Ralph Lauren Corporation Enters into Amended and Restated Credit Agreement
Feb 18 15
On February 11, 2015, Ralph Lauren Corporation and certain of its foreign subsidiaries (collectively with the company, the borrowers) entered into a definitive amended and restated credit agreement for a revolving credit facility with JPMorgan Chase Bank, N.A. as administrative agent, 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 a syndicate of financial institutions and institutional lenders. The agreement amended and restated the company’s credit agreement, dated as of March 10, 2011, by and among the company, certain of its foreign subsidiaries, the lenders party thereto, the administrative agent, and Bank of America, N.A., Wells Fargo Bank, N.A., HSBC Bank USA, N.A. and Deutsche Bank AG New York Branch as syndication agents. The facility may be used to finance the working capital needs, capital expenditures, certain investments and general corporate purposes of the borrowers and their subsidiaries (which may include commercial paper back-up) and for short-term funding of acquisitions. Certain terms and conditions of the Facility are as follows: Structure. The agreement provides for a five-year senior revolving credit facility in an aggregate amount at any one time outstanding of up to $500 million, including sub-facilities for letters of credit. In addition, the agreement provides that the revolving commitments under the facility may be increased to $750 million, subject to certain terms and conditions. The facility will mature in February 2020. Loans may be made, at the borrowers’ election, in Euros, Hong Kong Dollars, Japanese Yen and certain other currencies, in addition to U.S. Dollars. Letters of credit. The facility will be available for the issuance of letters of credit by the administrative agent or one or more other lenders. Standby letters of credit may be issued in respect of obligations of the company or any of its subsidiaries incurred pursuant to contracts made or performances undertaken, or to be undertaken, or like matters relating to contracts to which the company or any of its subsidiaries is, or proposes to become, a party in the ordinary course of business, including, but not limited to, for insurance purposes and in connection with lease transactions. Commercial letters of credit may be issued to finance purchases of goods by the company and its subsidiaries in the ordinary course of business. The aggregate amount outstanding at any time with respect to letters of credit may not exceed $50 million. Interest rates and fees. Pursuant to the agreement, borrowings under the facility bear interest at a rate per annum equal to, at the borrowers’ option, either (a) an alternate base rate or (b) a rate based on the rates applicable for deposits in the interbank market for U.S. Dollars or the applicable currency in which the loans are made plus an applicable margin. The applicable margin for Adjusted LIBO Rate loans will be adjusted by reference to a grid based on ratings for the company’s senior, unsecured long-term indebtedness provided by established ratings agencies. Additionally, the borrowers will pay a commitment fee, calculated at a rate per annum determined in accordance with the Pricing Grid, on the average daily unused amount of the facility, payable quarterly in arrears, and certain fees with respect to letters of credit that are issued. Optional prepayments and commitment reductions. Loans under the agreement may be prepaid and commitments may be terminated or reduced by the borrowers without premium or penalty (other than breakage costs described below under yield protection”) in minimum amounts of generally, in the case of prepayments, $500,000, and in the case of partial commitment reductions, $1 million.
Ralph Lauren Corporation Declares Quarterly Cash Dividend, Payable on April 10, 2015
Feb 4 15
Ralph Lauren Corporation announced that its board of directors declared an 11% increase in the regular quarterly cash dividend on the company's common stock. The new quarterly cash dividend is $0.50 per share. Over the next year, the new annual dividend amount will be $2.00 per share. The next quarterly dividend is payable on April 10, 2015 to shareholders of record at the close of business on March 27, 2015.
Ralph Lauren Corporation Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended December 27, 2014; Provides Earnings Guidance for the Fourth Quarter of Fiscal 2015; Revises Earnings Guidance for the Full Year of Fiscal 2015 and 2016
Feb 4 15
Ralph Lauren Corporation reported unaudited consolidated earnings results for the third quarter and nine months ended December 27, 2014. For the quarter, the company reported net revenues of $2,033 million against $2,015 million for the same period a year ago. Operating income was $315 million against $334 million for the same period a year ago. Income before provision for income taxes was $301 million against $324 million for the same period a year ago. Net income was $215 million, or $2.41 per diluted share compared to net income of $237 million, or $2.57 per diluted share, for the third quarter of Fiscal 2014. Decline in net income and net income per diluted share was principally the result of lower operating income and a higher effective tax rate of 29% compared to 27% in the third quarter of Fiscal 2014. The company had $124 million in capital expenditures in the third quarter of Fiscal 2015 compared to $81 million in the prior year period. The company reported fiscal third-quarter net income fell 9% as the company spent more on opening new stores and marketing while revenue stayed nearly flat.
For the nine months, net revenues were $5,735 million against $5,583 million for the same period a year ago. Operating income was $845 million against $905 million for the same period a year ago. Income before provision for income taxes was $814 million against $877 million for the same period a year ago. Net income was $578 million or $6.46 per diluted share against $623 million or $6.74 per diluted share for the same period a year ago.
In the fourth quarter of Fiscal 2015, the company expects consolidated net revenues to increase at a mid-single digit rate in constant currency. Based on current rates, the net negative impact from foreign currency translation is estimated at approximately 550 basis points. Operating margin for the fourth quarter of Fiscal 2015 is expected to be 250-300 basis points below the comparable prior year period, reflecting relatively equal pressure from the gross margin and operating expenses. The fourth quarter tax rate is estimated at 31%-32%. Based on the third quarter results and incrementally unfavorable foreign currency movements, the company is adjusting its outlook for Fiscal 2015.
The company now expects consolidated net revenues for Fiscal 2015 to increase by approximately 4% in constant currency. Based on current rates, the net negative impact from foreign currency translation is estimated at approximately 200 basis points. The revised revenue outlook compares to the company's previous expectation of 5%-7% growth. The Fiscal 2015 operating margin is now estimated to be approximately 170-190 basis points below Fiscal 2014's level, which compares to a prior expectation of a 100-125 basis point decline. The full year Fiscal 2015 tax rate continues to be estimated at 30%. Based on current rates, foreign exchange is expected to have a negative impact on the company's sales and profits in Fiscal 2016.