Ralph Lauren Affirms FY17 Outlook; Sees Restructuring Charges Of Up To $400 Mln

(RTTNews) - While reporting its first-quarter financial results today, apparel maker Ralph Lauren Corp. (RL) affirmed its financial outlook for fiscal 2017.

For the second quarter, the company expects consolidated net revenues to be down mid-to-high single digits on a reported basis.

For Fiscal 2017, Ralph Lauren continues to expect consolidated net revenues to decrease at a low-double digit rate.

The full-year revenue outlook reflects a proactive pullback in inventory receipts, store closures, pricing harmonization and other quality of sale initiatives, combined with the weak retail traffic and a highly promotional environment in the U.S.

The company also continues to expect operating margin for fiscal 2017 to be approximately 10 percent, as cost savings are expected to be offset by growth in new store expenses, unfavorable foreign currency impacts, infrastructure investments and fixed expense deleverage.

Ralph Lauren said it expects its fiscal 2017 restructuring activities to result in approximately $180 million to $220 million of annualized expense savings related to its initiatives to streamline the organizational structure and right-size its cost structure and real estate portfolio.

This is in addition to the $125 million of annualized cost savings associated with the company's fiscal 2016 restructuring activities.

The company expects to incur restructuring charges of up to $400 million as a result of the fiscal 2017 restructuring activities and up to a $150 million inventory charge associated with the company's Way Forward Plan. These charges are expected to be substantially realized by the end of fiscal 2017.