Ralph Lauren Hikes Dividend; To Buy Back Additional $1 Bln In Shares

(RTTNews) - Ralph Lauren Corp. (RL) presented its Strategic Growth Plan, "Writing Our Next Great Chapter" and long term financial outlook. The company declared a 25% increase in the regular quarterly cash dividend on the company's Common Stock. The company's Board authorized an additional $1 billion stock repurchase program. The company expects to incur restructuring charges of $100 million - $150 million in connection with its Fiscal 2019 restructuring plan.

The company reiterated its Fiscal 2019 guidance that was recently provided on its earnings call on May 23rd and introducing its five-year financial outlook. This outlook is in constant currency and excludes restructuring charges.

Over the next five years, from Fiscal 2018 to Fiscal 2023, the company expects revenue to grow at a compounded annual growth rate of low to mid-single digits in constant currency. In addition, the company is targeting a return to revenue growth in Fiscal 2020 in constant currency.

Operating margin is expected to expand to mid-teens by Fiscal 2023, in constant currency. In addition, marketing spend is expected to grow to approximately 5% of revenue by Fiscal 2023.

In addition, capital expenditures are expected to represent 4-5% of revenue by Fiscal 2023.

The company declared a 25% increase in the regular quarterly cash dividend on the company's Common Stock. The new quarterly cash dividend is $0.625 per share. This represents a new annual dividend of $2.50 per share. The next quarterly dividend is payable on July 13, 2018 to shareholders of record at the close of business on June 29, 2018.

In addition, the company's Board authorized an additional $1 billion stock repurchase program permitting the Company to purchase shares of Class A Common Stock, subject to overall business and market conditions. This amount is in addition to the $100 million available at the end of the fourth quarter of Fiscal 2018 as part of a previously authorized stock repurchase program, bringing the Company's total current authorization to $1.1 billion.

The company plans to return 100% of free cash flow to shareholders over the next five years, returning over $2.5 billion on a cumulative basis through Fiscal 2023 through dividends and repurchases.

The company's Board of Directors approved a restructuring plan associated with the Company's strategicobjective of operating with discipline to drive sustainable long-term growth. The company expects to incur restructuring charges of $100 million - $150 million in connection with its Fiscal 2019 Restructuring Plan, associated with activities primarily related to the rightsizing and consolidation of its global distribution network and corporate offices, and through severance actions.

These charges are expected to be substantially recognized by the end of Fiscal 2019 and are in addition to the $100 million of Way Forward Plan charges that are expected to be recognized in Fiscal 2019.

The company expects its fiscal 2019 Restructuring Plan activities to result in approximately $60-$80 million of gross annualized expense savings. This is in addition to the cost savings realized associated with the Company's Way Forward Plan.

The company said that it has nominated Linda Findley Kozlowski to stand for election to the Company's Board of Directors at the 2018 Annual Meeting of Stockholders, in August 2018. The appointment will bring the number of Directors on the Company's Board to 14, and reflects the Company's commitment to continue to expand and diversify its Board, following the nomination of Angela Ahrendts and recent election of Michael George in May.