) | 7 | — | 3 | |||||||||
Amount written-off against customer accounts to decrease reserve | (4 | ) | (2 | ) | (3 | ) | ||||||
Foreign currency translation | — | (3 | ) | 1 | ||||||||
Ending reserve balance | $ | 14 | $ | 11 | $ | 16 |
(a) | Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of income. |
F-12 |
F-13 |
F-14 |
• | Forecasted Inventory Transactions — recognized as part of the cost of the inventory being hedged within cost of goods sold when the related inventory is sold to a third party. |
• | Intercompany Royalties — recognized within foreign currency gains (losses) generally in the period in which the related payments being hedged occur. |
F-15 |
4. | Recently Issued Accounting Standards |
F-16 |
5. | Acquisitions |
Assets acquired and liabilities assumed: | ||||
Inventory | $ | 9 | ||
Fixed assets | 4 | |||
Customer relationship intangible asset | 3 | |||
Other assets | 2 | |||
Other liabilities | (3 | ) | ||
Fair value of net assets acquired | $ | 15 |
F-17 |
Assets acquired: | ||||
Inventory | $ | 30 | ||
Accounts receivable | 19 | |||
Licensed trademark intangible asset | 9 | |||
Total assets acquired | 58 | |||
Liabilities assumed: | ||||
Accounts payable | (22 | ) | ||
Other net liabilities | (2 | ) | ||
Total net liabilities assumed | (24 | ) | ||
Fair value of net assets acquired | 34 | |||
Consideration paid | 18 | |||
Gain on acquisition(a) | $ | 16 |
(a) | Represents the difference between the acquisition date fair value of net assets acquired and the contractually-defined purchase price under the Company's license agreement with Warnaco, which granted the Company the right to early-terminate the license upon PVH's acquisition of Warnaco in February 2013. |
F-18 |
6. | Property and Equipment |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Land and improvements | $ | 17 | $ | 17 | ||||
Buildings and improvements | 460 | 409 | ||||||
Furniture and fixtures | 727 | 686 | ||||||
Machinery and equipment | 359 | 317 | ||||||
Capitalized software | 460 | 402 | ||||||
Leasehold improvements | 1,248 | 1,185 | ||||||
Construction in progress | 216 | 99 | ||||||
3,487 | 3,115 | |||||||
Less: accumulated depreciation | (1,904 | ) | (1,679 | ) | ||||
Property and equipment, net | $ | 1,583 | $ | 1,436 |
7. | Goodwill and Other Intangible Assets |
Wholesale | Retail | Licensing | Total | |||||||||||||
(millions) | ||||||||||||||||
Balance at March 29, 2014 | $ | 617 | $ | 210 | $ | 137 | $ | 964 | ||||||||
Foreign currency translation | (46 | ) | (10 | ) | (5 | ) | (61 | ) | ||||||||
Balance at March 28, 2015 | 571 | 200 | 132 | 903 | ||||||||||||
Foreign currency translation | 11 | 3 | 1 | 15 | ||||||||||||
Balance at April 2, 2016 | $ | 582 | $ | 203 | $ | 133 | $ | 918 |
F-19 |
April 2, 2016 | March 28, 2015 | |||||||||||||||||||||||
Gross Carrying Amount | Accum. Amort. | Net | Gross Carrying Amount | Accum. Amort. | Net | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||
Re-acquired licensed trademarks | $ | 231 | $ | (122 | ) | $ | 109 | $ | 230 | $ | (112 | ) | $ | 118 | ||||||||||
Customer relationships | 252 | (138 | ) | 114 | 247 | (120 | ) | 127 | ||||||||||||||||
Other | 28 | (14 | ) | 14 | 28 | (13 | ) | 15 | ||||||||||||||||
Total intangible assets subject to amortization | 511 | (274 | ) | 237 | 505 | (245 | ) | 260 | ||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||
Trademarks and brands | 7 | N/A | 7 | 7 | N/A | 7 | ||||||||||||||||||
Total intangible assets | $ | 518 | $ | (274 | ) | $ | 244 | $ | 512 | $ | (245 | ) | $ | 267 |
Amortization Expense | ||||
(millions) | ||||
Fiscal 2017 | $ | 24 | ||
Fiscal 2018 | 24 | |||
Fiscal 2019 | 24 | |||
Fiscal 2020 | 23 | |||
Fiscal 2021 | 21 | |||
Fiscal 2022 and thereafter | 121 | |||
Total | $ | 237 |
F-20 |
8. | Other Current and Non-Current Assets |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Other taxes receivable | $ | 112 | $ | 93 | ||||
Prepaid rent expense | 37 | 31 | ||||||
Restricted cash | 17 | 2 | ||||||
Derivative financial instruments | 16 | 65 | ||||||
Tenant allowances receivable | 13 | 14 | ||||||
Prepaid samples | 9 | 12 | ||||||
Prepaid advertising and marketing | 7 | 7 | ||||||
Other prepaid expenses and current assets | 57 | 57 | ||||||
Total prepaid expenses and other current assets | $ | 268 | $ | 281 |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Non-current investments | $ | 187 | $ | 8 | ||||
Security deposits | 32 | 28 | ||||||
Restricted cash | 29 | 36 | ||||||
Derivative financial instruments | 6 | 22 | ||||||
Other non-current assets | 42 | 37 | ||||||
Total other non-current assets | $ | 296 | $ | 131 |
9. | Other Current and Non-Current Liabilities |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Accrued operating expenses | $ | 186 | $ | 183 | ||||
Accrued inventory | 176 | 75 | ||||||
Accrued payroll and benefits | 149 | 162 | ||||||
Other taxes payable | 139 | 108 | ||||||
Accrued capital expenditures | 65 | 62 | ||||||
Deferred income | 50 | 38 | ||||||
Dividends payable | 41 | 43 | ||||||
Restructuring reserve | 40 | 5 | ||||||
Derivative financial instruments | 26 | 18 | ||||||
Capital lease obligations | 21 | 19 | ||||||
Other accrued expenses and current liabilities | 5 | 2 | ||||||
Total accrued expenses and other current liabilities | $ | 898 | $ | 715 |
F-21 |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Capital lease obligations | $ | 266 | $ | 238 | ||||
Deferred rent obligations | 222 | 219 | ||||||
Derivative financial instruments | 33 | 1 | ||||||
Deferred tax liabilities | 17 | 87 | ||||||
Deferred compensation | 8 | 9 | ||||||
Deferred income | 1 | 20 | ||||||
Other non-current liabilities | 46 | 41 | ||||||
Total other non-current liabilities | $ | 593 | $ | 615 |
10. | Impairments of Assets |
11. | Restructuring and Other Charges |
F-22 |
Fiscal Year Ended | ||||
April 2, 2016 | ||||
(millions) | ||||
Cash-related restructuring charges: | ||||
Severance and benefit costs | $ | 64 | ||
Lease termination and store closure costs | 8 | |||
Other cash charges(a) | 14 | |||
Total cash-related restructuring charges | 86 | |||
Non-cash charges: | ||||
Impairment of assets (see Note 10) | 27 | |||
Accelerated stock-based compensation expense(b) | 9 | |||
Inventory-related charges(c) | 20 | |||
Total non-cash charges | 56 | |||
Total charges | $ | 142 |
(a) | Other cash charges primarily consisted of consulting fees incurred in connection with the Global Reorganization Plan. |
(b) | Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of income, was recorded in connection with vesting provisions associated with certain separation agreements. |
(c) | Inventory-related charges are recorded within cost of goods sold in the consolidated statements of income. |
Severance and Benefit Costs | Lease Termination and Store Closure Costs | Other Cash Charges | Total | |||||||||||||
(millions) | ||||||||||||||||
Balance at March 28, 2015 | $ | — | $ | — | $ | — | $ | — | ||||||||
Additions charged to expense | 64 | 8 | 14 | 86 | ||||||||||||
Cash payments charged against reserve | (33 | ) | (3 | ) | (11 | ) | (47 | ) | ||||||||
Non-cash adjustments | — | 1 | — | 1 | ||||||||||||
Balance at April 2, 2016 | $ | 31 | $ | 6 | $ | 3 | $ | 40 |
F-23 |
12. | Income Taxes |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Domestic | $ | 275 | $ | 620 | $ | 710 | ||||||
Foreign | 277 | 367 | 386 | |||||||||
Total income before provision for income taxes | $ | 552 | $ | 987 | $ | 1,096 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Current: | ||||||||||||
Federal(a) | $ | 88 | $ | 161 | $ | 211 | ||||||
State and local(a) | (3 | ) | 35 | 51 | ||||||||
Foreign | 79 | 78 | 57 | |||||||||
164 | 274 | 319 | ||||||||||
Deferred: | ||||||||||||
Federal | (5 | ) | 22 | (4 | ) | |||||||
State and local | (1 | ) | 3 | 1 | ||||||||
Foreign | (2 | ) | (14 | ) | 4 | |||||||
(8 | ) | 11 | 1 | |||||||||
Total provision for income taxes | $ | 156 | $ | 285 | $ | 320 |
(a) | Excludes federal, state, and local tax benefits of approximately $10 million, $8 million, and $34 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively, resulting from stock-based compensation arrangements. Such amounts were recorded within equity. |
F-24 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Provision for income taxes at the U.S. federal statutory rate | $ | 193 | $ | 346 | $ | 384 | ||||||
Increase (decrease) due to: | ||||||||||||
State and local income taxes, net of federal benefit | 11 | 21 | 29 | |||||||||
Foreign income taxed at different rates, net of U.S. foreign tax credits | (33 | ) | (96 | ) | (89 | ) | ||||||
Unrecognized tax benefits and settlements of tax examinations | (13 | ) | 11 | (5 | ) | |||||||
Other | (2 | ) | 3 | 1 | ||||||||
Total provision for income taxes | $ | 156 | $ | 285 | $ | 320 | ||||||
Effective tax rate(a) | 28.2 | % | 28.9 | % | 29.2 | % |
(a) | Effective tax rate is calculated by dividing the provision for income taxes by income before provision for income taxes. |
F-25 |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Current deferred tax assets: | ||||||||
Receivable allowances and reserves | $ | — | $ | 64 | ||||
Deferred compensation | — | 32 | ||||||
Inventory basis difference | — | 24 | ||||||
Other | — | 15 | ||||||
Valuation allowance | — | — | ||||||
Net current deferred tax assets(a) | — | 135 | ||||||
Non-current deferred tax assets (liabilities): | ||||||||
Goodwill and other intangible assets | (217 | ) | (209 | ) | ||||
Property and equipment | (89 | ) | (86 | ) | ||||
Deferred compensation | 126 | 76 | ||||||
Lease obligations | 88 | 86 | ||||||
Receivable allowances and reserves | 66 | — | ||||||
Inventory basis difference | 29 | — | ||||||
Unrecognized tax benefits | 21 | 30 | ||||||
Net operating loss carryforwards | 21 | 19 | ||||||
Deferred rent | 17 | 18 | ||||||
Deferred income | 15 | 12 | ||||||
Accrued expenses | 9 | — | ||||||
Cumulative translation adjustment and hedges | 8 | (1 | ) | |||||
Transfer pricing | 6 | 14 | ||||||
Other | 12 | 7 | ||||||
Valuation allowance | (10 | ) | (8 | ) | ||||
Net non-current deferred tax assets (liabilities)(b) | 102 | (42 | ) | |||||
Net deferred tax assets | $ | 102 | $ | 93 |
(a) | The net current deferred tax balance as of March 28, 2015 included current deferred tax liabilities of $10 million recorded within accrued expenses and other current liabilities in the consolidated balance sheets. |
(b) | The net non-current deferred tax balances as of April 2, 2016 and March 28, 2015 were comprised of non-current deferred tax assets of $119 million and $45 million, respectively, recorded within deferred tax assets, and non-current deferred tax liabilities of $17 million and $87 million, respectively, recorded within other non-current liabilities in the consolidated balance sheets. |
F-26 |
Fiscal Years Ended | |||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | |||||||||||
(millions) | |||||||||||||
Unrecognized tax benefits beginning balance | $ | 69 | $ | 83 | $ | 100 | |||||||
Additions related to current period tax positions | 5 | 5 | 6 | ||||||||||
Additions related to prior period tax positions | 7 | 10 | 12 | ||||||||||
Reductions related to prior period tax positions | (12 | ) | (1 | ) | (13 | ) | (b) | ||||||
Reductions related to expiration of statutes of limitations | (7 | ) | (1 | ) | (2 | ) | |||||||
Reductions related to settlements with taxing authorities | (12 | ) | (25 | ) | (a) | (23 | ) | (b) | |||||
Additions (reductions) related to foreign currency translation | — | (2 | ) | 3 | |||||||||
Unrecognized tax benefits ending balance | $ | 50 | $ | 69 | $ | 83 |
(a) | Includes a $20 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2015 for the taxable years ended April 2, 2011 and April 3, 2012. |
(b) | Includes a $29 million decline in unrecognized tax benefits as a result of the Company's tax settlement agreement reached in Fiscal 2014 for the taxable years ended April 3, 2004 and April 2, 2005. |
F-27 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Accrued interest and penalties beginning balance | $ | 47 | $ | 49 | $ | 50 | ||||||
Net additions charged to expense | 4 | 6 | 6 | |||||||||
Reductions related to prior period tax positions | (15 | ) | (1 | ) | (4 | ) | ||||||
Reductions related to settlements with taxing authorities | (5 | ) | (5 | ) | (5 | ) | ||||||
Additions (reductions) related to foreign currency translation | — | (2 | ) | 2 | ||||||||
Accrued interest and penalties ending balance | $ | 31 | $ | 47 | $ | 49 |
13. | Debt |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
$300 million 2.125% Senior Notes(a) | $ | 301 | $ | 298 | ||||
$300 million 2.625% Senior Notes(b) | 296 | — | ||||||
Commercial paper notes | 90 | 234 | ||||||
Borrowings outstanding under credit facilities | 26 | — | ||||||
Total debt | 713 | 532 | ||||||
Less: short-term debt | 116 | 234 | ||||||
Total long-term debt | $ | 597 | $ | 298 |
(a) | During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.125% Senior Notes (see Note 15). Accordingly, the carrying value of the 2.125% Senior Notes as of April 2, 2016 reflects an adjustment of $2 million for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.125% Senior Notes is also net of unamortized debt issuance costs and discount of $1 million and $2 million as of April 2, 2016 and March 28, 2015, respectively. |
F-28 |
(b) | During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.625% Senior Notes (see Note 15). Accordingly, the carrying value of the 2.625% Senior Notes as of April 2, 2016 reflects an adjustment of $2 million for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.625% Senior Notes is also net of unamortized debt issuance costs and discount of $2 million as of April 2, 2016. |
F-29 |
• | China Credit Facility — provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to 100 million Chinese Renminbi (approximately $16 million) through April 6, 2017, and may also be used to support bank guarantees. As of April 2, 2016, bank guarantees supported by this facility were not material. |
• | South Korea Credit Facility — provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to 47 billion South Korean Won (approximately $41 million) through October 31, 2016. |
F-30 |
14. | Fair Value Measurements |
• | Level 1 — inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets. |
• | Level 2 — inputs to the valuation methodology based on quoted prices for similar assets or liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable. |
• | Level 3 — inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement. |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Financial assets recorded at fair value: | ||||||||
Corporate bonds — non-U.S.(a) | $ | 8 | $ | 8 | ||||
Derivative financial instruments(b) | 22 | 87 | ||||||
Total | $ | 30 | $ | 95 | ||||
Financial liabilities recorded at fair value: | ||||||||
Derivative financial instruments(b) | $ | 59 | $ | 19 | ||||
Total | $ | 59 | $ | 19 |
(a) | Based on Level 1 measurements. |
(b) | Based on Level 2 measurements. |
F-31 |
April 2, 2016 | March 28, 2015 | |||||||||||||||
Carrying Value | Fair Value(a) | Carrying Value | Fair Value(a) | |||||||||||||
(millions) | ||||||||||||||||
$300 million 2.125% Senior Notes | $ | 301 | (b) | $ | 306 | $ | 298 | (b) | $ | 304 | ||||||
$300 million 2.625% Senior Notes | 296 | (b) | 308 | — | — | |||||||||||
Commercial paper notes | 90 | 90 | 234 | 234 | ||||||||||||
Borrowings outstanding under credit facilities | 26 | 26 | — | — |
(a) | Based on Level 2 measurements. |
(b) | See Note 13 for discussion of the carrying values of the Company's Senior Notes as of April 2, 2016 and March 28, 2015. |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Aggregate carrying value of long-lived assets written down to fair value | $ | 49 | $ | 7 | $ | 1 | ||||||
Impairment charges(a) | (49 | ) | (7 | ) | (1 | ) |
(a) | See Note 10 for details of impairment charges recorded in Fiscal 2016, Fiscal 2015, and Fiscal 2014. |
F-32 |
15. | Financial Instruments |
Notional Amounts | Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||||
Derivative Instrument(a) | April 2, 2016 | March 28, 2015 | April 2, 2016 | March 28, 2015 | April 2, 2016 | March 28, 2015 | ||||||||||||||||||||||||||
Balance Sheet Line(b) | Fair Value | Balance Sheet Line(b) | Fair Value | Balance Sheet Line(b) | Fair Value | Balance Sheet Line(b) | Fair Value | |||||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||||||
Designated Hedges: | ||||||||||||||||||||||||||||||||
FC — Inventory purchases | $ | 532 | $ | 587 | PP | $ | 1 | PP | $ | 49 | AE | $ | 14 | AE | $ | 9 | ||||||||||||||||
FC — Other(c) | 210 | 118 | — | — | PP | 5 | AE | 9 | AE | 1 | ||||||||||||||||||||||
IRS — Fixed-rate debt | 600 | — | ONCA | 2 | — | — | ONCL | 2 | — | — | ||||||||||||||||||||||
CCS — NI | 630 | — | — | — | — | — | ONCL | 31 | — | — | ||||||||||||||||||||||
Total Designated Hedges | $ | 1,972 | $ | 705 | $ | 3 | $ | 54 | $ | 56 | $ | 10 | ||||||||||||||||||||
Undesignated Hedges: | ||||||||||||||||||||||||||||||||
FC — Other(d) | $ | 541 | $ | 464 | (e) | $ | 19 | (f) | $ | 33 | AE | $ | 3 | (g) | $ | 9 | ||||||||||||||||
Total Hedges | $ | 2,513 | $ | 1,169 | $ | 22 | $ | 87 | $ | 59 | $ | 19 |
(a) | FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts; CCS = Cross-currency swap contracts; NI = Net investment hedges. |
(b) | PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities. |
(c) | Primarily includes designated hedges of foreign currency-denominated intercompany royalty payments and other operational exposures. |
(d) | Primarily includes undesignated hedges of foreign currency-denominated intercompany loans and other intercompany balances. |
(e) | $15 million included within prepaid expenses and other current assets and $4 million included within other non-current assets. |
(f) | $11 million included within prepaid expenses and other current assets and $22 million included within other non-current assets. |
(g) | $8 million included within accrued expenses and other current liabilities and $1 million included within other non-current liabilities. |
F-33 |
April 2, 2016 | March 28, 2015 | |||||||||||||||||||||||
Derivative Instrument | Gross Amounts Presented in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Arrangements | Net Amount | Gross Amounts Presented in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Arrangements | Net Amount | ||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Derivative assets | $ | 22 | $ | (11 | ) | $ | 11 | $ | 87 | $ | (14 | ) | $ | 73 | ||||||||||
Derivative liabilities | $ | 59 | $ | (11 | ) | $ | 48 | $ | 19 | $ | (14 | ) | $ | 5 |
Gains (Losses) Recognized in OCI | Gains (Losses) Reclassified from AOCI to Earnings | Location of Gains (Losses) Reclassified from AOCI to Earnings | ||||||||||||||||||||||||
Fiscal Years Ended | Fiscal Years Ended | |||||||||||||||||||||||||
Derivative Instrument | April 2, 2016 | March 28, 2015 | March 29, 2014 | April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||
Designated Cash Flow Hedges: | ||||||||||||||||||||||||||
FC — Inventory purchases | $ | (7 | ) | $ | 50 | $ | (10 | ) | $ | 44 | $ | 3 | $ | 10 | Cost of goods sold | |||||||||||
FC — Other | (14 | ) | 19 | — | (5 | ) | 14 | — | Foreign currency gains (losses) | |||||||||||||||||
$ | (21 | ) | $ | 69 | $ | (10 | ) | $ | 39 | $ | 17 | $ | 10 | |||||||||||||
Designated Hedges of Net Investments: | ||||||||||||||||||||||||||
CCS(a) | $ | (28 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Total Designated Hedges | $ | (49 | ) | $ | 69 | $ | (10 | ) | $ | 39 | $ | 17 | $ | 10 |
(a) | Amounts recognized in OCI would be recognized in earnings only upon the sale or liquidation of the hedged net investment. |
F-34 |
Gains (Losses) Recognized in Earnings | Location of Gains (Losses) Recognized in Earnings | |||||||||||||
Fiscal Years Ended | ||||||||||||||
Derivative Instrument | April 2, 2016 | March 28, 2015 | March 29, 2014 | |||||||||||
(millions) | ||||||||||||||
Undesignated Hedges: | ||||||||||||||
FC — Other | $ | (7 | ) | $ | 18 | $ | 20 | Foreign currency gains (losses) | ||||||
Total Undesignated Hedges | $ | (7 | ) | $ | 18 | $ | 20 |
F-35 |
16. | Commitments and Contingencies |
Minimum Operating Lease Payments(a)(b) | ||||
(millions) | ||||
Fiscal 2017 | $ | 346 | ||
Fiscal 2018 | 329 | |||
Fiscal 2019 | 305 | |||
Fiscal 2020 | 279 | |||
Fiscal 2021 | 215 | |||
Fiscal 2022 and thereafter | 733 | |||
Total net minimum rental payments | $ | 2,207 |
(a) | Net of sublease income, which is not significant in any period. |
(b) | Includes a $58 million operating lease obligation related to the land portion of the build-to-suit lease agreement for the Company's Polo flagship store on Fifth Avenue in New York City, as further described below. |
F-36 |
Minimum Capital Lease Payments(a)(b) | ||||
(millions) | ||||
Fiscal 2017 | $ | 30 | ||
Fiscal 2018 | 28 | |||
Fiscal 2019 | 26 | |||
Fiscal 2020 | 28 | |||
Fiscal 2021 | 27 | |||
Fiscal 2022 and thereafter | 106 | |||
Total net minimum rental payments | 245 | |||
Less: amount representing interest | (59 | ) | ||
Present value of net minimum rental payments | $ | 186 |
(a) | Net of sublease income, which is not significant in any period. |
(b) | Includes lease payments related to the Company's build-to-suit lease agreement for its Polo flagship store on Fifth Avenue in New York City. The total remaining commitment related to this lease was $185 million as of April 2, 2016, comprised of a $58 million operating lease obligation related to the land portion of the lease (included in the minimum operating lease payments table above) and a $127 million obligation related to the building portion of the lease (included in this minimum capital lease payments table). |
F-37 |
17. | Equity |
F-38 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(in millions) | ||||||||||||
Cost of shares repurchased | $ | 480 | $ | 500 | $ | 548 | (a) | |||||
Number of shares repurchased | 4.2 | 3.2 | 3.2 | (a) |
(a) | Includes a $50 million prepayment made in March 2013 under a share repurchase program with a third-party financial institution, in exchange for the right to receive shares of the Company's Class A common stock at the conclusion of the 93-day repurchase term. The $50 million prepayment was recorded as a reduction to additional paid-in capital in the Company's consolidated balance sheet as of March 30, 2013. The related 0.3 million shares were delivered to the Company during Fiscal 2014, based on the volume-weighted average market price of the Company's Class A common stock over the 93-day repurchase term, less a discount. |
F-39 |
18. | Accumulated Other Comprehensive Income |
Foreign Currency Translation Gains (Losses)(a) | Net Unrealized Gains (Losses) on Cash Flow Hedges(b) | Net Unrealized Gains (Losses) on Available-for-Sale Investments(c) | Net Unrealized Gains (Losses) on Defined Benefit Plans(d) | Total Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
(millions) | ||||||||||||||||||||
Balance at March 30, 2013 | $ | 73 | $ | 23 | $ | 5 | $ | (7 | ) | $ | 94 | |||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
OCI before reclassifications | 52 | (20 | ) | (4 | ) | — | 28 | |||||||||||||
Amounts reclassified from AOCI to earnings | — | (7 | ) | (1 | ) | — | (8 | ) | ||||||||||||
Other comprehensive income (loss), net of tax | 52 | (27 | ) | (5 | ) | — | 20 | |||||||||||||
Balance at March 29, 2014 | 125 | (4 | ) | — | (7 | ) | 114 | |||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
OCI before reclassifications | (318 | ) | 62 | — | (9 | ) | (265 | ) | ||||||||||||
Amounts reclassified from AOCI to earnings | — | (15 | ) | — | 1 | (14 | ) | |||||||||||||
Other comprehensive income (loss), net of tax | (318 | ) | 47 | — | (8 | ) | (279 | ) | ||||||||||||
Balance at March 28, 2015 | (193 | ) | 43 | — | (15 | ) | (165 | ) | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
OCI before reclassifications | 36 | (19 | ) | — | 1 | 18 | ||||||||||||||
Amounts reclassified from AOCI to earnings | — | (36 | ) | — | 2 | (34 | ) | |||||||||||||
Other comprehensive income (loss), net of tax | 36 | (55 | ) | — | 3 | (16 | ) | |||||||||||||
Balance at April 2, 2016 | $ | (157 | ) | $ | (12 | ) | $ | — | $ | (12 | ) | $ | (181 | ) |
(a) | OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes income tax benefits of $11 million and $5 million for Fiscal 2016 and Fiscal 2015, respectively, and includes an income tax provision of $2 million for Fiscal 2014. OCI before reclassifications to earnings for Fiscal 2016 includes losses of $17 million (net of an $11 million income tax benefit) related to the effective portion of changes in the fair values of the Cross-Currency Swaps designated as hedges of the Company's net investment in certain of its European subsidiaries (see Note 15). |
(b) | OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges includes an income tax benefit of $2 million for Fiscal 2016 and an income tax provision of $7 million for Fiscal 2015. The tax effect for Fiscal 2014 activity was not material. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below. |
(c) | All amounts are presented net of taxes, which were not material. |
(d) | OCI before reclassifications to earnings related to net unrealized gains (losses) on defined benefit plans includes an income tax benefit of $1 million for Fiscal 2015. The tax effects for both Fiscal 2016 and Fiscal 2014 were not material. The tax effects on amounts reclassified from AOCI to earnings were not material for any period presented. |
F-40 |
Fiscal Years Ended | ||||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | Location of Gains (Losses) Reclassified from AOCI to Earnings | |||||||||||
(millions) | ||||||||||||||
Gains (losses) on cash flow hedges(a): | ||||||||||||||
FC — Inventory purchases | $ | 44 | $ | 3 | $ | 10 | Cost of goods sold | |||||||
FC — Other | (5 | ) | 14 | — | Foreign currency gains (losses) | |||||||||
Tax effect | (3 | ) | (2 | ) | (3 | ) | Provision for income taxes | |||||||
Net of tax | $ | 36 | $ | 15 | $ | 7 |
(a) | FC = Forward foreign currency exchange contracts. |
19. | Stock-based Compensation |
Fiscal Years Ended | |||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | |||||||||||
(millions) | |||||||||||||
Compensation expense | $ | 97 | (a) | $ | 81 | $ | 93 | (a) | |||||
Income tax benefit | $ | (37 | ) | $ | (30 | ) | $ | (34 | ) |
(a) | Fiscal 2016 and Fiscal 2014 include approximately $9 million and $10 million, respectively, of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of income (see Note 11). All other stock-based compensation expense was recorded within SG&A expenses. |
F-41 |
Fiscal Years Ended | ||||||||
April 2, 2016(a) | March 28, 2015 | March 29, 2014 | ||||||
Expected term (years) | N/A | 4.2 | 4.2 | |||||
Expected volatility | N/A | 30.2 | % | 32.9 | % | |||
Expected dividend yield | N/A | 1.10 | % | 0.98 | % | |||
Risk-free interest rate | N/A | 1.4 | % | 1.1 | % | |||
