RALPH LAUREN CORP

Previous wording

The following management's discussion and analysis of financial condition and results of operations ("MD&A") should be read together with our audited consolidated financial statements and notes thereto, which are included in this Annual Report on Form 10-K. We utilize a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, Fiscal 2024 ended on March 30, 2024 and was a 52-week period; Fiscal 2023 ended on April 1, 2023 and was a 52-week period; Fiscal 2022 ended on April 2, 2022 and was a 53-week period; and Fiscal 2025 will end on March 29, 2025 and will be a 52-week period.

Current wording

The following management's discussion and analysis of financial condition and results of operations ("MD&A") should be read together with our audited consolidated financial statements and notes thereto, which are included in this Annual Report on Form 10-K. We utilize a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, Fiscal 2025 ended on March 29, 2025 and was a 52-week period; Fiscal 2024 ended on March 30, 2024 and was a 52-week period; Fiscal 2023 ended on April 1, 2023 and was a 52-week period; and Fiscal 2026 will end on March 28, 2026 and will be a 52-week period.

Previous wording

We diversify our business by geography (North America, Europe, and Asia, among other regions) and channel of distribution (retail, wholesale, and licensing). This allows us to maintain a dynamic balance as our operating results do not depend solely on the performance of any single geographic area or channel of distribution. We sell directly to consumers through our integrated retail channel, which includes our retail stores, concession-based shop-within-shops, and digital commerce operations around the world. Our wholesale sales are made principally to major department stores, specialty stores, and third-party digital partners around the world, as well as to certain third-party-owned stores to which we have licensed the right to operate in defined geographic territories using our trademarks. In addition, we license to third parties for specified periods the right to access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings.

Current wording

We diversify our business by geography (North America, Europe, and Asia, among other regions) and channel of distribution (retail, wholesale, and licensing). This allows us to maintain a dynamic balance as our operating results do not depend solely on the performance of any single geographic area or channel of distribution. We sell directly to consumers through our integrated retail channel, which includes our retail stores, concession-based shop-within-shops, and digital commerce operations around the world. Our wholesale sales are made principally to major department stores, specialty stores, and third-party digital partners around the world, as well as to certain third-party-owned stores to which we have licensed the right to operate in defined geographic territories using our trademarks. In addition, we license to third parties for specified periods the right to access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel categories, eyewear, fragrances, and home furnishings.

Previous wording

•North America— Our North America segment, representing approximately 44% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses primarily in the U.S. and Canada. In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce sites, www.RalphLauren.com and www.RalphLauren.ca. Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores.

Current wording

•North America— Our North America segment, representing approximately 43% of our Fiscal 2025 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses primarily in the U.S. and Canada. In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce sites, www.RalphLauren.com and www.RalphLauren.ca. Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores.

Previous wording

•Europe— Our Europe segment, representing approximately 30% of our Fiscal 2024 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Europe and emerging markets. In Europe, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. Our wholesale business in Europe is comprised primarily of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital and licensee partners.

Current wording

•Europe— Our Europe segment, representing approximately 31% of our Fiscal 2025 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Europe and emerging markets. In Europe, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. Our wholesale business in Europe is comprised primarily of a varying mix of sales to both department stores and specialty stores, depending on the country, as well as to various third-party digital and licensee partners.

Previous wording

No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 2% of our Fiscal 2024 net revenues, which primarily consist of Ralph Lauren and Chaps branded royalty revenues earned through our global licensing alliances. In addition, prior to its disposition at the end of our first quarter of Fiscal 2022, our other non-reportable segments also included sales of Club Monaco branded products made through our retail and wholesale businesses in the U.S., Canada, and Europe, and our licensing alliances in Asia. See Note 9 to the accompanying consolidated financial statements for additional discussion regarding the disposition of our former Club Monaco business, as well as the transition of our Chaps business to a fully licensed business model.

Current wording

No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 2% of our Fiscal 2025 net revenues, which primarily consist of Ralph Lauren and Chaps branded royalty revenues earned through our global licensing alliances.

