How did Polo Ralph Lauren perform financially in fiscal 2002?

Net revenues grew to $2,363,707 thousand from $2,225,774 thousand, and net income increased to $172,500 thousand from $59,262 thousand. Fiscal 2001 results were reduced by a $123,554 thousand restructuring charge, so the year-over-year comparison is affected by that item.

Which segments drove revenue?

Wholesale sales were $1,198,060 thousand, retail sales were $924,273 thousand, and licensing revenue was $241,374 thousand. Wholesale increased compared with fiscal 2001, while retail sales were roughly flat.

How concentrated is the company's customer and licensing base?

The ten largest customers accounted for approximately 77.7% of wholesale net sales in fiscal 2002. Jones Apparel Group accounted for 26.9% of licensing revenue, WestPoint Stevens for 14.2% and Seibu Department Stores for 11.6%.

What significant legal matters are disclosed?

The United States Polo Association and Jordache filed a suit seeking $50 million in compensatory and $50 million in punitive damages, which the company believes is substantially without merit. A Saipan-related class settlement was preliminarily approved on May 10, 2002 and remains subject to final court approval.

Does the company pay dividends?

No. The company has not declared cash dividends on its common stock since its initial public offering, other than $27.4 million in fiscal 1998 paid to Class B and Class C holders, and it has no current intention to pay cash dividends.

RL 10-K FY2002 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed June 25, 2002. Cited figures are marked; the original filing is the authoritative source.

Polo Ralph Lauren Corporation reported net revenues of $2,363,707 thousand^a (about $2.36 billion) for the fiscal year ended March 30, 2002, up from $2,225,774 thousand in fiscal 2001.

Net sales were $2,122,333 thousand^b and licensing revenue was $241,374 thousand. Net income rose to $172,500 thousand, or $1.75 per diluted share, compared with $59,262 thousand, or $0.61 per diluted share, in fiscal 2001, which was burdened by a $123,554 thousand restructuring charge. Income from operations was $293,212 thousand versus $117,221 thousand a year earlier.

Cash and cash equivalents increased to $238,774 thousand and total debt declined to $318,402 thousand^c from $383,100 thousand. Cash provided by operating activities was $293,758 thousand. The company operates three segments: wholesale, retail and licensing.

Wholesale sales were $1,198,060 thousand^d, retail sales were $924,273 thousand, and the company operated 236 stores at year end. Licensing relationships are concentrated: Jones Apparel Group accounted for 26.9% of licensing revenue, WestPoint Stevens for 14.2%, and Seibu Department Stores for 11.6%. Three department store customers, Federated, Dillard's and May, together made up 35% of trade accounts receivable at March 30, 2002.

The filing also discloses several legal matters, including a lawsuit by the United States Polo Association and Jordache seeking $50 million in compensatory damages and $50 million in punitive damages, and a Saipan-related class settlement that remains subject to court approval. The European subsidiaries' fiscal year end was changed to conform with the company's March year end, with the three-month results for the period ended December 29, 2001 recorded as an adjustment to retained earnings.

02—Key points

Key Highlights

Net revenues of $2,363,707 thousand in fiscal 2002, up from $2,225,774 thousand in fiscal 2001.
Net income of $172,500 thousand ($1.75 per diluted share), compared with $59,262 thousand ($0.61 per diluted share) in fiscal 2001.
Income from operations of $293,212 thousand, compared with $117,221 thousand in fiscal 2001, which included a $123,554 thousand restructuring charge.
Wholesale sales rose to $1,198,060 thousand from $1,053,842 thousand, while retail sales were $924,273 thousand versus $928,577 thousand.
Total debt fell to $318,402 thousand from $383,100 thousand, and cash and cash equivalents rose to $238,774 thousand from $102,219 thousand.
Licensing concentration: Jones Apparel Group 26.9%, WestPoint Stevens 14.2% and Seibu Department Stores 11.6% of licensing revenue.
Acquired PRL Fashions of Europe S.R.L. in October 2001 for approximately $22.0 million in cash, plus earn-outs and a guaranteed minimum annual payment of $3.5 million.

03—Questions

Frequently Asked Questions

How did Polo Ralph Lauren perform financially in fiscal 2002?
Net revenues grew to $2,363,707 thousand from $2,225,774 thousand, and net income increased to $172,500 thousand from $59,262 thousand. Fiscal 2001 results were reduced by a $123,554 thousand restructuring charge, so the year-over-year comparison is affected by that item.
Which segments drove revenue?
Wholesale sales were $1,198,060 thousand, retail sales were $924,273 thousand, and licensing revenue was $241,374 thousand. Wholesale increased compared with fiscal 2001, while retail sales were roughly flat.
How concentrated is the company's customer and licensing base?
The ten largest customers accounted for approximately 77.7% of wholesale net sales in fiscal 2002. Jones Apparel Group accounted for 26.9% of licensing revenue, WestPoint Stevens for 14.2% and Seibu Department Stores for 11.6%.
What significant legal matters are disclosed?
The United States Polo Association and Jordache filed a suit seeking $50 million in compensatory and $50 million in punitive damages, which the company believes is substantially without merit. A Saipan-related class settlement was preliminarily approved on May 10, 2002 and remains subject to final court approval.
Does the company pay dividends?
No. The company has not declared cash dividends on its common stock since its initial public offering, other than $27.4 million in fiscal 1998 paid to Class B and Class C holders, and it has no current intention to pay cash dividends.

04—Continue

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