Weighted-average option grant date fair value | N/A | $37.91 | $45.83 |
(a) | No stock options were granted during Fiscal 2016. |
F-42 |
Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value(a) | ||||||||||
(thousands) | (years) | (millions) | |||||||||||
Options outstanding at March 28, 2015 | 3,225 | $ | 129.28 | 4.0 | $ | 69 | |||||||
Granted | — | N/A | |||||||||||
Exercised | (625 | ) | 52.37 | ||||||||||
Cancelled/Forfeited | (182 | ) | 163.56 | ||||||||||
Options outstanding at April 2, 2016 | 2,418 | $ | 146.58 | 3.7 | $ | 6 | |||||||
Options vested and expected to vest at April 2, 2016(b) | 2,391 | $ | 145.60 | 3.7 | $ | 6 | |||||||
Options exercisable at April 2, 2016 | 1,818 | $ | 140.34 | 3.3 | $ | 6 |
(a) | Aggregate intrinsic value is the amount by which the market price of Class A common stock at the end of the period exceeds the exercise price of the stock option, multiplied by the number of options. |
(b) | The number of options expected to vest takes into consideration expected forfeitures. |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Aggregate intrinsic value of stock options exercised(a) | $ | 44 | $ | 35 | $ | 63 | ||||||
Cash received from the exercise of stock options | 34 | 52 | 52 | |||||||||
Tax benefits realized on exercise of stock options | 17 | 12 | 24 |
(a) | Aggregate intrinsic value is the amount by which the market price of Class A common stock exceeded the stock option's exercise price when exercised, multiplied by the number of options. |
F-43 |
Restricted Stock | Service- based RSUs | |||||||||||||
Number of Shares | Weighted-Average Grant Date Fair Value | Number of Shares | Weighted-Average Grant Date Fair Value | |||||||||||
(thousands) | (thousands) | |||||||||||||
Nonvested at March 28, 2015 | 5 | $ | 164.73 | 47 | $ | 150.01 | ||||||||
Granted | 17 | 111.94 | 508 | 125.19 | ||||||||||
Vested | (7 | ) | 153.53 | (18 | ) | 149.28 | ||||||||
Forfeited | (1 | ) | 139.87 | (47 | ) | 129.60 | ||||||||
Nonvested at April 2, 2016 | 14 | $ | 110.68 | 490 | $ | 126.30 |
Restricted Stock | Service- based RSUs | |||||||
Total unrecognized compensation expense at April 2, 2016 (millions) | $ | 1 | $ | 25 | ||||
Weighted-average period expected to be recognized over (years) | 1.8 | 1.5 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
Restricted Stock: | ||||||||||||
Weighted-average grant date fair value of awards granted | $ | 111.94 | $ | 162.36 | $ | 164.76 | ||||||
Total fair value of awards vested (millions) | $ | 1 | $ | 1 | $ | 1 | ||||||
Service-based RSUs: | ||||||||||||
Weighted-average grant date fair value of awards granted | $ | 125.19 | $ | 150.23 | N/A | |||||||
Total fair value of awards vested (millions) | $ | 2 | $ | 1 | $ | 16 |
F-44 |
Fiscal Years Ended | ||||||||
April 2, 2016(a) | March 28, 2015 | March 29, 2014 | ||||||
Expected term (years) | N/A | 3.0 | 2.9 | |||||
Expected volatility | N/A | 29.8 | % | 32.6 | % | |||
Expected dividend yield | N/A | 1.09 | % | 0.98 | % | |||
Risk-free interest rate | N/A | 0.9 | % | 0.4 | % | |||
Weighted-average grant date fair value | N/A | $169.47 | $169.14 |
(a) | No performance-based RSUs with a TSR modifier were granted during Fiscal 2016. |
Performance-based RSUs — without TSR Modifier | Performance-based RSUs — with TSR Modifier | |||||||||||||
Number of Shares | Weighted-Average Grant Date Fair Value | Number of Shares | Weighted-Average Grant Date Fair Value | |||||||||||
(thousands) | (thousands) | |||||||||||||
Nonvested at March 28, 2015 | 697 | $ | 155.47 | 214 | $ | 158.65 | ||||||||
Granted | 341 | 126.48 | — | N/A | ||||||||||
Change due to performance/market condition achievement | (8 | ) | 137.08 | (20 | ) | 136.27 | ||||||||
Vested | (293 | ) | 147.26 | (50 | ) | 136.30 | ||||||||
Forfeited | (46 | ) | 155.61 | (2 | ) | 167.64 | ||||||||
Nonvested at April 2, 2016 | 691 | $ | 144.81 | 142 | $ | 169.46 |
Performance-based RSUs — without TSR Modifier | Performance-based RSUs — with TSR Modifier | |||||||
Total unrecognized compensation expense at April 2, 2016 (millions) | $ | 25 | $ | 3 | ||||
Weighted-average period expected to be recognized over (years) | 1.6 | 1.1 |
F-45 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
Performance-based RSUs — without TSR Modifier: | ||||||||||||
Weighted-average grant date fair value of awards granted | $ | 126.48 | $ | 157.10 | $ | 171.93 | ||||||
Total fair value of awards vested (millions) | $ | 38 | $ | 65 | $ | 109 | ||||||
Performance-based RSUs — with TSR Modifier: | ||||||||||||
Weighted-average grant date fair value of awards granted | N/A | $ | 169.47 | $ | 169.14 | |||||||
Total fair value of awards vested (millions) | $ | 7 | $ | — | $ | — |
20. | Employee Benefit Plans |
F-46 |
21. | Segment Information |
F-47 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Net revenues: | ||||||||||||
Wholesale | $ | 3,297 | $ | 3,495 | $ | 3,486 | ||||||
Retail | 3,933 | 3,956 | 3,798 | |||||||||
Licensing | 175 | 169 | 166 | |||||||||
Total net revenues(a) | $ | 7,405 | $ | 7,620 | $ | 7,450 |
(a) | The Company's sales to its largest wholesale customer, Macy's, accounted for approximately 11% of its total net revenues in Fiscal 2016 and approximately 12% of its total net revenues in each of Fiscal 2015 and Fiscal 2014. |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Operating income: | ||||||||||||
Wholesale(a) | $ | 822 | $ | 943 | $ | 963 | ||||||
Retail(b) | 359 | 527 | 572 | |||||||||
Licensing | 155 | 152 | 150 | |||||||||
1,336 | 1,622 | 1,685 | ||||||||||
Unallocated corporate expenses | (611 | ) | (577 | ) | (553 | ) | ||||||
Gain on acquisition of Chaps(c) | — | — | 16 | |||||||||
Unallocated restructuring and other charges(d) | (143 | ) | (10 | ) | (18 | ) | ||||||
Total operating income | $ | 582 | $ | 1,035 | $ | 1,130 |
(a) | During Fiscal 2016, the Company recorded non-cash impairment charges of $6 million, primarily to write off certain fixed assets related to its shop-within-shops in connection with the Global Reorganization Plan. During Fiscal 2014, the Company recorded non-cash impairment charges of $1 million, primarily to write off certain fixed assets related to its European wholesale operations. See Notes 10 and 11 for additional information. |
(b) | During Fiscal 2016, the Company recorded non-cash impairment charges of $43 million, primarily to write off certain fixed assets related to its stores and concession-based shop-within-shops in connection with the Global Reorganization Plan. During Fiscal 2015, the Company recorded non-cash impairment charges of $7 million, primarily to write off certain fixed assets related to its domestic and international retail stores. See Notes 10 and 11 for additional information. |
(c) | See Note 5 for a description of the gain on acquisition of Chaps recorded during Fiscal 2014. |
(d) | The fiscal years presented included certain unallocated restructuring and other charges (see Note 11), which are detailed below: |
F-48 |
Fiscal Years Ended | |||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | |||||||||||
(millions) | |||||||||||||
Restructuring and other charges: | |||||||||||||
Restructuring charges: | |||||||||||||
Wholesale-related | $ | (13 | ) | $ | (4 | ) | $ | — | |||||
Retail-related | (27 | ) | (4 | ) | — | ||||||||
Licensing-related | (1 | ) | — | — | |||||||||
Corporate operations-related | (54 | ) | (2 | ) | (8 | ) | |||||||
Unallocated restructuring charges | (95 | ) | (10 | ) | (8 | ) | |||||||
Other charges (see Note 11) | (48 | ) | — | (10 | ) | ||||||||
Total unallocated restructuring and other charges | $ | (143 | ) | $ | (10 | ) | $ | (18 | ) |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Depreciation and amortization: | ||||||||||||
Wholesale | $ | 61 | $ | 66 | $ | 66 | ||||||
Retail | 157 | 154 | 125 | |||||||||
Licensing | 1 | — | — | |||||||||
Unallocated corporate | 91 | 74 | 67 | |||||||||
Total depreciation and amortization | $ | 310 | $ | 294 | $ | 258 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Capital expenditures: | ||||||||||||
Wholesale | $ | 43 | $ | 48 | $ | 53 | ||||||
Retail | 173 | 237 | 252 | |||||||||
Licensing | 4 | 4 | 1 | |||||||||
Unallocated corporate | 198 | 102 | 84 | |||||||||
Total capital expenditures | $ | 418 | $ | 391 | $ | 390 |
F-49 |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Total assets: | ||||||||
Wholesale | $ | 2,569 | $ | 2,643 | ||||
Retail | 2,540 | 2,395 | ||||||
Licensing | 188 | 197 | ||||||
Corporate | 916 | 871 | ||||||
Total assets | $ | 6,213 | $ | 6,106 |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Net revenues(a): | ||||||||||||
The Americas(b) | $ | 4,938 | $ | 5,077 | $ | 4,983 | ||||||
Europe(c) | 1,573 | 1,627 | 1,580 | |||||||||
Asia(d) | 894 | 916 | 887 | |||||||||
Total net revenues | $ | 7,405 | $ | 7,620 | $ | 7,450 |
April 2, 2016 | March 28, 2015 | |||||||
(millions) | ||||||||
Long-lived assets(a): | ||||||||
The Americas(b) | $ | 1,206 | $ | 1,106 | ||||
Europe(c) | 212 | 148 | ||||||
Asia(d) | 165 | 182 | ||||||
Total long-lived assets | $ | 1,583 | $ | 1,436 |
(a) | Net revenues and long-lived assets for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license. |
(b) | Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. were $4.688 billion, $4.827 billion, and $4.744 billion in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Long-lived assets located in the U.S. were $1.160 billion and $1.069 billion as of April 2, 2016 and March 28, 2015, respectively. |
(c) | Includes the Middle East. |
(d) | Includes Australia and New Zealand. |
F-50 |
22. | Additional Financial Information |
Fiscal Years Ended | ||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | ||||||||||
(millions) | ||||||||||||
Cash paid for interest | $ | 15 | $ | 15 | $ | 20 | ||||||
Cash paid for income taxes | $ | 172 | $ | 317 | $ | 302 |
F-51 |
/s/ STEFAN LARSSON | /s/ ROBERT L. MADORE | |
Stefan Larsson | Robert L. Madore | |
President and Chief Executive Officer | Corporate Senior Vice President and Chief Financial Officer | |
(Principal Executive Officer) | (Principal Financial and Accounting Officer) |
F-52 |
F-53 |
F-54 |
Fiscal Years Ended(a) | ||||||||||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014(b) | March 30, 2013(c) | March 31, 2012 | ||||||||||||||||
(millions, except per share data) | ||||||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||
Net revenues: | ||||||||||||||||||||
Net sales | $ | 7,230 | $ | 7,451 | $ | 7,284 | $ | 6,763 | $ | 6,679 | ||||||||||
Licensing revenue | 175 | 169 | 166 | 182 | 181 | |||||||||||||||
Net revenues | 7,405 | 7,620 | 7,450 | 6,945 | 6,860 | |||||||||||||||
Gross profit | 4,187 | 4,378 | 4,310 | 4,156 | 3,998 | |||||||||||||||
Depreciation and amortization expense | (310 | ) | (294 | ) | (258 | ) | (233 | ) | (225 | ) | ||||||||||
Impairment of assets | (49 | ) | (7 | ) | (1 | ) | (19 | ) | (2 | ) | ||||||||||
Restructuring and other charges | (143 | ) | (10 | ) | (18 | ) | (12 | ) | (12 | ) | ||||||||||
Operating income | 582 | 1,035 | 1,130 | 1,127 | 1,039 | |||||||||||||||
Interest expense, net | (15 | ) | (11 | ) | (17 | ) | (16 | ) | (13 | ) | ||||||||||
Net income | $ | 396 | $ | 702 | $ | 776 | $ | 750 | $ | 681 | ||||||||||
Net income per common share: | ||||||||||||||||||||
Basic | $ | 4.65 | $ | 7.96 | $ | 8.55 | $ | 8.21 | $ | 7.35 | ||||||||||
Diluted | $ | 4.62 | $ | 7.88 | $ | 8.43 | $ | 8.00 | $ | 7.13 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 85.2 | 88.2 | 90.7 | 91.3 | 92.7 | |||||||||||||||
Diluted | 85.9 | 89.1 | 92.0 | 93.7 | 95.5 | |||||||||||||||
Dividends declared per common share | $ | 2.00 | $ | 1.85 | $ | 1.70 | $ | 1.60 | $ | 0.80 |
(a) | Fiscal 2016 consisted of 53 weeks. All other fiscal years presented consisted of 52 weeks. |
(b) | Reflects the Chaps Menswear License Acquisition effective in April 2013, which resulted in the recognition of a $16 million gain on acquisition, as well as the Australia and New Zealand Licensed Operations Acquisition effective in July 2013 (see Note 5 to the accompanying audited consolidated financial statements). |
(c) | Reflects the acquisition of the Ralph Lauren-branded business in Latin America effective in June 2012, the discontinuance of the majority of products sold under the American Living brand effective with the Fall 2012 wholesale selling season, and the wind down of the Rugby brand operations during the second half of the fiscal year. |
F-55 |
April 2, 2016 | March 28, 2015 | March 29, 2014 | March 30, 2013 | March 31, 2012 | ||||||||||||||||
(millions) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 456 | $ | 500 | $ | 797 | $ | 974 | $ | 672 | ||||||||||
Investments | 816 | 652 | 490 | 406 | 616 | |||||||||||||||
Working capital(a) | 1,855 | 2,138 | 2,359 | 1,842 | 1,954 | |||||||||||||||
Total assets | 6,213 | 6,106 | 6,088 | 5,418 | 5,416 | |||||||||||||||
Total debt (including current maturities of debt) | 713 | 532 | 298 | 267 | 274 | |||||||||||||||
Equity | 3,744 | 3,891 | 4,034 | 3,785 | 3,653 |
(a) | Working capital is calculated as total current assets less total current liabilities (including current maturities of debt). Working capital as of April 2, 2016 reflects the Company's adoption of ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes," which requires all deferred tax assets and liabilities, together with any related valuation allowances, to be classified as non-current on the consolidated balance sheet. Prior periods were not retrospectively adjusted (see Note 4 to the accompanying audited consolidated financial statements). |
F-56 |
Quarterly Periods Ended(a)(b) | ||||||||||||||||
June 27, 2015 | September 26, 2015 | December 26, 2015 | April 2, 2016(c) | |||||||||||||
(millions, except per share data) | ||||||||||||||||
Net revenues | $ | 1,618 | $ | 1,970 | $ | 1,946 | $ | 1,871 | ||||||||
Gross profit | 966 | 1,113 | 1,094 | 1,014 | ||||||||||||
Net income | 64 | 160 | 131 | 41 | ||||||||||||
Net income per common share(d): | ||||||||||||||||
Basic | $ | 0.74 | $ | 1.87 | $ | 1.55 | $ | 0.49 | ||||||||
Diluted | $ | 0.73 | $ | 1.86 | $ | 1.54 | $ | 0.49 | ||||||||
Dividends declared per common share | $ | 0.50 | $ | 0.50 | $ | 0.50 | $ | 0.50 | ||||||||
Quarterly Periods Ended(a) | ||||||||||||||||
June 28, 2014 | September 27, 2014 | December 27, 2014 | March 28, 2015 | |||||||||||||
(millions, except per share data) | ||||||||||||||||
Net revenues | $ | 1,708 | $ | 1,994 | $ | 2,033 | $ | 1,885 | ||||||||
Gross profit | 1,043 | 1,132 | 1,159 | 1,044 | ||||||||||||
Net income | 162 | 201 | 215 | 124 | ||||||||||||
Net income per common share(d): | ||||||||||||||||
Basic | $ | 1.82 | $ | 2.27 | $ | 2.44 | $ | 1.43 | ||||||||
Diluted | $ | 1.80 | $ | 2.25 | $ | 2.41 | $ | 1.41 | ||||||||
Dividends declared per common share | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 0.50 |
(a) | The fourth quarter of Fiscal 2016 consisted of 14 weeks. All other fiscal quarters presented consisted of 13 weeks. |
(b) | Net income and net income per common share for the three-month periods ended June 27, 2015, September 26, 2015, December 26, 2015, and April 2, 2016 have been affected by pretax charges of $45 million, $38 million, $77 million, and $52 million, respectively, recorded in connection with the Global Reorganization Plan, a pending customs audit, the settlement of certain litigation claims, and other non-cash impairment charges related to underperforming stores subject to potential future closure (see Notes 10 and 11 to the accompanying audited consolidated financial statements). |
(c) | The inclusion of the 14th week in the fourth quarter of Fiscal 2016 resulted in incremental net revenues of approximately $72 million and net income of $8 million, or approximately $0.10 per diluted share. |
(d) | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts may not add to the annual amount because of differences in the average number of common shares outstanding during each period. |
F-57 |
1 |
2 |
3 |
4 |
5 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
Fiscal Years Ended(a) | ||||||||||||||||||||
April 2, 2016 | March 28, 2015 | March 29, 2014 | March 30, 2013 | March 31, 2012 | ||||||||||||||||
(millions) | ||||||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||
Income before provision for income taxes | $ | 552 | $ | 987 | $ | 1,096 | $ | 1,089 | $ | 1,015 | ||||||||||
Add: | ||||||||||||||||||||
Equity in losses of equity-method investees | 11 | 11 | 9 | 10 | 9 | |||||||||||||||
Fixed charges | 178 | 172 | 170 | 162 | 164 | |||||||||||||||
Subtract: | ||||||||||||||||||||
Income attributable to noncontrolling interests | — | — | — | 1 | — | |||||||||||||||
Earnings available to cover fixed charges | $ | 741 | $ | 1,170 | $ | 1,275 | $ | 1,260 | $ | 1,188 | ||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest expense | $ | 21 | $ | 17 | $ | 19 | $ | 19 | $ | 22 | ||||||||||
Interest component of rent expense | 157 | 155 | 151 | 143 | 142 | |||||||||||||||
Total fixed charges | $ | 178 | $ | 172 | $ | 170 | $ | 162 | $ | 164 | ||||||||||
Ratio of earnings to fixed charges(b) | 4.2 | 6.8 | 7.5 | 7.8 | 7.3 |
(a) | Fiscal 2016 consisted of 53 weeks. All other fiscal years presented consisted of 52 weeks. |
(b) | All ratios shown in the above table have been calculated using unrounded numbers. |
Entity Name | Jurisdiction of Formation | |
Acqui Polo CV | Netherlands | |
Acqui Polo GP, LLC | Delaware | |
PRL Fashions Inc. | Delaware | |
PRL International, Inc. | Delaware | |
PRL Netherlands Limited, LLC (f/k/a Acqui Polo Limited, LLC) | Delaware | |
PRL USA Holdings, Inc. | Delaware | |
Ralph Lauren Asia Pacific Limited (f/k/a Polo Ralph Lauren Asia Pacific, Limited) | Hong Kong | |
Ralph Lauren Europe Sàrl (f/k/a Polo Ralph Lauren Europe Sàrl) | Switzerland | |
Ralph Lauren Holding BV (f/k/a Polo Hold BV) | Netherlands | |
Ralph Lauren Retail, Inc. (f/k/a Fashions Outlet of America, Inc.) | Delaware | |
RL Acqui Polo Holding GP, LLC | Delaware | |
RL CV Holding Limited, LLC | Delaware | |
RL Finance BV (f/k/a Polo Fin BV) | Netherlands | |
The Polo/Lauren Company LP | New York | |
/s/ STEFAN LARSSON | |
Stefan Larsson | |
President and Chief Executive Officer | |
(Principal Executive Officer) | |
Date: May 19, 2016 |
/s/ ROBERT L. MADORE | |
Robert L. Madore | |
Corporate Senior Vice President and Chief Financial Officer | |
(Principal Financial and Accounting Officer) | |
Date: May 19, 2016 |
/s/ STEFAN LARSSON | |
Stefan Larsson | |
May 19, 2016 |
/s/ ROBERT L. MADORE | |
Robert L. Madore | |
May 19, 2016 |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
May. 13, 2016 |
Sep. 25, 2015 |
|
Entity Registrant Name | RALPH LAUREN CORP | ||
Entity Central Index Key | 0001037038 | ||
Document Type | 10-K | ||
Document Period End Date | Apr. 02, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --04-02 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 6,341,781,793 | ||
Common stock, Class A | |||
Entity Common Stock, Shares Outstanding | 57,020,766 | ||
Common stock, Class B | |||
Entity Common Stock, Shares Outstanding | 25,881,276 |
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Allowances on accounts receivable | $ 254 | $ 251 |
Common stock, Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 101.0 | 100.0 |
Common stock, shares outstanding | 57.0 | 60.4 |
Treasury stock, shares | 44.0 | 39.6 |
Common stock, Class B | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 25.9 | 25.9 |
Common stock, shares outstanding | 25.9 | 25.9 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 396 | $ 702 | $ 776 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation gains (losses) | 36 | (318) | 52 |
Net gains (losses) on cash flow hedges | (55) | 47 | (27) |
Net losses on available-for-sale investments | 0 | 0 | (5) |
Net gains (losses) on defined benefit plans | 3 | (8) | 0 |
Other comprehensive income (loss), net of tax | (16) | (279) | 20 |
Total comprehensive income | $ 380 | $ 423 | $ 796 |
Consolidated Statements of Equity - USD ($) shares in Millions, $ in Millions |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Treasury Stock [Member] |
AOCI [Member] |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance at Mar. 30, 2013 | $ 3,785 | $ 1 | [1] | $ 1,752 | $ 4,647 | $ (2,709) | $ 94 | [2] | ||||||||||||
Beginning balance, shares at Mar. 30, 2013 | 123.5 | [1] | 32.6 | |||||||||||||||||
Comprehensive Income | ||||||||||||||||||||
Net income | 776 | 776 | ||||||||||||||||||
Other comprehensive income (loss) | 20 | 20 | ||||||||||||||||||
Total comprehensive income | 796 | |||||||||||||||||||
Dividends declared | (153) | (153) | ||||||||||||||||||
Repurchases of common stock | (558) | 50 | [3] | $ (608) | ||||||||||||||||
Repurchases of common stock, shares | 3.6 | |||||||||||||||||||
Stock-based compensation | 93 | 93 | ||||||||||||||||||
Shares issued and tax benefits recognized pursuant to stock-based compensation plans | [4] | 86 | $ 0 | 86 | ||||||||||||||||
Shares issued and tax benefits recognized pursuant to stock-based compensation plans, shares | 1.4 | |||||||||||||||||||
Conversion of stock-based compensation awards | [5] | (15) | (2) | (13) | ||||||||||||||||
Ending balance at Mar. 29, 2014 | 4,034 | $ 1 | [1] | 1,979 | 5,257 | $ (3,317) | 114 | [2] | ||||||||||||
Ending balance, shares at Mar. 29, 2014 | 124.9 | [1] | 36.2 | |||||||||||||||||
Comprehensive Income | ||||||||||||||||||||
Net income | 702 | 702 | ||||||||||||||||||
Other comprehensive income (loss) | (279) | (279) | ||||||||||||||||||
Total comprehensive income | 423 | |||||||||||||||||||
Dividends declared | (161) | (161) | ||||||||||||||||||
Repurchases of common stock | (532) | $ (532) | ||||||||||||||||||
Repurchases of common stock, shares | 3.4 | |||||||||||||||||||
Stock-based compensation | 81 | 81 | ||||||||||||||||||
Shares issued and tax benefits recognized pursuant to stock-based compensation plans | [4] | 60 | $ 0 | 60 | ||||||||||||||||
Shares issued and tax benefits recognized pursuant to stock-based compensation plans, shares | 1.0 | |||||||||||||||||||
Conversion of stock-based compensation awards | [5] | (14) | (3) | (11) | ||||||||||||||||
Ending balance at Mar. 28, 2015 | 3,891 | $ 1 | [1] | 2,117 | 5,787 | $ (3,849) | (165) | [2] | ||||||||||||
Ending balance, shares at Mar. 28, 2015 | 125.9 | [1] | 39.6 | |||||||||||||||||
Comprehensive Income | ||||||||||||||||||||
Net income | 396 | 396 | ||||||||||||||||||
Other comprehensive income (loss) | (16) | (16) | ||||||||||||||||||
Total comprehensive income | 380 | |||||||||||||||||||
Dividends declared | (168) | (168) | ||||||||||||||||||
Repurchases of common stock | (500) | $ (500) | ||||||||||||||||||
Repurchases of common stock, shares | 4.4 | |||||||||||||||||||
Stock-based compensation | 97 | 97 | ||||||||||||||||||
Shares issued and tax benefits recognized pursuant to stock-based compensation plans | [4] | 44 | $ 0 | 44 | ||||||||||||||||
Shares issued and tax benefits recognized pursuant to stock-based compensation plans, shares | 1.0 | |||||||||||||||||||
Ending balance at Apr. 02, 2016 | $ 3,744 | $ 1 | [1] | $ 2,258 | $ 6,015 | $ (4,349) | $ (181) | [2] | ||||||||||||
Ending balance, shares at Apr. 02, 2016 | 126.9 | [1] | 44.0 | |||||||||||||||||
|
Consolidated Statements of Equity (Parenthetical) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 30, 2013 |
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Treasury Stock, Value, Acquired, Cost Method | $ 500 | $ 532 | $ 558 | |
Federal, state and local tax benefits from stock-compensation arrangements | $ 10 | $ 8 | $ 34 | |
Prepaid Repurchase Program [Member] | ||||
Treasury Stock, Value, Acquired, Cost Method | $ 50 | |||
Lauren Family L.L.C. [Member] | ||||
Number of Class B common shares converted to Class A common shares | 1.0 | |||
Mr. Ralph Lauren [Member] | ||||
Number of Class B common shares converted to Class A common shares | 3.0 |
Description of Business |
12 Months Ended |
---|---|
Apr. 02, 2016 | |
Description of Business [Abstract] | |
Description of Business | Description of Business Ralph Lauren Corporation ("RLC") is a global leader in the design, marketing, and distribution of premium lifestyle products, including apparel, accessories, home furnishings, and other licensed product categories. RLC's long-standing reputation and distinctive image have been consistently developed across an expanding number of products, brands, sales channels, and international markets. RLC's brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, Denim & Supply Ralph Lauren, Chaps, Club Monaco, and American Living, among others. RLC and its subsidiaries are collectively referred to herein as the "Company," "we," "us," "our," and "ourselves," unless the context indicates otherwise. The Company classifies its businesses into three segments: Wholesale, Retail, and Licensing. The Company's wholesale sales are made principally to major department stores and specialty stores around the world. The Company also sells directly to consumers through its integrated retail channel, which includes its retail stores, concession-based shop-within-shops, and e-commerce operations around the world. In addition, the Company licenses to unrelated third parties for specified periods the right to operate retail stores and/or to use its various trademarks in connection with the manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings. |
Basis of Presentation |
12 Months Ended |
---|---|
Apr. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Consolidation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") and present the consolidated financial position, income, comprehensive income, and cash flows of the Company, including all entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Fiscal Year The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year 2016 ended on April 2, 2016 and was a 53-week period ("Fiscal 2016"). Fiscal year 2015 ended on March 28, 2015 and was a 52-week period ("Fiscal 2015"). Fiscal year 2014 ended on March 29, 2014 and was also a 52-week period ("Fiscal 2014"). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include reserves for bad debt, customer returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; fair value measurements; accounting for income taxes and related uncertain tax positions; valuation of stock-based compensation awards and related estimated forfeiture rates; reserves for restructuring activity; and accounting for business combinations, among others. Reclassifications Certain reclassifications have been made to the prior periods' financial information in order to conform to the current period's presentation. |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Revenue Recognition Revenue is recognized across all segments of the business when there is persuasive evidence of an arrangement, delivery has occurred, the price has been fixed or is determinable, and collectability is reasonably assured. Revenue within the Company's Wholesale segment is recognized at the time title passes and risk of loss is transferred to customers. Wholesale revenue is recorded net of estimates of returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances. Returns and allowances require pre-approval from management and discounts are based on trade terms. Estimates for end-of-season markdown reserves are based on historical trends, actual and forecasted seasonal results, an evaluation of current economic and market conditions, retailer performance, and, in certain cases, contractual terms. Estimates for operational chargebacks are based on actual customer notifications of order fulfillment discrepancies and historical trends. The Company reviews and refines these estimates on at least a quarterly basis. The Company's historical estimates of these costs have not differed materially from actual results. Retail store and concession-based shop-within-shop revenue is recognized net of estimated returns at the time of sale to consumers. E-commerce revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery of the shipment to its customers. Such revenue is also reduced by an estimate of returns. Gift cards issued by the Company are recorded as a liability until they are redeemed, at which point revenue is recognized. The Company recognizes income for unredeemed gift cards when the likelihood of redemption by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Revenue from licensing arrangements is recognized when earned in accordance with the terms of the underlying agreements, generally based upon the higher of (i) contractually guaranteed minimum royalty levels or (ii) actual sales and royalty data, or estimates thereof, received from the Company's licensees. The Company accounts for sales taxes and other related taxes on a net basis, excluding such taxes from revenue. Cost of Goods Sold and Selling Expenses Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and import costs, as well as changes in reserves for shrinkage and inventory realizability. Gains and losses associated with forward foreign currency exchange contracts that are designated as cash flow hedges of inventory transactions are also recognized within cost of goods sold when the hedged inventory is sold. The costs of selling merchandise, including those associated with preparing merchandise for sale, such as picking, packing, warehousing, and order charges ("handling costs"), are included in selling, general, and administrative ("SG&A") expenses in the consolidated statements of income. Shipping and Handling Costs The costs associated with shipping goods to customers are reflected as a component of SG&A expenses in the consolidated statements of income. Shipping costs were approximately $45 million, $43 million, and $37 million in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Handling costs (described above), also included within SG&A expenses, were approximately $181 million in each of Fiscal 2016 and Fiscal 2015, and approximately $179 million in Fiscal 2014. Shipping and handling costs billed to customers are included in revenue. Advertising and Marketing Costs Advertising costs, including the costs to produce advertising, are expensed when the advertisement is first exhibited. Out-of-store advertising costs paid to wholesale customers under cooperative advertising programs are expensed as an advertising cost within SG&A expenses if both the identified advertising benefit is sufficiently separable from the purchase of the Company's products by customers and the fair value of such benefit is measurable. Otherwise, such costs are reflected as a reduction of revenue. Costs of in-store advertising paid to wholesale customers under cooperative advertising programs are not included in advertising costs, but rather are reflected as a reduction of revenue since the benefits are not sufficiently separable from the purchases of the Company's products by customers. Costs associated with the marketing and promotion of the Company's products are included within SG&A expenses. Advertising and marketing expenses amounted to approximately $280 million, $275 million, and $256 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Deferred advertising, marketing, and promotional costs, which principally relate to advertisements that have not yet been exhibited or services that have not yet been received, were approximately $7 million at the end of both Fiscal 2016 and Fiscal 2015, and were recorded within prepaid expenses and other current assets in the Company's consolidated balance sheets. Foreign Currency Translation and Transactions The financial position and operating results of the Company's foreign operations are primarily consolidated using their respective local currency as the functional currency. Local currency assets and liabilities are translated to U.S. Dollars at the rates of exchange in effect on the balance sheet date, and local currency revenues and expenses are translated to U.S. Dollars at average rates of exchange in effect during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive income as a component of other comprehensive income (loss) ("OCI") and in the consolidated statements of equity within accumulated other comprehensive income (loss) ("AOCI"). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included within this component of equity. The Company also recognizes gains and losses on both third-party and intercompany transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses are recognized in earnings and separately disclosed in the consolidated statements of income. Comprehensive Income (Loss) Comprehensive income (loss), which is reported in the consolidated statements of comprehensive income and consolidated statements of equity, consists of net income and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income. The components of OCI for the Company consist of foreign currency translation gains (losses); net realized and unrealized gains (losses) on cash flow hedges, such as forward foreign currency exchange contracts; net realized and unrealized gains (losses) on available-for-sale investments; and net realized and unrealized gains (losses) related to the Company's defined benefit plans. Net Income per Common Share Basic net income per common share is computed by dividing net income attributable to common shares by the weighted-average number of common shares outstanding during the period. Weighted-average common shares include shares of the Company's Class A and Class B common stock. Diluted net income per common share adjusts basic net income per common share for the dilutive effects of outstanding stock options, restricted stock, restricted stock units ("RSUs"), and any other potentially dilutive instruments, only in the periods in which such effects are dilutive under the treasury stock method. The weighted-average number of common shares outstanding used to calculate basic net income per common share is reconciled to shares used to calculate diluted net income per common share as follows:
All earnings per share amounts have been calculated using unrounded numbers. Options to purchase shares of the Company's Class A common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income per common share. In addition, the Company has outstanding RSUs that are issuable only upon the achievement of certain service and/or performance goals. Performance-based RSUs are included in the computation of diluted shares only to the extent that the underlying performance conditions (and any applicable market condition modifiers) (i) have been satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. As of the end of Fiscal 2016, Fiscal 2015, and Fiscal 2014, there were approximately 2.6 million, 1.9 million, and 1.2 million, respectively, additional shares issuable upon exercise of anti-dilutive options and contingent vesting of performance-based RSUs, which were excluded from the diluted share calculations. Stock-Based Compensation The Company recognizes expense for all stock-based compensation awards granted to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation model to estimate the grant date fair value of its stock option awards. For performance-based RSU awards that include a market condition in the form of a total shareholder return ("TSR") modifier, the Company uses a Monte Carlo simulation valuation model to estimate the grant date fair value. The fair values of restricted stock awards, service-based RSUs, and performance-based RSUs that are not subject to a TSR modifier are determined based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for those awards that are not entitled to dividend equivalents. Compensation expense for all performance-based RSUs is recognized over the requisite service period when attainment of the performance goal is deemed probable, net of estimated forfeitures. The Company recognizes compensation expense on an accelerated basis for all awards with graded vesting terms, including stock options, restricted stock, and certain RSUs. For RSU awards with cliff vesting terms, compensation expense is recognized on a straight-line basis. For certain RSU awards granted to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, the related stock-based compensation expense is recognized on an accelerated basis over a term commensurate with the period that the employee is required to provide service in order to vest in the award. See Note 19 for further discussion of the Company's stock-based compensation plans. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less, including investments in debt securities and money market funds. Investments in debt securities are diversified among high-credit quality securities in accordance with the Company's risk-management policies. Restricted Cash The Company is periodically required to place cash in escrow with various banks as collateral, primarily to secure guarantees of corresponding amounts made by the banks to international tax authorities on behalf of the Company, such as to secure refunds of value-added tax payments in certain international tax jurisdictions or in the case of certain international tax audits. Such cash is classified as restricted cash and reported as a component of either prepaid expenses and other current assets or other non-current assets in the Company's consolidated balance sheets. The cash inflows and outflows related to restricted cash are classified as investing activities in the Company's consolidated statements of cash flows. Investments The Company's 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 the Company's investment policy. Short-term investments consist of investments which the Company expects to convert into cash within one year, including time deposits, which have original maturities greater than 90 days. Non-current investments, which are classified within other non-current assets in the consolidated balance sheets, consist of those investments which the Company does not expect to convert into cash within one year. The Company classifies all of its investments at the time of purchase as available-for-sale. These investments are recorded at fair value with unrealized gains or losses classified as a component of AOCI in the consolidated balance sheets, and related realized gains or losses classified as a component of interest and other income, net, in the consolidated statements of income. Cash inflows and outflows related to the sale and purchase of investments are classified as investing activities in the Company's consolidated statements of cash flows. Equity-method Investments Investments in companies in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the investee. Under the equity method of accounting, the following amounts are recorded in the Company's consolidated financial statements: the Company's investment in and amounts due to and from the investee are included in the consolidated balance sheets; the Company's share of the investee's earnings (losses) is included in the consolidated statements of income; and dividends, cash distributions, loans, or other cash received from the investee and additional cash investments, loan repayments, or other cash paid to the investee are included in the consolidated statements of cash flows. The Company's equity-method investments include its 50% interest in the Ralph Lauren Watch and Jewelry Company, Sárl (the "RL Watch Company"), a joint venture formed with Compagnie Financière Richemont SA ("Richemont"), the Swiss luxury goods group, in March 2007. This joint venture is a Swiss corporation whose purpose is to design, develop, manufacture, sell, and distribute luxury watches and fine jewelry through Ralph Lauren stores, as well as through fine independent jewelry and luxury watch retailers around the world. Royalty payments due to the Company under the related license agreement for use of certain of its trademarks are reflected as licensing revenue within the consolidated statements of income. Impairment Assessment The Company evaluates investments held in unrealized loss positions, if any, for other-than-temporary impairment on a quarterly basis. Such evaluation involves a variety of considerations, including assessments of the risks and uncertainties associated with general economic conditions and distinct conditions affecting specific issuers. Factors considered by the Company include (i) the length of time and the extent to which the fair value has been below cost; (ii) the financial condition, credit worthiness, and near-term prospects of the issuer; (iii) the length of time to maturity; (iv) future economic conditions and market forecasts; (v) the Company's intent and ability to retain its investment for a period of time sufficient to allow for recovery of market value; and (vi) an assessment of whether it is more likely than not that the Company will be required to sell its investment before recovery of market value. See Note 15 for further information relating to the Company's investments. Accounts Receivable In the normal course of business, the Company extends credit to wholesale customers that satisfy defined credit criteria. Accounts receivable is recorded at carrying value, which approximates fair value, and is presented in the Company's consolidated balance sheets net of certain reserves and allowances. These reserves and allowances consist of (i) reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances (see the Revenue Recognition section above for further discussion of related accounting policies) and (ii) allowances for doubtful accounts. A rollforward of the activity in the Company's reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances is presented below:
An allowance for doubtful accounts is determined through analysis of periodic aging of accounts receivable, assessments of collectability based on an evaluation of historical and anticipated trends, the financial condition of the Company's customers, and an evaluation of the impact of economic conditions, among other factors. A rollforward of the activity in the Company's allowance for doubtful accounts is presented below:
Concentration of Credit Risk The Company sells its wholesale merchandise primarily to major department and specialty stores around the world, and extends credit based on an evaluation of each customer's financial capacity and condition, usually without requiring collateral. In the Company's wholesale business, concentration of credit risk is relatively limited due to the large number of customers and their dispersion across many geographic areas. However, the Company has three key wholesale customers that generate significant sales volume. During Fiscal 2016, the Company's sales to its largest wholesale customer, Macy's, Inc. ("Macy's"), accounted for approximately 11% of total net revenues, and the Company's sales to its three largest wholesale customers (including Macy's) accounted for approximately 24% of total net revenues. As of April 2, 2016, these three key wholesale customers constituted approximately 36% of total gross accounts receivable. Inventories The Company holds inventory that is sold through wholesale distribution channels to major department stores and specialty retail stores. The Company also holds retail inventory that is sold in its own stores and e-commerce sites directly to consumers. Substantially all of the Company's inventories are comprised of finished goods, which are stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis. The estimated realizable value of inventory is determined based on an analysis of historical sales trends of the Company's individual product lines, the impact of market trends and economic conditions, and a forecast of future demand, giving consideration to the value of current in-house orders for future sales of inventory, as well as plans to sell inventory through the Company's factory stores, among other liquidation channels. Actual results may differ from estimates due to the quantity, quality, and mix of products in inventory, consumer and retailer preferences, and market conditions. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. The Company's historical estimates of these costs and its related provisions have not differed materially from actual results. Property and Equipment, Net Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method based upon the estimated useful lives of depreciable assets, which range from three to seven years for furniture and fixtures, machinery and equipment, and capitalized software; and from ten to forty years for buildings and improvements. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the respective assets or the term of the related lease. Property and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangibles as described below, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan for disposal are reported at the lower of carrying value or fair value, less costs to sell. Goodwill and Other Intangible Assets At acquisition, the Company estimates and records the fair value of purchased intangible assets, which typically consist of reacquired license agreements, customer relationships, non-compete agreements, and/or order backlog. The fair values of these intangible assets are estimated based on management's assessment, considering independent third-party appraisals when necessary. The excess of the purchase consideration over the fair value of net assets acquired, both tangible and intangible, is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives are not amortized. Rather, goodwill and such indefinite-lived intangible assets are assessed for impairment at least annually. The Company generally performs its annual goodwill and indefinite-lived intangible assets impairment analyses using a qualitative approach to determine whether it is more likely than not that the fair values of such assets are less than their respective carrying values. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of the asset exceeds its carrying value, a quantitative test is performed. Under the quantitative test, if the carrying value of the asset exceeds its fair value, an impairment loss is recognized in the amount of the excess. The Company also periodically performs a quantitative test to assess its goodwill for impairment in lieu of using the qualitative approach in order to reassess the fair values of its reporting units. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets as noted above, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. See discussion of the Company's accounting policy for long-lived asset impairment as previously described under the caption "Property and Equipment, Net." Income Taxes Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable, and tax expense) are recorded based on amounts refundable or payable in the current year and include the results of any difference between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of certain net operating losses, capital losses, general business credit carryforwards, and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment. In addition, 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 and adjusted as events occur or circumstances change that warrant adjustments. In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company's estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) the statute of limitations expires; or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the provision for income taxes in the Company's consolidated statements of income and are classified on the consolidated balance sheets together with the related liability for unrecognized tax benefits. See Note 12 for further discussion of the Company's income taxes. Leases The Company leases certain facilities and equipment, including the vast majority of its retail stores. Certain of the Company's lease agreements contain renewal options, rent escalation clauses, and/or landlord incentives. Renewal terms generally reflect market rates at the time of renewal. Rent expense for noncancelable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term, including any applicable rent holidays, beginning on the earlier of the lease commencement date or the date the Company takes control of the leased space. The excess of straight-line rent expense over the scheduled payment amounts and landlord incentives is recorded as a deferred rent obligation. As of the end of Fiscal 2016 and Fiscal 2015, deferred rent obligations of approximately $257 million and $251 million, respectively, were classified primarily within other non-current liabilities in the Company's consolidated balance sheets. In certain lease arrangements, the Company is involved with the construction of the building or leasehold improvements (generally on property owned by the landlord). If the Company concludes that it has substantively all of the risks of ownership during construction of a leased property and therefore is deemed the owner of the project for accounting purposes, it records an asset and related financing obligation in the amount of the total project costs related to construction-in-progress and the fair value of the pre-existing building. Once construction is complete, the Company considers the requirements for sale-leaseback treatment, including the transfer back of all risks of ownership and whether the Company has any continuing involvement in the leased property. If the arrangement does not qualify for sale-leaseback treatment, the Company continues to amortize the financing obligation and depreciate the building over the lease term. Derivative Financial Instruments The Company records all derivative financial instruments on its consolidated balance sheets at fair value. For derivative instruments that qualify for hedge accounting, the effective portion of changes in their fair value is either (i) offset against the changes in fair value of the related hedged assets, liabilities, or firm commitments through earnings or (ii) recognized in equity as a component of AOCI until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge against changes in fair value or cash flows and net investments, respectively. Each derivative instrument that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. For each derivative instrument that is designated as a hedge, the Company formally documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item, and the risk exposure, as well as how hedge effectiveness will be assessed prospectively and retrospectively over the instrument's term. To assess hedge effectiveness, the Company generally uses regression analysis, a statistical method, to compare the change in the fair value of the derivative instrument to the change in fair value or cash flows of the related hedged item. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis. As a result of its use of derivative instruments, the Company is exposed to the risk that counterparties to such contracts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings and certain other factors, adhering to established limits for credit exposure. The Company's established policies and procedures for mitigating credit risk from derivative transactions include ongoing review and assessment of its counterparties' creditworthiness. The Company also enters into master netting arrangements with counterparties, when possible, to mitigate credit risk associated with its derivative instruments. In the event of default or termination (as such terms are defined within the respective master netting arrangement), these arrangements allow the Company to net-settle amounts payable and receivable related to multiple derivative transactions with the same counterparty. The master netting arrangements specify a number of events of default and termination, including, among others, the failure to make timely payments. The fair values of the Company's derivative instruments are recorded on its consolidated balance sheets on a gross basis. For cash flow reporting purposes, proceeds received or amounts paid upon the settlement of a derivative instrument are classified in the same manner as the related item being hedged, primarily within cash flows from operating activities. Cash Flow Hedges The Company enters into forward foreign currency exchange contracts to reduce its risk related to exchange rate fluctuations on inventory transactions, intercompany royalty payments made by certain of its international operations, and other foreign currency-denominated operational cash flows. To the extent forward foreign currency exchange contracts are designated as cash flow hedges and are highly effective in offsetting changes in the value of the hedged items, the related gains or losses are initially deferred in equity as a component of AOCI and are subsequently recognized in the consolidated statements of income as follows:
To the extent that a derivative instrument designated as a cash flow hedge is not considered effective, any change in its fair value relating to such ineffectiveness is immediately recognized in earnings within foreign currency gains (losses). If it is determined that a derivative instrument has not been highly effective, and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are immediately recognized in earnings within foreign currency gains (losses). Upon discontinuance of hedge accounting, the cumulative change in fair value of the derivative instrument previously recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the originally-documented hedging strategy, unless the forecasted transaction is no longer probable of occurring, in which case the accumulated amount is immediately recognized in earnings within foreign currency gains (losses). Hedge of a Net Investment in a Foreign Operation Changes in the fair value of a derivative instrument or the carrying value of a non-derivative instrument that is designated as a hedge of a net investment in a foreign operation are reported in the same manner as a translation adjustment, to the extent it is effective. In assessing the effectiveness of a derivative financial instrument that is designated as a hedge of a net investment, the Company uses a method based on changes in spot rates to measure the impact of foreign currency exchange rate changes on both its foreign subsidiary net investment and the related hedging instrument. If the notional amount of the instrument designated as the hedge of a net investment is greater than the portion of the net investment being hedged, hedge ineffectiveness is recognized immediately in earnings within foreign currency gains (losses). To the extent the instrument remains effective, changes in its value are recorded in equity as foreign currency translation gains (losses), a component of AOCI, and are recognized in earnings within foreign currency gains (losses) only upon the sale or liquidation of the hedged net investment. Fair Value Hedges Changes in the fair value of a derivative instrument that is designated as a fair value hedge, along with offsetting changes in the fair value of the related hedged item attributable to the hedged risk, are recorded in earnings. Hedge ineffectiveness is recorded in earnings to the extent that the change in the fair value of the hedged item does not offset the change in the fair value of the hedging instrument. Undesignated Hedges All of the Company's undesignated hedges are entered into to hedge specific economic risks, particularly foreign currency exchange rate risk related to foreign currency-denominated balances. Changes in the fair value of undesignated derivative instruments are immediately recognized in earnings within foreign currency gains (losses). See Note 15 for further discussion of the Company's derivative financial instruments. |
Recently Issued Accounting Standards |
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Apr. 02, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Improvements to Employee Share-Based Payment Accounting In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). ASU 2016-09 simplifies several aspects related to how share-based payments are accounted for and presented in the financial statements, including the accounting for forfeitures and tax-effects related to share-based payments at settlement, and the classification of excess tax benefits and shares surrendered for tax withholdings in the statement of cash flows. ASU 2016-09 is effective for the Company beginning in its fiscal year 2018, with early adoption permitted. The adoption methodology (i.e., prospective, retrospective, or modified-retrospective) varies by amendment. The Company is currently in the process of evaluating the impact that ASU 2016-09 will have on its consolidated financial statements and related disclosures. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires that, among other changes to current practice, a lessee's rights and obligations under almost all leases, including existing and new arrangements, be recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. ASU 2016-02 is effective for the Company beginning in its fiscal year 2020, with early adoption permitted, and must be adopted using a modified retrospective approach which requires application of the guidance at the beginning of the earliest comparative period presented. The Company is currently in the process of evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase to its long-term assets and liabilities. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"). ASU 2015-17 requires entities to classify all deferred tax asset and liability balances, together with any related valuation allowance, as non-current on the consolidated balance sheet. ASU 2015-07 simplifies past guidance, which required entities to present deferred tax asset and liability balances as current and non-current on the consolidated balance sheet. The Company early-adopted ASU 2015-17 as of the end of its Fiscal 2016 and applied its provisions prospectively (see Note 12). As a result, the prior period was not retrospectively adjusted. Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 provides a single, comprehensive accounting model for revenues arising from contracts with customers that will supersede most existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue is recognized at an amount that an entity expects to be entitled to upon transferring control of goods or services to a customer, as opposed to when risks and rewards transfer to a customer under existing revenue recognition guidance. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers — Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 is effective for the Company beginning in its fiscal year 2019. The FASB also recently issued additional ASUs to amend and clarify certain topics within ASU 2014-09. ASU 2014-09 may be applied retrospectively to all prior periods presented or through a cumulative adjustment to the opening retained earnings balance in the year of adoption. The Company is currently in the process of evaluating the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures. |
Acquisitions |
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Acquisitions | Acquisitions Australia and New Zealand Licensed Operations Acquisition On July 1, 2013, in connection with the transition of the Ralph Lauren-branded apparel and accessories business in Australia and New Zealand (the "Australia and New Zealand Business") from a licensed to a wholly-owned operation, the Company acquired certain net assets from Oroton Group/PRL Australia ("Oroton") in exchange for an aggregate payment of approximately $15 million (the "Australia and New Zealand Licensed Operations Acquisition"). Oroton was the Company's licensee for the Australia and New Zealand Business. The Company funded the Australia and New Zealand Licensed Operations Acquisition with available cash on-hand. The Company accounted for the Australia and New Zealand Licensed Operations Acquisition as a business combination during the second quarter of Fiscal 2014, with the operating results of the Australia and New Zealand Business consolidated into the Company's operating results beginning on July 1, 2013. Transaction costs associated with the Australia and New Zealand Licensed Operations Acquisition were not material. The acquisition cost of $15 million was allocated to the assets acquired and liabilities assumed based on an assessment of their respective fair values, as follows (in millions):
The customer relationship intangible asset was valued using the excess earnings method, which discounts the estimated after-tax cash flows associated with the existing base of customers as of the acquisition date, factoring in expected attrition of the existing customer base. The customer relationship intangible asset is being amortized over an estimated useful life of nine years. Chaps Menswear License Acquisition On April 10, 2013, in connection with the transition of the North American Chaps-branded men's sportswear business ("Chaps Menswear Business") from a licensed to a wholly-owned operation, the Company entered into an agreement with The Warnaco Group, Inc. ("Warnaco"), a subsidiary of PVH Corp. ("PVH"), to acquire certain net assets in exchange for an aggregate payment of approximately $18 million (the "Chaps Menswear License Acquisition"). Warnaco was the Company's licensee for the Chaps Menswear Business. The Company funded the Chaps Menswear License Acquisition during the first quarter of Fiscal 2014 with available cash on-hand. The Company accounted for the Chaps Menswear License Acquisition as a business combination during the first quarter of Fiscal 2014. The acquisition cost was allocated to the assets acquired and liabilities assumed based on an assessment of their respective fair values, as follows (in millions):
The licensed trademark intangible asset was valued using the excess earnings method, discounting the estimated after-tax cash flows associated with the Chaps-branded men's sportswear licensed trademark as of the acquisition date, factoring in market participant-based operating and cash flow assumptions. The reacquired licensed trademark intangible asset was amortized over a nine-month period through December 31, 2013, representing the remaining term of the prior license agreement that was terminated in connection with this acquisition. The operating results of the Chaps Menswear Business have been consolidated into the Company's operating results beginning on April 10, 2013. Transaction costs of $3 million were expensed as incurred and classified within SG&A expenses in the consolidated statement of income during Fiscal 2014. |
Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, net consists of the following:
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following table details the changes in goodwill for each of the Company's reportable segments during Fiscal 2016 and Fiscal 2015:
Based on the results of the Company's annual goodwill impairment testing in Fiscal 2016, Fiscal 2015, and Fiscal 2014, no impairment charges were recorded. Other Intangible Assets Other intangible assets consist of the following:
Amortization Based on the balance of the Company's intangible assets subject to amortization as of April 2, 2016, the expected amortization expense for each of the next five fiscal years and thereafter is as follows:
The expected future amortization expense above reflects weighted-average estimated useful lives of 13.5 years for re-acquired licensed trademarks, 9.4 years for customer relationships, and 11.5 years for the Company's finite-lived intangible assets in total. |
Other Current and Non-Current Assets |
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Other Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current and Non-Current Assets | Other Current and Non-Current Assets Prepaid expenses and other current assets consist of the following:
Other non-current assets consist of the following:
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Other Current and Non-Current Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities and Non-Current Liabilities | Other Current and Non-Current Liabilities Accrued expenses and other current liabilities consist of the following:
Other non-current liabilities consist of the following:
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Impairments of Assets |
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Apr. 02, 2016 | |
Asset Impairment Charges [Abstract] | |
Impairments of Assets | Impairments of Assets During Fiscal 2016, the Company recorded non-cash impairment charges of $49 million to write off certain fixed assets related to its domestic and international stores and shop-within-shops, of which $27 million was recorded in connection with the Global Reorganization Plan (see Note 11) and $22 million was recorded in connection with underperforming stores subject to potential future closure. During Fiscal 2015, the Company recorded non-cash impairment charges of $7 million, primarily to write off certain fixed assets related to its domestic and international retail stores. During Fiscal 2014, the Company recorded non-cash impairment charges of $1 million, primarily to write off certain fixed assets related to its European operations. |
Restructuring and Other Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Charges | Restructuring and Other Charges A description of significant restructuring and other activities and related costs is included below. Fiscal 2016 Global Reorganization Plan On May 12, 2015, the Company's Board of Directors approved a reorganization and restructuring plan comprised of the following major actions: (i) the reorganization of the Company from its historical channel and regional structure to an integrated global brand-based operating structure, which will streamline the Company's business processes to better align its cost structure with its long-term growth strategy; (ii) a strategic store and shop-within-shop performance review conducted by region and brand; (iii) a targeted corporate functional area review; and (iv) the consolidation of certain of the Company's luxury lines (collectively, the "Global Reorganization Plan"). Actions associated with the Global Reorganization Plan were substantially completed during Fiscal 2016 and resulted in a reduction in workforce and the closure of certain stores and shop-within-shops. A summary of the charges recorded in connection with the Global Reorganization Plan during Fiscal 2016 is as follows:
The Company expects to incur additional charges of approximately $5 million during its fiscal year ending April 1, 2017 ("Fiscal 2017") in connection with the Global Reorganization Plan, consisting primarily of cash-related severance and benefit costs. In addition, the Company continues to develop and work towards finalizing its strategic growth plan for Fiscal 2017 and beyond, which once completed will likely result in additional restructuring activities and related charges. A summary of the activity in the restructuring reserve related to the Global Reorganization Plan is as follows:
Other Charges During Fiscal 2016, the Company recorded other charges of $34 million related to its pending customs audit (see Note 16) and $14 million primarily related to the settlement of certain litigation claims. Fiscal 2015 During Fiscal 2015, the Company recorded restructuring charges of $10 million, primarily related to severance and benefit costs associated with certain of its retail, wholesale, and corporate operations. As of March 28, 2015, the related aggregate remaining restructuring liability was approximately $5 million. As of April 2, 2016, the related aggregate remaining restructuring liability was not material. Fiscal 2014 During Fiscal 2014, the Company recorded restructuring charges of $8 million, primarily related to severance and benefit costs associated with its corporate operations. As of both April 2, 2016 and March 28, 2015, the related aggregate remaining restructuring liability was not material. In addition, in connection with the formation of the Office of the Chairman, the Company entered into employment agreements with certain of its executive officers, which became effective in November 2013. As a result of the new employment agreement provisions, the Company recorded $10 million of accelerated stock-based compensation expense during Fiscal 2014. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Taxes on Income Domestic and foreign pretax income are as follows:
Provisions (benefits) for current and deferred income taxes are as follows:
Tax Rate Reconciliation The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and income taxes provided are as set forth below:
The Company's effective tax rate is lower than the statutory rate principally as a result of the proportion of earnings generated in lower taxed foreign jurisdictions versus the U.S. In addition, during Fiscal 2016, the effective tax rate was favorably impacted by tax benefits associated with provision to tax return adjustments, the reversal of certain tax liabilities due to the expiration of statues of limitations, and a change in estimate related to the assessment period of certain tax liabilities, as discussed below, partially offset by the reversal of certain deferred tax assets that were determined to not be realizable. The Company's effective tax rate during both Fiscal 2015 and Fiscal 2014 was favorably impacted by tax reserve reductions associated with income tax benefits resulting from the legal entity restructurings of certain of the Company's foreign operations. The Company's effective tax rate for Fiscal 2014 also reflected tax reserve reductions associated with the conclusion of a tax examination. During the second quarter of Fiscal 2016, the Company concluded, with the assistance of a third-party consultant, that based on recent audit settlements and taxpayer audit trends, the assessment period associated with certain tax liabilities established under ASC Topic 740, "Income Taxes," should be reduced. This change is considered a change in estimate for accounting purposes and the related impact was recorded during the second quarter of Fiscal 2016. This change lowered the Company's provision for income taxes by $8 million, including interest and penalties, and net of deferred tax asset reversals, and increased basic and diluted earnings per share by $0.09 for Fiscal 2016. Deferred Taxes The Company early-adopted ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" as of the end of its Fiscal 2016 and applied its provisions prospectively (see Note 4). As a result, the Company has classified all of its deferred tax assets and liabilities, together with any related valuation allowance, as non-current on the consolidated balance sheet as of April 2, 2016. The prior period was not retrospectively adjusted. Significant components of the Company's net deferred tax assets (liabilities) are as follows:
The Company has available state and foreign net operating loss carryforwards of $4 million and $71 million, respectively, for tax purposes to offset future taxable income. The net operating loss carryforwards expire beginning in Fiscal 2017. The Company also has available state and foreign net operating loss carryforwards of $7 million and $17 million, respectively, for which no net deferred tax asset has been recognized. A full valuation allowance has been recorded against these carryforwards since management does not believe that the Company will more likely than not be able to utilize these carryforwards to offset future taxable income. Subsequent recognition of these deferred tax assets would result in an income tax benefit in the year of such recognition. The valuation allowance relating to state net operating loss carryforwards remained consistent with the prior year. The valuation allowance relating to foreign net operating loss carryforwards increased by $6 million mainly as a result of additional net operating losses in certain jurisdictions where management does not believe that the Company will more likely than not be able to utilize these carryforwards in the future. Provision has not been made for U.S. or additional foreign taxes on $2.615 billion of undistributed earnings of foreign subsidiaries. Those historical earnings have been and are expected to continue to be permanently reinvested. These earnings could become subject to tax if they were remitted as dividends, if foreign earnings were lent to RLC, a subsidiary or a U.S. affiliate of RLC, or if the stock of the subsidiaries were sold. Determination of the amount of unrecognized deferred tax liability with respect to such earnings is not practicable. Management believes that the amount of the additional taxes that might be payable on the earnings of foreign subsidiaries, if remitted, would be partially offset by U.S. foreign tax credits. Uncertain Income Tax Benefits Fiscal 2016, Fiscal 2015, and Fiscal 2014 Activity Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2016, Fiscal 2015, and Fiscal 2014 are presented below:
The Company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. Reconciliations of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for Fiscal 2016, Fiscal 2015, and Fiscal 2014 are presented below:
The total amount of unrecognized tax benefits, including interest and penalties, was $81 million and $116 million as of April 2, 2016 and March 28, 2015, respectively, and is included within the non-current liability for unrecognized tax benefits in the consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate was $60 million and $85 million as of April 2, 2016 and March 28, 2015, respectively. Future Changes in Unrecognized Tax Benefits The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future. The Company files a consolidated U.S. federal income tax return, as well as tax returns in various state, local, and foreign jurisdictions. The Company is generally no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended April 1, 2006. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt consists of the following:
Senior Notes In September 2013, the Company completed a registered public debt offering and issued $300 million aggregate principal amount of unsecured senior notes due September 26, 2018, which bear interest at a fixed rate of 2.125%, payable semi-annually (the "2.125% Senior Notes"). The 2.125% Senior Notes were issued at a price equal to 99.896% of their principal amount. The proceeds from this offering were used for general corporate purposes, including repayment of the Company's previously outstanding €209 million principal amount of 4.5% Euro-denominated notes, which matured on October 4, 2013. In August 2015, the Company completed a second registered public debt offering and issued an additional $300 million aggregate principal amount of unsecured senior notes due August 18, 2020, which bear interest at a fixed rate of 2.625%, payable semi-annually (the "2.625% Senior Notes"). The 2.625% Senior Notes were issued at a price equal to 99.795% of their principal amount. The proceeds from this offering were used for general corporate purposes. The Company has the option to redeem the 2.125% Senior Notes and 2.625% Senior Notes (collectively, the "Senior Notes"), in whole or in part, at any time at a price equal to accrued and unpaid interest on the redemption date, plus the greater of (i) 100% of the principal amount of the series of Senior Notes to be redeemed or (ii) the sum of the present value of Remaining Scheduled Payments, as defined in the supplemental indentures governing such Senior Notes (together with the indenture governing the Senior Notes, the "Indenture"). The Indenture contains certain covenants that restrict the Company's ability, subject to specified exceptions, to incur certain liens; enter into sale and leaseback transactions; consolidate or merge with another party; or sell, lease, or convey all or substantially all of the Company's property or assets to another party. However, the Indenture does not contain any financial covenants. Commercial Paper In May 2014, the Company initiated a commercial paper borrowing program (the "Commercial Paper Program") that allowed it to issue up to $300 million of unsecured commercial paper notes through private placement using third-party broker-dealers. In May 2015, the Company expanded its Commercial Paper Program to allow for a total issuance of up to $500 million of unsecured commercial paper notes. Borrowings under the Commercial Paper Program are supported by the Global Credit Facility, as defined below, and may be used to support the Company's general working capital and corporate needs. Maturities of commercial paper notes vary, but cannot exceed 397 days from the date of issuance. Commercial paper notes issued under the Commercial Paper Program rank equally with the Company's other forms of unsecured indebtedness. As of April 2, 2016, the Company had $90 million in borrowings outstanding under its Commercial Paper Program, with a weighted-average annual interest rate of 0.41% and a weighted-average remaining term of 3 days. Revolving Credit Facilities Global Credit Facility In February 2015, the Company entered into an amended and restated credit facility (which was further amended in March 2016) that provides for a $500 million senior unsecured revolving line of credit through February 11, 2020 (the "Global Credit Facility") under terms and conditions substantially similar to those previously in effect. The Global Credit Facility is also used to support the issuance of letters of credit and the maintenance of the Commercial Paper Program. Borrowings under the Global Credit Facility may be denominated in U.S. Dollars and other currencies, including Euros, Hong Kong Dollars, and Japanese Yen. The Company has the ability to expand its borrowing availability under the Global Credit Facility to $750 million, subject to the agreement of one or more new or existing lenders under the facility to increase their commitments. There are no mandatory reductions in borrowing ability throughout the term of the Global Credit Facility. As of April 2, 2016, there were no borrowings outstanding under the Global Credit Facility and the Company was contingently liable for $9 million of outstanding letters of credit. U.S. Dollar-denominated borrowings under the Global Credit Facility bear interest, at the Company's option, either at (a) a base rate, by reference to the greatest of: (i) the annual prime commercial lending rate of JPMorgan Chase Bank, N.A. in effect from time to time, (ii) the weighted-average overnight Federal funds rate plus 50 basis points, or (iii) the one-month London Interbank Offered Rate ("LIBOR") plus 100 basis points; or (b) LIBOR, adjusted for the Federal Reserve Board's Eurocurrency liabilities maximum reserve percentage, plus a spread of 87.5 basis points, subject to adjustment based on the Company's credit ratings ("Adjusted LIBOR"). Foreign currency-denominated borrowings bear interest at Adjusted LIBOR. In addition to paying interest on any outstanding borrowings under the Global Credit Facility, the Company is required to pay a commitment fee to the lenders under the Global Credit Facility with respect to the unutilized commitments. The commitment fee rate of 7 basis points under the terms of the Global Credit Facility is subject to adjustment based on the Company's credit ratings. The Global Credit Facility contains a number of covenants that, among other things, restrict the Company's ability, subject to specified exceptions, to incur additional debt; incur liens; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve itself; engage in businesses that are not in a related line of business; make loans, advances, or guarantees; engage in transactions with affiliates; and make certain investments. The Global Credit Facility also requires the Company to maintain a maximum ratio of Adjusted Debt to Consolidated EBITDAR (the "leverage ratio") of no greater than 3.75 as of the date of measurement for the four most recent consecutive fiscal quarters. Adjusted Debt is defined generally as consolidated debt outstanding plus four times consolidated rent expense for the four most recent consecutive fiscal quarters. Consolidated EBITDAR is defined generally as consolidated net income plus (i) income tax expense, (ii) net interest expense, (iii) depreciation and amortization expense, (iv) consolidated rent expense, (v) restructuring and other non-recurring expenses, and (vi) acquisition-related costs. As of April 2, 2016, no Event of Default (as such term is defined pursuant to the Global Credit Facility) has occurred under the Company's Global Credit Facility. Upon the occurrence of an Event of Default under the Global Credit Facility, the lenders may cease making loans, terminate the Global Credit Facility, and declare all amounts outstanding to be immediately due and payable. The Global Credit Facility specifies a number of events of default (many of which are subject to applicable grace periods), including, among others, the failure to make timely principal, interest, and fee payments or to satisfy the covenants, including the financial covenant described above. Additionally, the Global Credit Facility provides that an Event of Default will occur if Mr. Ralph Lauren, the Company's Executive Chairman and Chief Creative Officer, and entities controlled by the Lauren family fail to maintain a specified minimum percentage of the voting power of the Company's common stock. Pan-Asia Credit Facilities Certain of the Company's subsidiaries in Asia have uncommitted credit facilities with regional branches of JPMorgan Chase (the "Banks") in China and South Korea (the "Pan-Asia Credit Facilities"). These credit facilities are subject to annual renewal and may be used to fund general working capital and corporate needs of the Company's operations in the respective countries. Borrowings under the Pan-Asia Credit Facilities are guaranteed by the parent company and are granted at the sole discretion of the Banks, subject to availability of the Banks' funds and satisfaction of certain regulatory requirements. The Pan-Asia Credit Facilities do not contain any financial covenants. The Company's Pan-Asia Credit Facilities by country are as follows:
As of April 2, 2016, borrowings outstanding under the Pan-Asia Credit Facilities were $26 million, which have been classified as short-term debt in the Company's consolidated balance sheet. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements U.S. GAAP establishes a three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy for a particular asset or liability depends on the inputs used in its valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally-derived (unobservable). A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:
The following table summarizes the Company's financial assets and liabilities that are measured and recorded at fair value on a recurring basis, excluding accrued interest components:
To the extent the Company invests in bonds, such investments are classified as available-for-sale and recorded at fair value in its consolidated balance sheets based upon quoted prices in active markets. The Company's derivative financial instruments are recorded at fair value in its consolidated balance sheets and are valued using pricing models that are primarily based on market observable external inputs, including spot and forward currency exchange rates, benchmark interest rates, and discount rates consistent with the instrument's tenor, and consider the impact of the Company's own credit risk, if any. Changes in counterparty credit risk are also considered in the valuation of derivative financial instruments. The Company's cash and cash equivalents, restricted cash, and time deposits are recorded at carrying value, which approximates fair value based on Level 1 measurements. The Company's debt instruments are recorded at their carrying values in its consolidated balance sheets, which may differ from their respective fair values. The fair values of the Senior Notes are estimated based on external pricing data, including available quoted market prices, and with reference to comparable debt instruments with similar interest rates, credit ratings, and trading frequency, among other factors. The fair values of the Company's commercial paper notes and borrowings outstanding under its credit facilities are estimated using external pricing data, based on interest rates and credit ratings for similar issuances with the same remaining term as the Company's outstanding borrowings. Due to their short-term nature, the fair values of the Company's commercial paper notes and borrowings outstanding under its credit facilities at April 2, 2016 approximate their carrying values. The following table summarizes the carrying values and the estimated fair values of the Company's debt instruments:
Unrealized gains or losses resulting from changes in the fair value of the Company's debt do not result in the realization or expenditure of cash, unless the debt is retired prior to its maturity. Non-financial Assets and Liabilities The Company's non-financial assets, which primarily consist of goodwill, other intangible assets, and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value, considering external market participant assumptions. During Fiscal 2016, Fiscal 2015, and Fiscal 2014, the Company recorded non-cash impairment charges to reduce the carrying values of certain long-lived store and shop-within-shop assets to their fair values. The fair values of these assets were determined based on Level 3 measurements. Inputs to these fair value measurements included estimates of the amount and timing of the stores' or shop-within-shops' net future discounted cash flows based on historical experience, current trends, and market conditions. The following table summarizes the impairment charges recorded during Fiscal 2016, Fiscal 2015, and Fiscal 2014:
No goodwill impairment charges have been recorded during any of the three fiscal years presented. In Fiscal 2016, the Company performed its annual goodwill impairment assessment as of the beginning of the second quarter of the fiscal year using a qualitative approach. In performing the assessment, the Company identified and considered the significance of relevant key factors, events, and circumstances that affected the fair values and/or carrying amounts of its reporting units. These factors included external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as the Company's actual and planned financial performance. Additionally, the results of the Company's most recent quantitative goodwill impairment test indicated that the fair values of its reporting units significantly exceeded their respective carrying values. Based on the results of its qualitative goodwill impairment assessment, the Company concluded that it is not more likely than not that the fair values of its reporting units are less than their respective carrying values, and there were no reporting units at risk of impairment. |
Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Derivative Financial Instruments The Company is exposed to changes in foreign currency exchange rates, primarily relating to certain anticipated cash flows and the value of the reported net assets of its international operations, as well as changes in the fair value of its fixed-rate debt attributed to changes in the benchmark interest rate. Consequently, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not enter into derivative transactions for speculative or trading purposes. The following table summarizes the Company's outstanding derivative instruments on a gross basis as recorded in its consolidated balance sheets as of April 2, 2016 and March 28, 2015:
The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, even though they are subject to master netting arrangements. However, if the Company were to offset and record the asset and liability balances of all of its derivative instruments on a net basis in accordance with the terms of each of its master netting arrangements, spread across eight separate counterparties, the amounts presented in the consolidated balance sheets as of April 2, 2016 and March 28, 2015 would be adjusted from the current gross presentation as detailed in the following table:
The Company's master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. Refer to Note 3 for further discussion of the Company's master netting arrangements. The following tables summarize the pretax impact of the effective portion of gains and losses from the Company's designated derivative instruments on its consolidated financial statements for the fiscal years presented:
During Fiscal 2014, the Company also recorded a foreign currency gain of $2 million associated with the discontinuance of certain cash flow hedges, as the related forecasted transactions were no longer probable of occurring. As of April 2, 2016, it is expected that approximately $13 million of net losses deferred in AOCI related to derivative instruments will be recognized in earnings over the next twelve months. No material gains or losses relating to ineffective cash flow hedges were recognized during any of the fiscal years presented. The following table summarizes the pretax impact of gains and losses from the Company's undesignated derivative instruments on its consolidated financial statements for the fiscal years presented:
Risk Management Strategies Forward Foreign Currency Exchange Contracts The Company enters into forward foreign currency exchange contracts to reduce its risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency, intercompany royalty payments made by certain of its international operations, and other foreign currency-denominated operational and intercompany balances and cash flows. As part of its overall strategy to manage the level of exposure to the risk of foreign currency exchange rate fluctuations, primarily to changes in the value of the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, and the Hong Kong Dollar, the Company hedges a portion of its foreign currency exposures anticipated over a two-year period. In doing so, the Company uses forward foreign currency exchange contracts that generally have maturities of two months to two years to provide continuing coverage throughout the hedging period. Interest Rate Swap Contracts During Fiscal 2016, the Company entered into two pay-floating rate, receive-fixed rate interest rate swap contracts which it designated as hedges against changes in the respective fair values of its fixed-rate 2.125% Senior Notes and its fixed-rate 2.625% Senior Notes attributed to changes in the benchmark interest rate (the "Interest Rate Swaps"). The Interest Rate Swaps, which mature on September 26, 2018 and August 18, 2020, respectively, both have notional amounts of $300 million and swap the fixed interest rates on the Company's 2.125% Senior Notes and 2.625% Senior Notes for variable interest rates based on 3-month LIBOR plus a fixed spread. Changes in the fair values of the Interest Rate Swaps were offset by changes in the respective fair values of the 2.125% Senior Notes and 2.625% Senior Notes attributed to changes in the benchmark interest rate, with no resulting ineffectiveness recognized in earnings during Fiscal 2016. Cross-Currency Swap Contracts During Fiscal 2016, the Company entered into two pay-floating rate, receive-floating rate cross-currency swap contracts, with notional amounts of €280 million and €274 million, which it designated as hedges of its net investment in certain of its European subsidiaries (the "Cross-Currency Swaps"). The Cross-Currency Swaps, which mature on September 26, 2018 and August 18, 2020, respectively, swap the U.S. Dollar-denominated variable interest rate payments based on 3-month LIBOR plus a fixed spread (as paid under the Interest Rate Swaps described above) for Euro-denominated variable interest rate payments based on the 3-month Euro Interbank Offered Rate plus a fixed spread. As a result, the Cross-Currency Swaps, in conjunction with the Interest Rate Swaps, economically convert the Company's $300 million fixed-rate 2.125% and $300 million fixed-rate 2.625% obligations to €280 million and €274 million floating-rate Euro-denominated liabilities, respectively. No material gains or losses related to the ineffective portion, or the amount excluded from effectiveness testing, were recognized in interest expense within the consolidated statement of income during Fiscal 2016. See Note 3 for further discussion of the Company's accounting policies relating to its derivative financial instruments. Investments As of April 2, 2016, the Company's short-term investments consisted of $621 million of time deposits and $8 million of non-U.S. corporate bonds, and its non-current investments consisted of $187 million of time deposits. As of March 28, 2015, the Company's short-term and non-current investments consisted of $644 million of time deposits and $8 million of non-U.S. corporate bonds, respectively. The Company's non-current investments as of both April 2, 2016 and March 28, 2015 have maturities of one to two years. No significant realized or unrealized gains or losses on available-for-sale investments or other-than-temporary impairment charges were recorded in any of the fiscal years presented. Refer to Note 18 for further detail. See Note 3 for further discussion of the Company's accounting policies relating to its investments. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Leases The Company operates most of its retail stores under various leasing arrangements. The Company also occupies various office and warehouse facilities and uses certain equipment under numerous lease agreements. Such leasing arrangements are accounted for as either operating leases or capital leases. In this context, capital leases include leases whereby the Company is considered to have the substantive risks of ownership during construction of a leased property. Information on the Company's operating and capital leasing activities is set forth below. Operating Leases The Company is typically required to make minimum rental payments, and often contingent rental payments, under its operating leases. Many of the Company's retail store leases provide for contingent rental payments based upon sales, and certain rental agreements require payment based solely on a percentage of sales. Terms of the Company's leases generally contain renewal options, rent escalation clauses, and landlord incentives. Rent expense, net of sublease income, was approximately $472 million, $466 million, and $455 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Such amounts include contingent rental charges of approximately $163 million, $172 million, and $176 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. In addition to such amounts, the Company is normally required to pay taxes, insurance, and certain occupancy costs relating to the leased real estate properties. As of April 2, 2016, future minimum rental payments under noncancelable operating leases with lease terms in excess of one year were as follows:
Capital Leases Assets under capital leases, including build-to-suit leases, amounted to approximately $278 million and $251 million at the end of Fiscal 2016 and Fiscal 2015, respectively, net of accumulated depreciation of approximately $53 million and $30 million, respectively. Such assets are classified within property and equipment, net in the consolidated balance sheets based on their nature. As of April 2, 2016, future minimum rental payments under noncancelable capital leases, including build-to-suit leases, with lease terms in excess of one year were as follows:
Employee Agreements The Company has employment agreements with certain executives in the normal course of business which provide for compensation and certain other benefits. These agreements also provide for severance payments under certain circumstances. Other Commitments Other off-balance sheet firm commitments amounted to approximately $1.151 billion as of April 2, 2016, including inventory purchase commitments of approximately $941 million, outstanding letters of credit of approximately $10 million, interest payments related to the Company's Senior Notes of approximately $51 million, and other commitments of approximately $149 million, comprised of the Company's legally-binding obligations under sponsorship, licensing, and other marketing and advertising agreements, distribution-related agreements, information technology-related service agreements, and pension-related obligations. Customs Audit In September 2014, one of the Company's international subsidiaries received a pre-assessment notice from the relevant customs officials concerning the method used to determine the dutiable value of imported inventory. The notice communicated the customs officials' assertion that the Company should have applied an alternative duty method, which could result in up to approximately $46 million in incremental duty and non-creditable value-added tax, including approximately $11 million in interest and penalties. The Company believes that the alternative duty method claimed by the customs officials is not applicable to the Company's facts and circumstances and is vigorously contesting their asserted methodology. In October 2014, the Company filed an appeal of the pre-assessment notice in accordance with the standard procedures established by the relevant customs authorities. In response to the filing of the Company's appeal of the pre-assessment notice, the review committee instructed the customs officials to reconsider their assertion of the alternative duty method and conduct a re-audit to evaluate the facts and circumstances noted in the pre-assessment notice. In December 2015, the Company received the results of the re-audit conducted and a customs audit assessment notice in the amount of approximately $34 million, which the Company recorded within restructuring and other charges in its consolidated statements of income during the third quarter of Fiscal 2016 (see Note 11). Although the Company disagrees with the assessment notice, in order to secure the Company's rights, the Company was required to pay the assessment amount and then subsequently file an appeal with the customs authorities. The Company continues to maintain its original filing position and will vigorously contest any other proposed methodology asserted by the customs officials. Should the Company be successful in its merits, a full refund for the amounts paid plus interest will be required to be paid by the customs authorities. If the Company is unsuccessful in its current appeal with the customs authorities, it may further appeal this decision within the courts. At this time, while the Company believes that the customs officials' claims are not meritorious and that the Company should prevail, the outcome of the appeals process is subject to risk and uncertainty. Other Matters The Company is involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to its business, including, among other things, matters involving credit card fraud, trademark and other intellectual property, licensing, importation and exportation of its products, taxation, unclaimed property, and employee relations. The Company believes at present that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on its consolidated financial statements. However, the Company's assessment of the current litigation or other legal claims could potentially change in light of the discovery of facts not presently known or determinations by judges, juries, or other finders of fact which are not in accord with management's evaluation of the possible liability or outcome of such litigation or claims. In the normal course of business, the Company enters into agreements that provide general indemnifications. The Company has not made any significant indemnification payments under such agreements in the past, and does not currently anticipate incurring any material indemnification payments. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Capital Stock The Company's capital stock consists of two classes of common stock. There are 500 million shares of Class A common stock and 100 million shares of Class B common stock authorized to be issued. Shares of Class A and Class B common stock have substantially identical rights, except with respect to voting rights. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Holders of both classes of stock vote together as a single class on all matters presented to the stockholders for their approval, except with respect to the election and removal of directors or as otherwise required by applicable law. All outstanding shares of Class B common stock are owned by Mr. Ralph Lauren, the Company's Executive Chairman and Chief Creative Officer, and entities controlled by the Lauren family, and are convertible at any time into shares of Class A common stock on a one-for-one basis. Class B Common Stock Conversions During Fiscal 2015, the Lauren Family, L.L.C., a limited liability company managed by the children of Mr. R. Lauren, converted 1.0 million shares of Class B common stock into an equal number of shares of Class A common stock pursuant to the terms of the security, which were subsequently sold on the open market as part of a pre-determined, systematic trading plan. During Fiscal 2014, Mr. R. Lauren converted 3.0 million shares of Class B common stock into an equal number of shares of Class A common stock pursuant to the terms of the security, which were subsequently sold in a block trade. These transactions resulted in reclassifications within equity, and had no other effect on the Company's consolidated balance sheets. Common Stock Repurchase Program A summary of the Company's repurchases of Class A common stock under its common stock repurchase program is as follows:
As of April 2, 2016, the remaining availability under the Company's Class A common stock repurchase program was approximately $100 million. On May 11, 2016, the Company's Board of Directors approved an expansion of the program that allows it to repurchase up to an additional $200 million of Class A common stock. Repurchases of shares of Class A common stock are subject to overall business and market conditions. In addition, during Fiscal 2016, Fiscal 2015, and Fiscal 2014, 0.2 million, 0.2 million, and 0.4 million shares of Class A common stock, respectively, at a cost of $20 million, $32 million, and $60 million, respectively, were surrendered to, or withheld by, the Company in satisfaction of withholding taxes in connection with the vesting of awards under the Company's 1997 Long-Term Stock Incentive Plan, as amended (the "1997 Incentive Plan"), and its Amended and Restated 2010 Long-Term Stock Incentive Plan (the "2010 Incentive Plan"). Repurchased and surrendered shares are accounted for as treasury stock at cost and held in treasury for future use. Dividends Since 2003, the Company has maintained a regular quarterly cash dividend program on its common stock. On November 5, 2013, the Company's Board of Directors approved an increase to the Company's quarterly cash dividend on its common stock from $0.40 per share to $0.45 per share. On February 3, 2015, the Company's Board of Directors approved a further increase to the Company's quarterly cash dividend on its common stock from $0.45 per share to $0.50 per share. Dividends paid amounted to $170 million, $158 million, and $149 million in Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Conversion of Stock-based Compensation Awards During Fiscal 2015, in connection with employment agreements with certain of its executive officers, the Company converted certain fully-vested and expensed stock-based compensation awards to a cash contribution into a deferred compensation account. Additionally, in connection with the formation of the Office of the Chairman, the Company entered into employment agreements with certain of its executive officers, which became effective during Fiscal 2014, and converted certain fully-vested and expensed stock-based compensation awards to a cash contribution into a deferred compensation account. The Company recorded the excess of both these awards' then current redemption values over their original grant-date fair values to retained earnings, with a corresponding increase to other non-current liabilities in the consolidated balance sheet. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table presents OCI activity, net of tax, which is accumulated in equity:
The following table presents reclassifications from AOCI to earnings for cash flow hedges, by component:
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Stock-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation Long-term Stock Incentive Plans The Company's stock-based compensation awards are currently issued under the 2010 Incentive Plan, which was approved by its stockholders on August 5, 2010. However, any prior awards granted under the 1997 Incentive Plan remain subject to the terms of that plan. Any awards that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes are available for issuance under the 2010 Incentive Plan. On September 24, 2013, the Company registered with the SEC an additional 1.7 million shares of its Class A common stock for issuance pursuant to the 2010 Incentive Plan. As of April 2, 2016, 2.5 million shares remained available for future issuance under the Company's incentive plans. Stock-based compensation awards that may be made under the 2010 Incentive Plan include, but are not limited to, (i) stock options, (ii) restricted stock, and (iii) RSUs. In recent years, the Company's annual grants of stock-based compensation awards to its employees primarily consisted of stock options and RSUs. However, in Fiscal 2016, the annual grants consisted entirely of RSUs, as the Company elected to issue service-based RSUs in lieu of stock options. Additionally, new vesting provisions for certain awards granted to retirement-eligible employees were introduced. Specifically, beginning in Fiscal 2016, for certain service-based and performance-based RSUs granted to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, vesting continues post-retirement for all or a portion of the remaining unvested RSUs. Impact on Results A summary of the total expense and the associated income tax benefits recognized related to stock-based compensation arrangements is as follows:
Stock Options Stock options are granted to employees and non-employee directors with exercise prices equal to the fair market value of the Company's Class A common stock on the date of grant. Generally, options become exercisable ratably (graded-vesting schedule) over a three-year vesting period, subject to the employee's continuing employment. Stock options generally expire seven years from the date of grant. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted, which requires the input of both subjective and objective assumptions including the following: Expected Term — The estimate of expected term is based on the historical exercise behavior of employees and non-employee directors, as well as the contractual life of the option grants. Expected Volatility — The expected volatility factor is based on the historical volatility of the Company's Class A common stock for a period equal to the stock option's expected term. Expected Dividend Yield — The expected dividend yield is based on the Company's quarterly cash dividend rate in effect on the date of grant. Risk-free Interest Rate — The risk-free interest rate is determined using the implied yield for a traded zero-coupon U.S. Treasury bond with a term equal to the option's expected term. The Company's weighted average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows:
A summary of stock option activity during Fiscal 2016 is as follows:
Additional information pertaining to the Company's stock option plans is as follows:
As of April 2, 2016, there was $5 million of total unrecognized compensation expense related to nonvested stock options expected to be recognized over a weighted-average period of one year. Restricted Stock Awards and Service-based RSUs Restricted shares granted to non-employee directors vest ratably over a three-year period, subject to the director's continued service to the Company. The fair values of restricted stock awards are based on the fair value of the Company's Class A common stock on the date of grant. Holders of restricted shares are entitled to receive cash dividends in connection with the payments of dividends on the Company's Class A common stock. Service-based RSUs granted to certain of the Company's senior executives, as well as certain of its other employees, generally vest over a three-year period, subject to the employee's continuing employment (except for awards granted in Fiscal 2016 to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed). The fair values of service-based RSUs are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards not entitled to accrue dividend equivalents while outstanding. A summary of restricted stock and service-based RSU activity during Fiscal 2016 is as follows:
Additional information pertaining to restricted stock and service-based RSU activity is as follows:
Performance-based RSUs The Company grants performance-based RSUs to senior executives and other key executives, as well as certain of its other employees. Performance-based RSUs generally vest (i) upon the completion of a three-year period of time (cliff vesting), subject to the employee's continuing employment (except for awards granted in Fiscal 2016 to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed) and the Company's achievement of certain performance goals established at the beginning of the three-year performance period or (ii) ratably, over a three-year period of time (graded vesting), subject to the employee's continuing employment during the applicable vesting period (except for awards granted in Fiscal 2016 to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, as previously discussed) and the achievement by the Company of certain performance goals in the initial year of the three-year vesting period. For performance-based RSUs subject to cliff vesting, the number of shares that may be earned ranges between 0% (if the specified threshold performance level is not attained) and 150% (if performance meets or exceeds the maximum achievement level) of the awards originally granted. If actual performance exceeds the pre-established threshold, the number of shares earned is calculated based on the relative performance between specified levels of achievement. Certain of the cliff vesting performance-based RSU awards granted by the Company, in addition to being subject to continuing employment requirements and the Company's performance goals noted above, are also subject to a market condition in the form of a total shareholder return ("TSR") modifier. The actual number of shares that vest at the end of the respective three-year period is determined based on the Company's achievement of the three-year performance goals described above, as well as its TSR relative to the S&P 500 over the related three-year performance period. At the end of the three-year performance period, if the performance condition is achieved at or above the pre-established threshold, the number of shares earned is further adjusted by a TSR modifier payout percentage, which ranges between 75% and 125%, based on the Company's TSR performance relative to that of the S&P 500 index over the respective three-year period. Depending on the total level of achievement, the actual number of shares that vest for performance-based RSU awards with a TSR modifier may range from 0% to 187.5% of the awards originally granted. The fair value of the Company's performance-based RSUs that are not subject to a TSR modifier is based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for those securities that are not entitled to dividend equivalents. The fair value of the Company's performance-based RSUs with a TSR modifier is determined on the date of grant using a Monte Carlo simulation valuation model. This pricing model uses multiple simulations to evaluate the probability of the Company achieving various stock price levels to determine its expected TSR performance ranking. The weighted-average assumptions used to estimate the fair value of performance-based RSUs with a TSR modifier granted during the fiscal years presented were as follows:
A summary of performance-based RSUs without TSR Modifier and performance-based RSUs with TSR Modifier activity during Fiscal 2016 is as follows:
Additional information pertaining to performance-based RSUs without TSR Modifier and performance-based RSUs with TSR Modifier activity is as follows:
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Employee Benefit Plans |
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Apr. 02, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Profit Sharing Retirement Savings Plans The Company sponsors defined contribution benefit plans covering substantially all eligible employees in the U.S. and Puerto Rico who are not covered by a collective bargaining agreement. The plans include a savings plan feature under Section 401(k) of the Internal Revenue Code. The Company makes matching contributions to the plans equal to 50% of the first 6% of salary contributed by an eligible employee. Additionally, the Company makes a supplemental matching contribution for plan years in which the Company achieves a "stretch" or a "maximum" performance target based on certain goals established at the beginning of each fiscal year, increasing the matching contribution to 75% or 100%, respectively, of the first 6% of salary contributed by eligible employees, not to exceed the maximum contribution permitted by the plan. Under the terms of the plans, a participant becomes 100% vested in the Company's matching contributions after five years of credited service. Contributions made by the Company under these plans were $11 million in each of Fiscal 2016 and Fiscal 2015, and $10 million in Fiscal 2014. International Defined Benefit Plans The Company sponsors certain single-employer defined benefit plans and cash balance plans at international locations which are not considered to be material individually or in the aggregate to the Company's financial statements. Pension benefits under these plans are based on formulas that reflect the employees' years of service and compensation levels during their employment period. The aggregate funded status of the single-employer defined benefit plans reflected net liabilities of $5 million and $8 million as of April 2, 2016 and March 28, 2015, respectively, and were primarily recorded within other non-current liabilities in the Company's consolidated balance sheets. These single-employer defined benefit plans had aggregate projected benefit obligations of $65 million and aggregate fair values of plan assets of $60 million as of April 2, 2016, compared to aggregate projected benefit obligations of $60 million and aggregate fair values of plan assets of $52 million as of March 28, 2015. The asset portfolio of the single-employer defined benefit plans primarily consists of fixed income securities, which have been measured at fair value largely using Level 2 inputs, as described in Note 14. Pension expense for these plans, recorded within SG&A expenses in the Company's consolidated statements of income, was $6 million in Fiscal 2016 and $5 million in each of Fiscal 2015 and Fiscal 2014. Union Pension Plan The Company participates in a multi-employer pension plan and is required to make contributions to the Workers United union (which was previously known as UNITE HERE) (the "Union") for dues based on wages paid to union employees. A portion of these dues is allocated by the Union to a retirement fund which provides defined benefits to substantially all unionized workers. The Company does not participate in the management of the plan and has not been furnished with information with respect to the type of benefits provided, vested and non-vested benefits, or assets. Under the Employee Retirement Income Security Act of 1974, as amended, an employer, upon withdrawal from or termination of a multi-employer plan, is required to continue funding its proportionate share of the plan's unfunded vested benefits. Such liability was assumed in conjunction with the acquisition of certain assets from a non-affiliated licensee. The Company has no current intention of withdrawing from the plan. Other Compensation Plans The Company had a non-qualified supplemental retirement plan for certain highly compensated employees whose benefits under the 401(k) profit sharing retirement savings plans were expected to be constrained by the operation of Internal Revenue Code limitations. These supplemental benefits vested over time and the related compensation expense was recognized over the vesting period. Effective August 2008, the Company amended this plan, resulting in a suspension of the annual contributions for substantially all plan participants. Further, affected participants were provided with a one-time election to either withdraw all benefits vested in the plan in a lump sum amount or remain in the plan and receive future distributions of benefits. As of April 2, 2016 and March 28, 2015, amounts accrued under this plan totaled approximately $8 million and $9 million, respectively, and were classified within other non-current liabilities in the consolidated balance sheets. Total compensation expense recognized related to these benefits was not material in any of the three fiscal years presented. Additionally, the Company has available deferred compensation arrangements for certain executives that are utilized from time to time and generally provide for payments upon retirement, death, or termination of employment. The Company funds a portion of these obligations through the establishment of trust accounts on behalf of the executives participating in the plans. During Fiscal 2015, these plans were cash settled, inclusive of the cash contributions made during Fiscal 2015 and Fiscal 2014 related to the conversions of certain fully-vested and expensed stock-based compensation awards (see Note 17). Accordingly, there was no remaining amount accrued under these plans as of April 2, 2016 and March 28, 2015. Total compensation expense related to these compensation arrangements was not material in any of the three fiscal years presented. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company has three reportable segments based on its business activities and organization: Wholesale, Retail, and Licensing. These segments offer a variety of products through different channels of distribution. The Wholesale segment consists of apparel, accessories, home furnishings, and related products which are sold to major department stores, specialty stores, golf and pro shops, and the Company's licensed and franchised retail stores in the U.S. and overseas. The Retail segment consists of the Company's integrated worldwide retail operations, which sell products through its retail stores, concession-based shop-within-shops, and e-commerce sites, which are purchased from the Company's licensees and suppliers. The Licensing segment generates revenues from royalties earned on the sale of the Company's apparel, home, and other products internationally and domestically through licensing alliances. The licensing agreements grant the licensees rights to use the Company's various trademarks in connection with the manufacture and sale of designated products in specified geographical areas for specified periods. The accounting policies of the Company's segments are consistent with those described in Notes 2 and 3. Sales and transfers between segments are generally recorded at cost and treated as transfers of inventory. All intercompany revenues, including such sales between segments, are eliminated in consolidation and are not reviewed when evaluating segment performance. Each segment's performance is evaluated based upon operating income before restructuring charges and certain other one-time items, such as legal charges, if any. Certain corporate overhead expenses related to global functions, most notably the Company's executive office, information technology, finance and accounting, human resources, and legal departments, largely remain at corporate. Additionally, other costs that cannot be allocated to the segments based on specific usage are also maintained at corporate, including corporate advertising and marketing expenses, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects. Net revenues for each of the Company's reportable segments are as follows:
Operating income for each of the Company's reportable segments is as follows:
The following tables summarize the Company's depreciation and amortization expense and capital expenditures for each of its reportable segments:
The following table summarizes total assets for each of the Company's reportable segments:
Net revenues and long-lived assets by geographic location of the reporting subsidiary are as follows:
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Additional Financial Information |
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Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Financial Information | Additional Financial Information Cash Interest and Taxes Cash paid for interest and income taxes is as follows:
Non-cash Transactions Non-cash investing activities included capital expenditures incurred but not yet paid of $65 million, $62 million, and $45 million as of the end of Fiscal 2016, Fiscal 2015, and Fiscal 2014, respectively. Additionally, during Fiscal 2016, the Company recorded capital lease assets and corresponding capital lease obligations of $49 million within its consolidated balance sheet. During Fiscal 2014, the Company recorded a capital lease asset and a corresponding capital lease obligation of $230 million within its consolidated balance sheet in connection with the lease for the Polo flagship store in New York City (see Note 16). Non-cash investing activities in Fiscal 2015 also included the capitalization of a fixed asset, for which a $19 million non-binding advance payment was made during Fiscal 2014 and recorded within prepaid expenses and other current assets as of March 29, 2014. There were no other significant non-cash investing or financing activities for any of the fiscal years presented. |
Summary of Significant Accounting Policies (Policies) |
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Apr. 02, 2016 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Consolidation | Basis of Consolidation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") and present the consolidated financial position, income, comprehensive income, and cash flows of the Company, including all entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
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Fiscal Year | Fiscal Year The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year 2016 ended on April 2, 2016 and was a 53-week period ("Fiscal 2016"). Fiscal year 2015 ended on March 28, 2015 and was a 52-week period ("Fiscal 2015"). Fiscal year 2014 ended on March 29, 2014 and was also a 52-week period ("Fiscal 2014"). |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include reserves for bad debt, customer returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; fair value measurements; accounting for income taxes and related uncertain tax positions; valuation of stock-based compensation awards and related estimated forfeiture rates; reserves for restructuring activity; and accounting for business combinations, among others. |
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Reclassifications | Reclassifications Certain reclassifications have been made to the prior periods' financial information in order to conform to the current period's presentation. |
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Revenue Recognition | Revenue Recognition Revenue is recognized across all segments of the business when there is persuasive evidence of an arrangement, delivery has occurred, the price has been fixed or is determinable, and collectability is reasonably assured. Revenue within the Company's Wholesale segment is recognized at the time title passes and risk of loss is transferred to customers. Wholesale revenue is recorded net of estimates of returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances. Returns and allowances require pre-approval from management and discounts are based on trade terms. Estimates for end-of-season markdown reserves are based on historical trends, actual and forecasted seasonal results, an evaluation of current economic and market conditions, retailer performance, and, in certain cases, contractual terms. Estimates for operational chargebacks are based on actual customer notifications of order fulfillment discrepancies and historical trends. The Company reviews and refines these estimates on at least a quarterly basis. The Company's historical estimates of these costs have not differed materially from actual results. Retail store and concession-based shop-within-shop revenue is recognized net of estimated returns at the time of sale to consumers. E-commerce revenue from sales of products ordered through the Company's e-commerce sites is recognized upon delivery of the shipment to its customers. Such revenue is also reduced by an estimate of returns. Gift cards issued by the Company are recorded as a liability until they are redeemed, at which point revenue is recognized. The Company recognizes income for unredeemed gift cards when the likelihood of redemption by a customer is remote and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Revenue from licensing arrangements is recognized when earned in accordance with the terms of the underlying agreements, generally based upon the higher of (i) contractually guaranteed minimum royalty levels or (ii) actual sales and royalty data, or estimates thereof, received from the Company's licensees. The Company accounts for sales taxes and other related taxes on a net basis, excluding such taxes from revenue. |
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Cost of Goods Sold and Selling Expenses | Cost of Goods Sold and Selling Expenses Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and import costs, as well as changes in reserves for shrinkage and inventory realizability. Gains and losses associated with forward foreign currency exchange contracts that are designated as cash flow hedges of inventory transactions are also recognized within cost of goods sold when the hedged inventory is sold. The costs of selling merchandise, including those associated with preparing merchandise for sale, such as picking, packing, warehousing, and order charges ("handling costs"), are included in selling, general, and administrative ("SG&A") expenses in the consolidated statements of income. |
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Shipping and Handling Costs | Shipping and Handling Costs The costs associated with shipping goods to customers are reflected as a component of SG&A expenses in the consolidated statements of income. Shipping costs were approximately $45 million, $43 million, and $37 million in Fiscal 2016, Fiscal 2015 and Fiscal 2014, respectively. Handling costs (described above), also included within SG&A expenses, were approximately $181 million in each of Fiscal 2016 and Fiscal 2015, and approximately $179 million in Fiscal 2014. Shipping and handling costs billed to customers are included in revenue. |
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Advertising and Marketing Costs | Advertising and Marketing Costs Advertising costs, including the costs to produce advertising, are expensed when the advertisement is first exhibited. Out-of-store advertising costs paid to wholesale customers under cooperative advertising programs are expensed as an advertising cost within SG&A expenses if both the identified advertising benefit is sufficiently separable from the purchase of the Company's products by customers and the fair value of such benefit is measurable. Otherwise, such costs are reflected as a reduction of revenue. Costs of in-store advertising paid to wholesale customers under cooperative advertising programs are not included in advertising costs, but rather are reflected as a reduction of revenue since the benefits are not sufficiently separable from the purchases of the Company's products by customers. Costs associated with the marketing and promotion of the Company's products are included within SG&A expenses. |
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Foreign Currency Translations and Transactions | Foreign Currency Translation and Transactions The financial position and operating results of the Company's foreign operations are primarily consolidated using their respective local currency as the functional currency. Local currency assets and liabilities are translated to U.S. Dollars at the rates of exchange in effect on the balance sheet date, and local currency revenues and expenses are translated to U.S. Dollars at average rates of exchange in effect during the period. The resulting translation gains or losses are included in the consolidated statements of comprehensive income as a component of other comprehensive income (loss) ("OCI") and in the consolidated statements of equity within accumulated other comprehensive income (loss) ("AOCI"). Gains and losses on the translation of intercompany loans made to foreign subsidiaries that are of a long-term investment nature are also included within this component of equity. The Company also recognizes gains and losses on both third-party and intercompany transactions that are denominated in a currency other than the respective entity's functional currency. Foreign currency transaction gains and losses are recognized in earnings and separately disclosed in the consolidated statements of income. |
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Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss), which is reported in the consolidated statements of comprehensive income and consolidated statements of equity, consists of net income and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income. The components of OCI for the Company consist of foreign currency translation gains (losses); net realized and unrealized gains (losses) on cash flow hedges, such as forward foreign currency exchange contracts; net realized and unrealized gains (losses) on available-for-sale investments; and net realized and unrealized gains (losses) related to the Company's defined benefit plans. |
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Net Income per Common Share | Net Income per Common Share Basic net income per common share is computed by dividing net income attributable to common shares by the weighted-average number of common shares outstanding during the period. Weighted-average common shares include shares of the Company's Class A and Class B common stock. Diluted net income per common share adjusts basic net income per common share for the dilutive effects of outstanding stock options, restricted stock, restricted stock units ("RSUs"), and any other potentially dilutive instruments, only in the periods in which such effects are dilutive under the treasury stock method. Options to purchase shares of the Company's Class A common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income per common share. In addition, the Company has outstanding RSUs that are issuable only upon the achievement of certain service and/or performance goals. Performance-based RSUs are included in the computation of diluted shares only to the extent that the underlying performance conditions (and any applicable market condition modifiers) (i) have been satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. |
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Stock-Based Compensation | Stock-Based Compensation The Company recognizes expense for all stock-based compensation awards granted to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures. The Company uses the Black-Scholes valuation model to estimate the grant date fair value of its stock option awards. For performance-based RSU awards that include a market condition in the form of a total shareholder return ("TSR") modifier, the Company uses a Monte Carlo simulation valuation model to estimate the grant date fair value. The fair values of restricted stock awards, service-based RSUs, and performance-based RSUs that are not subject to a TSR modifier are determined based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for those awards that are not entitled to dividend equivalents. Compensation expense for all performance-based RSUs is recognized over the requisite service period when attainment of the performance goal is deemed probable, net of estimated forfeitures. The Company recognizes compensation expense on an accelerated basis for all awards with graded vesting terms, including stock options, restricted stock, and certain RSUs. For RSU awards with cliff vesting terms, compensation expense is recognized on a straight-line basis. For certain RSU awards granted to retirement-eligible employees, or employees who will become retirement-eligible prior to the end of the awards' respective stated vesting periods, the related stock-based compensation expense is recognized on an accelerated basis over a term commensurate with the period that the employee is required to provide service in order to vest in the award. See Note 19 for further discussion of the Company's stock-based compensation plans. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of 90 days or less, including investments in debt securities and money market funds. Investments in debt securities are diversified among high-credit quality securities in accordance with the Company's risk-management policies. |
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Restricted Cash | Restricted Cash The Company is periodically required to place cash in escrow with various banks as collateral, primarily to secure guarantees of corresponding amounts made by the banks to international tax authorities on behalf of the Company, such as to secure refunds of value-added tax payments in certain international tax jurisdictions or in the case of certain international tax audits. Such cash is classified as restricted cash and reported as a component of either prepaid expenses and other current assets or other non-current assets in the Company's consolidated balance sheets. The cash inflows and outflows related to restricted cash are classified as investing activities in the Company's consolidated statements of cash flows. |
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Investments | Investments The Company's 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 the Company's investment policy. Short-term investments consist of investments which the Company expects to convert into cash within one year, including time deposits, which have original maturities greater than 90 days. Non-current investments, which are classified within other non-current assets in the consolidated balance sheets, consist of those investments which the Company does not expect to convert into cash within one year. The Company classifies all of its investments at the time of purchase as available-for-sale. These investments are recorded at fair value with unrealized gains or losses classified as a component of AOCI in the consolidated balance sheets, and related realized gains or losses classified as a component of interest and other income, net, in the consolidated statements of income. Cash inflows and outflows related to the sale and purchase of investments are classified as investing activities in the Company's consolidated statements of cash flows. Equity-method Investments Investments in companies in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the investee. Under the equity method of accounting, the following amounts are recorded in the Company's consolidated financial statements: the Company's investment in and amounts due to and from the investee are included in the consolidated balance sheets; the Company's share of the investee's earnings (losses) is included in the consolidated statements of income; and dividends, cash distributions, loans, or other cash received from the investee and additional cash investments, loan repayments, or other cash paid to the investee are included in the consolidated statements of cash flows. The Company's equity-method investments include its 50% interest in the Ralph Lauren Watch and Jewelry Company, Sárl (the "RL Watch Company"), a joint venture formed with Compagnie Financière Richemont SA ("Richemont"), the Swiss luxury goods group, in March 2007. This joint venture is a Swiss corporation whose purpose is to design, develop, manufacture, sell, and distribute luxury watches and fine jewelry through Ralph Lauren stores, as well as through fine independent jewelry and luxury watch retailers around the world. Royalty payments due to the Company under the related license agreement for use of certain of its trademarks are reflected as licensing revenue within the consolidated statements of income. Impairment Assessment The Company evaluates investments held in unrealized loss positions, if any, for other-than-temporary impairment on a quarterly basis. Such evaluation involves a variety of considerations, including assessments of the risks and uncertainties associated with general economic conditions and distinct conditions affecting specific issuers. Factors considered by the Company include (i) the length of time and the extent to which the fair value has been below cost; (ii) the financial condition, credit worthiness, and near-term prospects of the issuer; (iii) the length of time to maturity; (iv) future economic conditions and market forecasts; (v) the Company's intent and ability to retain its investment for a period of time sufficient to allow for recovery of market value; and (vi) an assessment of whether it is more likely than not that the Company will be required to sell its investment before recovery of market value. See Note 15 for further information relating to the Company's investments. |
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Accounts Receivable | Accounts Receivable In the normal course of business, the Company extends credit to wholesale customers that satisfy defined credit criteria. Accounts receivable is recorded at carrying value, which approximates fair value, and is presented in the Company's consolidated balance sheets net of certain reserves and allowances. These reserves and allowances consist of (i) reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances (see the Revenue Recognition section above for further discussion of related accounting policies) and (ii) allowances for doubtful accounts. An allowance for doubtful accounts is determined through analysis of periodic aging of accounts receivable, assessments of collectability based on an evaluation of historical and anticipated trends, the financial condition of the Company's customers, and an evaluation of the impact of economic conditions, among other factors. |
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Inventories | Inventories The Company holds inventory that is sold through wholesale distribution channels to major department stores and specialty retail stores. The Company also holds retail inventory that is sold in its own stores and e-commerce sites directly to consumers. Substantially all of the Company's inventories are comprised of finished goods, which are stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis. The estimated realizable value of inventory is determined based on an analysis of historical sales trends of the Company's individual product lines, the impact of market trends and economic conditions, and a forecast of future demand, giving consideration to the value of current in-house orders for future sales of inventory, as well as plans to sell inventory through the Company's factory stores, among other liquidation channels. Actual results may differ from estimates due to the quantity, quality, and mix of products in inventory, consumer and retailer preferences, and market conditions. Reserves for inventory shrinkage, representing the risk of physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. The Company's historical estimates of these costs and its related provisions have not differed materially from actual results. |
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Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method based upon the estimated useful lives of depreciable assets, which range from three to seven years for furniture and fixtures, machinery and equipment, and capitalized software; and from ten to forty years for buildings and improvements. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the respective assets or the term of the related lease. Property and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. In evaluating long-lived assets for recoverability, including finite-lived intangibles as described below, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan for disposal are reported at the lower of carrying value or fair value, less costs to sell. |
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets At acquisition, the Company estimates and records the fair value of purchased intangible assets, which typically consist of reacquired license agreements, customer relationships, non-compete agreements, and/or order backlog. The fair values of these intangible assets are estimated based on management's assessment, considering independent third-party appraisals when necessary. The excess of the purchase consideration over the fair value of net assets acquired, both tangible and intangible, is recorded as goodwill. Goodwill and certain other intangible assets deemed to have indefinite useful lives are not amortized. Rather, goodwill and such indefinite-lived intangible assets are assessed for impairment at least annually. The Company generally performs its annual goodwill and indefinite-lived intangible assets impairment analyses using a qualitative approach to determine whether it is more likely than not that the fair values of such assets are less than their respective carrying values. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of the asset exceeds its carrying value, a quantitative test is performed. Under the quantitative test, if the carrying value of the asset exceeds its fair value, an impairment loss is recognized in the amount of the excess. The Company also periodically performs a quantitative test to assess its goodwill for impairment in lieu of using the qualitative approach in order to reassess the fair values of its reporting units. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets as noted above, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. See discussion of the Company's accounting policy for long-lived asset impairment as previously described under the caption "Property and Equipment, Net." |
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Income Taxes | Income Taxes Income taxes are provided using the asset and liability method. Under this method, income taxes (i.e., deferred tax assets and liabilities, current taxes payable/refunds receivable, and tax expense) are recorded based on amounts refundable or payable in the current year and include the results of any difference between U.S. GAAP and tax reporting. Deferred income taxes reflect the tax effect of certain net operating losses, capital losses, general business credit carryforwards, and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes, as determined under enacted tax laws and rates. The Company accounts for the financial effect of changes in tax laws or rates in the period of enactment. In addition, 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 and adjusted as events occur or circumstances change that warrant adjustments. In determining the income tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions. If the Company considers that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, it recognizes the tax benefit. The Company measures the tax benefit by determining the largest amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. These assessments can be complex and the Company often obtains assistance from external advisors. To the extent that the Company's estimates change or the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determinations are made. If the initial assessment fails to result in the recognition of a tax benefit, the Company regularly monitors its position and subsequently recognizes the tax benefit if (i) there are changes in tax law or analogous case law that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) the statute of limitations expires; or (iii) there is a completion of an audit resulting in a settlement of that tax year with the appropriate agency. Uncertain tax positions are classified as current only when the Company expects to pay cash within the next twelve months. Interest and penalties, if any, are recorded within the provision for income taxes in the Company's consolidated statements of income and are classified on the consolidated balance sheets together with the related liability for unrecognized tax benefits. See Note 12 for further discussion of the Company's income taxes. |
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Leases | Leases The Company leases certain facilities and equipment, including the vast majority of its retail stores. Certain of the Company's lease agreements contain renewal options, rent escalation clauses, and/or landlord incentives. Renewal terms generally reflect market rates at the time of renewal. Rent expense for noncancelable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term, including any applicable rent holidays, beginning on the earlier of the lease commencement date or the date the Company takes control of the leased space. The excess of straight-line rent expense over the scheduled payment amounts and landlord incentives is recorded as a deferred rent obligation. As of the end of Fiscal 2016 and Fiscal 2015, deferred rent obligations of approximately $257 million and $251 million, respectively, were classified primarily within other non-current liabilities in the Company's consolidated balance sheets. In certain lease arrangements, the Company is involved with the construction of the building or leasehold improvements (generally on property owned by the landlord). If the Company concludes that it has substantively all of the risks of ownership during construction of a leased property and therefore is deemed the owner of the project for accounting purposes, it records an asset and related financing obligation in the amount of the total project costs related to construction-in-progress and the fair value of the pre-existing building. Once construction is complete, the Company considers the requirements for sale-leaseback treatment, including the transfer back of all risks of ownership and whether the Company has any continuing involvement in the leased property. If the arrangement does not qualify for sale-leaseback treatment, the Company continues to amortize the financing obligation and depreciate the building over the lease term. |
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Derivative Financial Instruments | Derivative Financial Instruments The Company records all derivative financial instruments on its consolidated balance sheets at fair value. For derivative instruments that qualify for hedge accounting, the effective portion of changes in their fair value is either (i) offset against the changes in fair value of the related hedged assets, liabilities, or firm commitments through earnings or (ii) recognized in equity as a component of AOCI until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge against changes in fair value or cash flows and net investments, respectively. Each derivative instrument that qualifies for hedge accounting is expected to be highly effective at reducing the risk associated with the exposure being hedged. For each derivative instrument that is designated as a hedge, the Company formally documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item, and the risk exposure, as well as how hedge effectiveness will be assessed prospectively and retrospectively over the instrument's term. To assess hedge effectiveness, the Company generally uses regression analysis, a statistical method, to compare the change in the fair value of the derivative instrument to the change in fair value or cash flows of the related hedged item. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed and documented by the Company on at least a quarterly basis. As a result of its use of derivative instruments, the Company is exposed to the risk that counterparties to such contracts will fail to meet their contractual obligations. To mitigate this counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings and certain other factors, adhering to established limits for credit exposure. The Company's established policies and procedures for mitigating credit risk from derivative transactions include ongoing review and assessment of its counterparties' creditworthiness. The Company also enters into master netting arrangements with counterparties, when possible, to mitigate credit risk associated with its derivative instruments. In the event of default or termination (as such terms are defined within the respective master netting arrangement), these arrangements allow the Company to net-settle amounts payable and receivable related to multiple derivative transactions with the same counterparty. The master netting arrangements specify a number of events of default and termination, including, among others, the failure to make timely payments. The fair values of the Company's derivative instruments are recorded on its consolidated balance sheets on a gross basis. For cash flow reporting purposes, proceeds received or amounts paid upon the settlement of a derivative instrument are classified in the same manner as the related item being hedged, primarily within cash flows from operating activities. Cash Flow Hedges The Company enters into forward foreign currency exchange contracts to reduce its risk related to exchange rate fluctuations on inventory transactions, intercompany royalty payments made by certain of its international operations, and other foreign currency-denominated operational cash flows. To the extent forward foreign currency exchange contracts are designated as cash flow hedges and are highly effective in offsetting changes in the value of the hedged items, the related gains or losses are initially deferred in equity as a component of AOCI and are subsequently recognized in the consolidated statements of income as follows:
To the extent that a derivative instrument designated as a cash flow hedge is not considered effective, any change in its fair value relating to such ineffectiveness is immediately recognized in earnings within foreign currency gains (losses). If it is determined that a derivative instrument has not been highly effective, and will continue not to be highly effective in hedging the designated exposure, hedge accounting is discontinued and further gains (losses) are immediately recognized in earnings within foreign currency gains (losses). Upon discontinuance of hedge accounting, the cumulative change in fair value of the derivative instrument previously recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the originally-documented hedging strategy, unless the forecasted transaction is no longer probable of occurring, in which case the accumulated amount is immediately recognized in earnings within foreign currency gains (losses). Hedge of a Net Investment in a Foreign Operation Changes in the fair value of a derivative instrument or the carrying value of a non-derivative instrument that is designated as a hedge of a net investment in a foreign operation are reported in the same manner as a translation adjustment, to the extent it is effective. In assessing the effectiveness of a derivative financial instrument that is designated as a hedge of a net investment, the Company uses a method based on changes in spot rates to measure the impact of foreign currency exchange rate changes on both its foreign subsidiary net investment and the related hedging instrument. If the notional amount of the instrument designated as the hedge of a net investment is greater than the portion of the net investment being hedged, hedge ineffectiveness is recognized immediately in earnings within foreign currency gains (losses). To the extent the instrument remains effective, changes in its value are recorded in equity as foreign currency translation gains (losses), a component of AOCI, and are recognized in earnings within foreign currency gains (losses) only upon the sale or liquidation of the hedged net investment. Fair Value Hedges Changes in the fair value of a derivative instrument that is designated as a fair value hedge, along with offsetting changes in the fair value of the related hedged item attributable to the hedged risk, are recorded in earnings. Hedge ineffectiveness is recorded in earnings to the extent that the change in the fair value of the hedged item does not offset the change in the fair value of the hedging instrument. Undesignated Hedges All of the Company's undesignated hedges are entered into to hedge specific economic risks, particularly foreign currency exchange rate risk related to foreign currency-denominated balances. Changes in the fair value of undesignated derivative instruments are immediately recognized in earnings within foreign currency gains (losses). See Note 15 for further discussion of the Company's derivative financial instruments. |
Summary of Significant Accounting Policies (Tables) |
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Summary of Significant Accounting Policies (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted shares | The weighted-average number of common shares outstanding used to calculate basic net income per common share is reconciled to shares used to calculate diluted net income per common share as follows:
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Sales Returns and Allowances [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of activity in the Company's allowance for doubtful accounts and its aggregate reserves for returns, discounts, end-of-season markdowns and operational chargebacks | A rollforward of the activity in the Company's reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances is presented below:
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Allowance for Doubtful Accounts [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of activity in the Company's allowance for doubtful accounts and its aggregate reserves for returns, discounts, end-of-season markdowns and operational chargebacks | A rollforward of the activity in the Company's allowance for doubtful accounts is presented below:
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Acquisitions (Tables) |
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Australia and New Zealand Licensed Operations Acquisition [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed | The acquisition cost of $15 million was allocated to the assets acquired and liabilities assumed based on an assessment of their respective fair values, as follows (in millions):
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Chaps Menswear License Acquisition [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed | The acquisition cost was allocated to the assets acquired and liabilities assumed based on an assessment of their respective fair values, as follows (in millions):
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | Property and equipment, net consists of the following:
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Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | The following table details the changes in goodwill for each of the Company's reportable segments during Fiscal 2016 and Fiscal 2015:
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Other Intangible Assets | Other intangible assets consist of the following:
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Amortization | Based on the balance of the Company's intangible assets subject to amortization as of April 2, 2016, the expected amortization expense for each of the next five fiscal years and thereafter is as follows:
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Other Current and Non-Current Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets, Current | Prepaid expenses and other current assets consist of the following:
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Schedule of Other Assets, Noncurrent | Other non-current assets consist of the following:
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Other Current and Non-Current Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following:
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Schedule of Non-Current Liabilities | Other non-current liabilities consist of the following:
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Restructuring and Other Charges (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | A summary of the charges recorded in connection with the Global Reorganization Plan during Fiscal 2016 is as follows:
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Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | A summary of the activity in the restructuring reserve related to the Global Reorganization Plan is as follows:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Domestic and foreign pretax income | Domestic and foreign pretax income are as follows:
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Provisions (benefits) for current and deferred income taxes | Provisions (benefits) for current and deferred income taxes are as follows:
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Tax rate reconciliation | The differences between income taxes expected at the U.S. federal statutory income tax rate of 35% and income taxes provided are as set forth below:
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Deferred taxes | Significant components of the Company's net deferred tax assets (liabilities) are as follows:
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Reconciliation of unrecognized tax benefits, excluding interest and penalties | Reconciliations of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties, for Fiscal 2016, Fiscal 2015, and Fiscal 2014 are presented below:
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Reconciliation of accrued interest and penalties related to unrecognized tax benefits | Reconciliations of the beginning and ending amounts of accrued interest and penalties related to unrecognized tax benefits for Fiscal 2016, Fiscal 2015, and Fiscal 2014 are presented below:
|
Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Instruments | Debt consists of the following:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial assets and liabilities measured and recorded at fair value on recurring basis | The following table summarizes the Company's financial assets and liabilities that are measured and recorded at fair value on a recurring basis, excluding accrued interest components:
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Carrying value and the estimated fair value of the Company's debt obligations | The following table summarizes the carrying values and the estimated fair values of the Company's debt instruments:
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Fair value measurements, nonrecurring | The following table summarizes the impairment charges recorded during Fiscal 2016, Fiscal 2015, and Fiscal 2014:
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Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's outstanding derivative instruments on a gross basis as recorded on its consolidated balance sheets | The following table summarizes the Company's outstanding derivative instruments on a gross basis as recorded in its consolidated balance sheets as of April 2, 2016 and March 28, 2015:
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Offsetting Assets | The Company records and presents the fair values of all of its derivative assets and liabilities in its consolidated balance sheets on a gross basis, even though they are subject to master netting arrangements. However, if the Company were to offset and record the asset and liability balances of all of its derivative instruments on a net basis in accordance with the terms of each of its master netting arrangements, spread across eight separate counterparties, the amounts presented in the consolidated balance sheets as of April 2, 2016 and March 28, 2015 would be adjusted from the current gross presentation as detailed in the following table:
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Gains (losses) recognized in AOCI and gains (losses) reclassified from AOCI to Earnings | The following tables summarize the pretax impact of the effective portion of gains and losses from the Company's designated derivative instruments on its consolidated financial statements for the fiscal years presented:
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Gains (losses) recognized in earnings from derivatives not designated as hedging instruments | The following table summarizes the pretax impact of gains and losses from the Company's undesignated derivative instruments on its consolidated financial statements for the fiscal years presented:
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum rental payments for operating leases | As of April 2, 2016, future minimum rental payments under noncancelable operating leases with lease terms in excess of one year were as follows:
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Schedule of future minimum lease payments for capital leases | As of April 2, 2016, future minimum rental payments under noncancelable capital leases, including build-to-suit leases, with lease terms in excess of one year were as follows:
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Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Repurchased Common Stock | A summary of the Company's repurchases of Class A common stock under its common stock repurchase program is as follows:
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Accumulated Other Comprehensive Income (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents OCI activity, net of tax, which is accumulated in equity:
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Reclassification out of Accumulated Other Comprehensive Income | The following table presents reclassifications from AOCI to earnings for cash flow hedges, by component:
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Stock-based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the total compensation expense and the associated income tax benefits recognized related to stock-based compensation arrangements | A summary of the total expense and the associated income tax benefits recognized related to stock-based compensation arrangements is as follows:
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Weighted average assumptions used to estimate the fair value of stock options granted | The Company's weighted average assumptions used to estimate the fair value of stock options granted during the fiscal years presented were as follows:
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Summary of the stock option activity under all plans | A summary of stock option activity during Fiscal 2016 is as follows:
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Additional information pertaining to the Company's stock option plans | Additional information pertaining to the Company's stock option plans is as follows:
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average assumptions used to estimate the fair value of performance-based RSUs with TSR modifier | The weighted-average assumptions used to estimate the fair value of performance-based RSUs with a TSR modifier granted during the fiscal years presented were as follows:
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Restricted stock and service-based restricted stock units [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted stock and restricted stock unit activity | A summary of restricted stock and service-based RSU activity during Fiscal 2016 is as follows:
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Additional information pertaining to the restricted stock and restricted stock unit activity |
Additional information pertaining to restricted stock and service-based RSU activity is as follows:
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Performance-based restricted stock units [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted stock and restricted stock unit activity | A summary of performance-based RSUs without TSR Modifier and performance-based RSUs with TSR Modifier activity during Fiscal 2016 is as follows:
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Additional information pertaining to the restricted stock and restricted stock unit activity |
Additional information pertaining to performance-based RSUs without TSR Modifier and performance-based RSUs with TSR Modifier activity is as follows:
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Segment Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues by segment | Net revenues for each of the Company's reportable segments are as follows:
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Net operating income by segment | Operating income for each of the Company's reportable segments is as follows:
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Depreciation and amortization by segment | The following tables summarize the Company's depreciation and amortization expense and capital expenditures for each of its reportable segments:
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Schedule of Capital Expenditures, by Segment |
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Reconciliation of Assets from Segment to Consolidated | The following table summarizes total assets for each of the Company's reportable segments:
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Net revenues and long-lived assets by geographic location | Net revenues and long-lived assets by geographic location of the reporting subsidiary are as follows:
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Unallocated amount to segment [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring and related costs | The fiscal years presented included certain unallocated restructuring and other charges (see Note 11), which are detailed below:
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Additional Financial Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Interest and Taxes | Cash paid for interest and income taxes is as follows:
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Description of Business (Details) |
12 Months Ended |
---|---|
Apr. 02, 2016
Segment
| |
Description of Business [Abstract] | |
Number of reportable segments | 3 |
Summary of Significant Accounting Policies (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Summary of basic and diluted shares | |||
Basic shares | 85.2 | 88.2 | 90.7 |
Dilutive effect of stock options, restricted stock and RSUs | 0.7 | 0.9 | 1.3 |
Diluted shares | 85.9 | 89.1 | 92.0 |
Summary of Significant Accounting Policies (Textual) [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2.6 | 1.9 | 1.2 |
Acquisitions (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
Jul. 01, 2013 |
Apr. 10, 2013 |
|
Business Acquisition [Line Items] | |||||
Gain on acquisition of Chaps | $ 0 | $ 0 | $ 16 | ||
Australia and New Zealand Licensed Operations Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Inventory | $ 9 | ||||
Fixed assets | 4 | ||||
Intangible asset | 3 | ||||
Other assets | 2 | ||||
Total net liabilities assumed | (3) | ||||
Fair value of net assets acquired | $ 15 | ||||
Consideration paid | 15 | ||||
Chaps Menswear License Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Inventory | $ 30 | ||||
Accounts receivable | 19 | ||||
Intangible asset | 9 | ||||
Total assets acquired | 58 | ||||
Accounts payable | (22) | ||||
Other net liabilities | (2) | ||||
Total net liabilities assumed | (24) | ||||
Fair value of net assets acquired | $ 34 | ||||
Consideration paid | 18 | ||||
Gain on acquisition of Chaps | $ 16 |
Acquisitions (Details Textuals) $ in Millions |
12 Months Ended |
---|---|
Mar. 29, 2014
USD ($)
| |
Australia and New Zealand Licensed Operations Acquisition [Member] | |
Business Acquisition [Line Items] | |
Consideration paid | $ 15 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years |
Chaps Menswear License Acquisition [Member] | |
Business Acquisition [Line Items] | |
Consideration paid | $ 18 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 months |
Business Acquisition, Transaction Costs | $ 3 |
Property and Equipment (Details) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Property and equipment, net | ||
Land and improvements | $ 17 | $ 17 |
Buildings and improvements | 460 | 409 |
Furniture and fixtures | 727 | 686 |
Machinery and equipment | 359 | 317 |
Capitalized software | 460 | 402 |
Leasehold improvements | 1,248 | 1,185 |
Construction in progress | 216 | 99 |
Property plant and equipment, gross | 3,487 | 3,115 |
Less: accumulated depreciation | (1,904) | (1,679) |
Property and equipment, net | $ 1,583 | $ 1,436 |
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
|
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 903 | $ 964 |
Foreign currency translation | 15 | (61) |
Goodwill, ending balance | 918 | 903 |
Wholesale [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 571 | 617 |
Foreign currency translation | 11 | (46) |
Goodwill, ending balance | 582 | 571 |
Retail [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 200 | 210 |
Foreign currency translation | 3 | (10) |
Goodwill, ending balance | 203 | 200 |
Licensing [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 132 | 137 |
Foreign currency translation | 1 | (5) |
Goodwill, ending balance | $ 133 | $ 132 |
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Fiscal 2017 | $ 24 | |
Fiscal 2018 | 24 | |
Fiscal 2019 | 24 | |
Fiscal 2020 | 23 | |
Fiscal 2021 | 21 | |
Fiscal 2022 and thereafter | 121 | |
Intangible assets subject to amortization, Net | $ 237 | $ 260 |
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 11 years 6 months | ||
Reacquired Licensed Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 13 years 6 months | ||
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 9 years 5 months |
Other Current and Non-Current Assets (Details) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | ||
Other taxes receivable | $ 112 | $ 93 |
Prepaid rent expense | 37 | 31 |
Restricted cash | 17 | 2 |
Derivative financial instruments, current | 16 | 65 |
Tenant allowances receivable | 13 | 14 |
Prepaid samples | 9 | 12 |
Prepaid advertising and marketing | 7 | 7 |
Other prepaid expenses and current assets | 57 | 57 |
Total prepaid expenses and other current assets | 268 | 281 |
Other Assets, Noncurrent [Abstract] | ||
Other Long-term Investments | 187 | |
Available-for-sale Securities, Debt Securities, Noncurrent | 8 | |
Security deposits | 32 | 28 |
Restricted cash | 29 | 36 |
Derivative financial instruments, noncurrent | 6 | 22 |
Other non-current assets | 42 | 37 |
Total other non-current assets | $ 296 | $ 131 |
Other Current and Non-Current Liabilities (Details) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Accrued Expenses and Other Current Liabilities | ||
Accrued operating expenses | $ 186 | $ 183 |
Accrued inventory | 176 | 75 |
Accrued payroll and benefits | 149 | 162 |
Other taxes payable | 139 | 108 |
Accrued capital expenditures | 65 | 62 |
Deferred income | 50 | 38 |
Dividends payable | 41 | 43 |
Restructuring Reserve, Current | 40 | 5 |
Derivative Liability, Current | 26 | 18 |
Capital lease obligations | 21 | 19 |
Other accrued expenses and current liabilities | 5 | 2 |
Total accrued expenses and other current liabilities | 898 | 715 |
Other Non-Current Liabilities | ||
Capital lease obligations | 266 | 238 |
Deferred rent obligations | 222 | 219 |
Derivative Liability, Noncurrent | 33 | 1 |
Deferred tax liabilities | 17 | 87 |
Deferred compensation | 8 | 9 |
Deferred income | 1 | 20 |
Other non-current liabilities | 46 | 41 |
Total other non-current liabilities | $ 593 | $ 615 |
Impairments of Assets (Details Textual) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | |||
Non-cash impairments of assets | $ 49 | $ 7 | $ 1 |
Global Reorganization Plan [Member] | |||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | |||
Non-cash impairments of assets | 27 | ||
Other - Non-restructuring related [Member] | |||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | |||
Non-cash impairments of assets | $ 22 |
Restructuring and Other Charges (Details Textual) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Global Reorganization Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Expected Cost Remaining | $ 5 | ||
Cash-related restructuring charges | 86 | ||
Restructuring reserve | 40 | $ 0 | |
Fiscal 2015 Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Cash-related restructuring charges | 10 | ||
Restructuring reserve | $ 5 | ||
Fiscal 2014 Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Cash-related restructuring charges | $ 8 | ||
Customs Audit [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Other Nonrecurring Expense | 34 | ||
Other Expense [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Other Nonrecurring Expense | $ 14 | ||
Accelerated stock-based compensation expense [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Other Nonrecurring Expense | $ 10 |
Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 275 | $ 620 | $ 710 |
Foreign | 277 | 367 | 386 |
Income before provision for income taxes | $ 552 | $ 987 | $ 1,096 |
Income Taxes (Details 1) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Current: | |||
Federal | $ 88 | $ 161 | $ 211 |
State and local | (3) | 35 | 51 |
Foreign | 79 | 78 | 57 |
Total Current Provision for Income Taxes | 164 | 274 | 319 |
Deferred: | |||
Federal | (5) | 22 | (4) |
State and local | (1) | 3 | 1 |
Foreign | (2) | (14) | 4 |
Total deferred provision for income taxes | (8) | 11 | 1 |
Total provision for income taxes | 156 | 285 | 320 |
Tax benefits from stock-based compensation arrangements | $ 10 | $ 8 | $ 34 |
Income Taxes (Details 2) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | 35.00% |
Provision for income taxes at the U.S. federal statutory rate | $ 193 | $ 346 | $ 384 |
Increase (decrease) due to: | |||
State and local income taxes, net of federal benefit | 11 | 21 | 29 |
Foreign income taxed at different rates, net of U.S. foreign tax credits | (33) | (96) | (89) |
Unrecognized tax benefits and settlements of tax examinations | (13) | 11 | (5) |
Other | (2) | 3 | 1 |
Total provision for income taxes | $ 156 | $ 285 | $ 320 |
Effective tax rate | 28.20% | 28.90% | 29.20% |
Debt (Details) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Commercial Paper | $ 90 | $ 234 |
Line of Credit, Current | 26 | 0 |
Total Debt | 713 | 532 |
Short-term debt | 116 | 234 |
Long-term debt | 597 | 298 |
2.125% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 301 | 298 |
Interest Rate Fair Value Hedge Derivative at Fair Value, Net | (2) | |
Unamortized Debt Issuance Costs | 1 | 2 |
2.625% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 296 | $ 0 |
Interest Rate Fair Value Hedge Derivative at Fair Value, Net | 2 | |
Unamortized Debt Issuance Costs | $ 2 |
Debt (Details Textual) € in Millions, $ in Millions |
12 Months Ended | |
---|---|---|
Apr. 02, 2016
USD ($)
|
Mar. 29, 2014
EUR (€)
|
|
2.125% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 300 | |
Debt instrument, maturity date | Sep. 26, 2018 | |
Long-term debt, net of discount | 99.896% | |
Interest rate on debt | 2.125% | |
2.625% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 300 | |
Debt instrument, maturity date | Aug. 18, 2020 | |
Long-term debt, net of discount | 99.795% | |
Interest rate on debt | 2.625% | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 100.00% | |
Debt instrument restrictive covenants | The Indenture contains certain covenants that restrict the Company's ability, subject to specified exceptions, to incur certain liens; enter into sale and leaseback transactions; consolidate or merge with another party; or sell, lease, or convey all or substantially all of the Company's property or assets to another party. However, the Indenture does not contain any financial covenants. | |
Euro Debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | € | € 209 | |
Debt instrument, maturity date | Oct. 04, 2013 | |
Interest rate on debt | 4.50% |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Financial assets recorded at fair value: | ||
Derivative assets, fair value | $ 22 | $ 87 |
Total assets, fair value | 30 | 95 |
Financial liabilities recorded at fair value | ||
Derivative liabilities, fair value | 59 | 19 |
Total liabilities, fair value | 59 | 19 |
Fair Value, Inputs, Level 2 [Member] | Recurring [Member] | ||
Financial assets recorded at fair value: | ||
Derivative assets, fair value | 22 | 87 |
Financial liabilities recorded at fair value | ||
Derivative liabilities, fair value | 59 | 19 |
Corporate Bonds - non-U.S. [Member] | Fair Value, Inputs, Level 1 [Member] | Recurring [Member] | ||
Financial assets recorded at fair value: | ||
Investments recorded at fair value | $ 8 | $ 8 |
Fair Value Measurements (Details 2) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Fair Value Disclosures [Abstract] | |||
Carrying value of long-lived assets impaired | $ 49 | $ 7 | $ 1 |
Asset Impairment Charges | (49) | (7) | (1) |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Financial Instruments (Details 1) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative assets, gross amount in the balance sheet | $ 22 | $ 87 |
Gross amount of derivatives assets subject to master netting arrangements not offset | (11) | (14) |
Derivative Asset, net basis | 11 | 73 |
Derivative Liability, gross amount in the balance sheet | 59 | 19 |
Gross amount of derivative liabilities subject to master netting arrangements not offset | (11) | (14) |
Derivative Liability, net basis | $ 48 | $ 5 |
Financial Instruments (Details 3) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (7) | $ 18 | $ 20 |
FC-Other [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (7) | $ 18 | $ 20 |
Financial Instruments (Details Textual 1) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
|
Schedule of Available-for-sale Securities [Line Items] | ||
Time Deposits, Short Term | $ 621 | $ 644 |
Available-for-sale Securities, Debt Securities, Noncurrent | $ 8 | |
Time Deposits, Long Term | $ 187 | |
Non-current investment maturity range, lower end | 1 year | 1 year |
Non-current investment maturity range, higher end | 2 years | 2 years |
Corporate Bonds - non-U.S. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Debt Securities, Noncurrent | $ 8 | |
Available-for-sale Securities, Debt Securities, Current | $ 8 |
Equity (Details) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 30, 2013 |
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Cost of shares repurchased | $ 500 | $ 532 | $ 558 | |
Stock Repurchase Program, Remaining Available Amount | 100 | |||
General repurchase program [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Cost of shares repurchased | $ 480 | $ 500 | $ 548 | |
Number of shares repurchased | 4.2 | 3.2 | 3.2 | |
Prepaid Repurchase Program [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Cost of shares repurchased | $ 50 | |||
Number of shares repurchased | 0.3 | |||
Stock Repurchase Program, Period in Force | 93 days | |||
Withholding in satisfaction of taxes on vested equity award [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Cost of shares repurchased | $ 20 | $ 32 | $ 60 | |
Number of shares repurchased | 0.2 | 0.2 | 0.4 |
Equity (Details Textual 1) $ in Millions |
May. 11, 2016
USD ($)
|
---|---|
Stock Repurchase Program Amount Authorization [Member] | |
Subsequent Event [Line Items] | |
Stock Repurchase Program, Additional Authorized Amount | $ 200 |
Stock-based Compensation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Summary of the total compensation expense and the associated income tax benefits recognized related to stock-based compensation arrangements | |||
Compensation expense | $ 97 | $ 81 | $ 93 |
Income tax benefit | (37) | $ (30) | (34) |
Accelerated stock-based compensation expense | $ 9 | $ 10 |
Stock-based Compensation (Details 1) - Stock Options [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Weighted average assumptions used to estimate the fair value of stock options granted | ||
Expected term | 4 years 2 months 7 days | 4 years 2 months 7 days |
Expected volatility | 30.20% | 32.90% |
Expected dividend yield | 1.10% | 0.98% |
Risk-free interest rate | 1.40% | 1.10% |
Weighted-average option grant date fair value | $ 37.91 | $ 45.83 |
Stock-based Compensation (Details 3) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Aggregate intrinsic value of stock option exercised | $ 44 | $ 35 | $ 63 |
Cash received from exercise of stock options | 34 | 52 | 52 |
Tax benefits realized on exercise of stock options | $ 17 | $ 12 | $ 24 |
Stock-based Compensation (Details 5) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, weighted-average grant date fair value | $ 111.94 | $ 162.36 | $ 164.76 |
Total fair value of awards vested | $ 1 | $ 1 | $ 1 |
Service-based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, weighted-average grant date fair value | $ 125.19 | $ 150.23 | |
Total fair value of awards vested | $ 2 | $ 1 | $ 16 |
Stock-based Compensation (Details 6) - Performance-based restricted stock units - with TSR Modifier [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Weighted average assumptions used to determine the fair values of performance-based RSUs with a TSR modifier | ||
Expected term | 3 years | 2 years 11 months |
Expected volatility | 29.80% | 32.60% |
Expected dividend yield | 1.09% | 0.98% |
Risk-free interest rate | 0.90% | 0.40% |
Granted, weighted-average grant date fair value | $ 169.47 | $ 169.14 |
Stock-based Compensation (Details 8) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Performance-based restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, weighted-average grant date fair value | $ 126.48 | $ 157.10 | $ 171.93 |
Total fair value of awards vested | $ 38 | $ 65 | $ 109 |
Performance Based Restricted Stock Units With Tsr Modifier [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, weighted-average grant date fair value | $ 169.47 | $ 169.14 | |
Total fair value of awards vested | $ 7 | $ 0 | $ 0 |
Segment Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Net revenues by segment | |||
Sales revenue | $ 7,230 | $ 7,451 | $ 7,284 |
Licensing revenue | 175 | 169 | 166 |
Total net revenues | 7,405 | 7,620 | 7,450 |
Wholesale [Member] | |||
Net revenues by segment | |||
Sales revenue | 3,297 | 3,495 | 3,486 |
Retail [Member] | |||
Net revenues by segment | |||
Sales revenue | 3,933 | 3,956 | 3,798 |
Licensing [Member] | |||
Net revenues by segment | |||
Licensing revenue | $ 175 | $ 169 | $ 166 |
Sales Revenue, Goods, Net [Member] | |||
Net revenues by segment | |||
Concentration Risk, Percentage | 24.00% | ||
Macy's [Member] | Sales Revenue, Goods, Net [Member] | |||
Net revenues by segment | |||
Concentration Risk, Percentage | 11.00% | 12.00% | 12.00% |
Segment Information (Details 1) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Operating income by segment | |||
Operating income | $ 582 | $ 1,035 | $ 1,130 |
Unallocated corporate expenses | (3,605) | (3,343) | (3,180) |
Gain on acquisition of Chaps | 0 | 0 | 16 |
Restructuring and other charges | (143) | (10) | (18) |
Asset Impairment Charges | 49 | 7 | 1 |
Wholesale [Member] | |||
Operating income by segment | |||
Operating income | 822 | 943 | 963 |
Asset Impairment Charges | 6 | 1 | |
Retail [Member] | |||
Operating income by segment | |||
Operating income | 359 | 527 | 572 |
Asset Impairment Charges | 43 | 7 | |
Licensing [Member] | |||
Operating income by segment | |||
Operating income | 155 | 152 | 150 |
Operating Segments [Member] | |||
Operating income by segment | |||
Operating income | 1,336 | 1,622 | 1,685 |
Unallocated amount to segment [Member] | |||
Operating income by segment | |||
Unallocated corporate expenses | (611) | (577) | (553) |
Gain on acquisition of Chaps | 0 | 0 | 16 |
Restructuring and other charges | $ (143) | $ (10) | $ (18) |
Segment Information (Details 3) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 310 | $ 294 | $ 258 |
Wholesale [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 61 | 66 | 66 |
Retail [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 157 | 154 | 125 |
Licensing [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 1 | 0 | 0 |
Unallocated corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 91 | $ 74 | $ 67 |
Segment Information (Details 4) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 418 | $ 391 | $ 390 |
Wholesale Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 43 | 48 | 53 |
Retail Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 173 | 237 | 252 |
Licensing Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 4 | 4 | 1 |
Unallocated corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 198 | $ 102 | $ 84 |
Segment Information (Details 5) - USD ($) $ in Millions |
Apr. 02, 2016 |
Mar. 28, 2015 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 6,213 | $ 6,106 |
Wholesale Segment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 2,569 | 2,643 |
Retail Segment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 2,540 | 2,395 |
Licensing Segment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 188 | 197 |
Unallocated corporate [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 916 | $ 871 |
Segment Information (Details 6) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net revenues | $ 7,405 | $ 7,620 | $ 7,450 |
Long-lived assets | 1,583 | 1,436 | |
Americas [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net revenues | 4,938 | 5,077 | 4,983 |
Long-lived assets | 1,206 | 1,106 | |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net revenues | 1,573 | 1,627 | 1,580 |
Long-lived assets | 212 | 148 | |
Asia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net revenues | 894 | 916 | 887 |
Long-lived assets | 165 | 182 | |
U.S. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net revenues | 4,688 | 4,827 | $ 4,744 |
Long-lived assets | $ 1,160 | $ 1,069 |
Segment Information (Details Textual) |
12 Months Ended |
---|---|
Apr. 02, 2016
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Additional Financial Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Mar. 28, 2015 |
Mar. 29, 2014 |
|
Cash Interest and Taxes | |||
Cash paid for interest | $ 15 | $ 15 | $ 20 |
Cash paid for income taxes | 172 | 317 | 302 |
Other Significant Noncash Transactions [Line Items] | |||
Capital Lease Obligations Incurred | 49 | ||
Capital lease asset recognized | 49 | ||
Additional Financial Information (Textual) [Abstract] | |||
Capital expenditures incurred but not yet paid | $ 65 | 62 | 45 |
Noncash capital expenditure | $ 19 | ||
Flagship store on Fifth Avenue NYC [Member] | |||
Other Significant Noncash Transactions [Line Items] | |||
Capital Lease Obligations Incurred | 230 | ||
Capital lease asset recognized | $ 230 |
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