Previous wording

Approximately 55% of our Fiscal 2024 net revenues were earned outside of the U.S. See Note 20 to the accompanying consolidated financial statements for further discussion of our segment reporting structure.

Current wording

Approximately 57% of our Fiscal 2025 net revenues were earned outside of the U.S. See Note 20 to the accompanying consolidated financial statements for further discussion of our segment reporting structure.

Previous wording

We are in the early stages of executing a large-scale multi-year global project that is expected to significantly transform the way in which we operate our business and further enable our long-term strategic pivot toward a global direct-to-consumer-oriented model (the "Next Generation Transformation project" or "NGT project"). The NGT project will be completed in phases and involves the redesigning of certain end-to-end processes and the implementation of a suite of information systems on a global scale. Such efforts are expected to result in significant process improvements and the creation of synergies across core areas of operations, including merchandise buying and planning, procurement, inventory management, retail and wholesale operations, and financial planning and reporting, better enabling us to optimize inventory levels and increase the speed to which we can react to changes in consumer demand across markets, among other benefits.

Current wording

We are in the early stages of executing a large-scale, multi-year global project that is expected to significantly transform the way in which we operate our business and further enable our long-term strategic pivot towards a global direct-to-consumer-oriented model (the "Next Generation Transformation project" or "NGT project"). The NGT project will be completed in phases and involves the redesigning of certain end-to-end processes and the implementation of a suite of technology systems on a global scale. Such efforts are expected to result in significant process improvements and the creation of synergies across core areas of operations, including merchandise buying and planning, procurement, inventory management, retail and wholesale operations, and financial planning and reporting, better enabling us to optimize inventory levels and increase the speed with which we react to changes in consumer demand across markets, among other benefits.

Previous wording

In connection with the preliminary phase of the NGT project, we incurred other charges of $5.1 million during Fiscal 2024, which were recorded within restructuring and other charges, net in the consolidated statements of operations.

Current wording

In connection with the preliminary phase of the NGT project, we incurred other charges of $25.2 million and $5.1 million during Fiscal 2025 and Fiscal 2024, respectively, which were recorded within restructuring and other charges, net in the consolidated statements of operations.

Previous wording

The global economy and retail industry are impacted by many different factors. Changes in economic conditions, most notably persisting inflationary pressures (including increases in the cost of raw materials, transportation, and salaries & benefits), high interest rates, significant foreign currency volatility, bank failures, and concerns of a potential recession, continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond. In response to such pressures, as well as in an effort to reduce elevated inventory levels, many retailers (particularly in the U.S.) have become increasingly more promotional in an attempt to offset traffic declines and increase conversion. The future geopolitical landscape also remains particularly uncertain, with over 60 countries scheduled to hold national elections during 2024, including the U.S. presidential election in November. Any resulting changes in international trade relations, legislation and regulations (including those related to taxation and importation), or economic and monetary policies, or heightened diplomatic tensions or political and civil unrest, among other potential impacts, could adversely impact the global economy and our operating results.

Current wording

Other recent economic conditions, including ongoing inflationary pressures, organized labor disputes, high interest rates, significant foreign currency volatility, and military conflicts (as discussed below), continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond. In response to such pressures, as well as to reduce elevated inventory levels, many retailers (particularly in the U.S.) continue to resort to promotional activity in an attempt to offset traffic declines and increase conversion. Furthermore, the department store sector has also experienced consolidations, restructurings, bankruptcies, and other ownership changes in recent times, as well as an increase in store closures.

Previous wording

The global economy has also been negatively impacted by ongoing military conflicts taking place in various parts of the world, most notably the Russia-Ukraine and Israel-Hamas wars, other recent hostilities in the Middle East, and militant attacks on cargo vessels in the Red Sea. Although our voluntary decision to suspend operations in Russia has not resulted in a material impact to our consolidated financial statements and our ongoing operations in Israel are also not material, our business has been, and may continue to be, impacted by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and volatility in financial markets, among other factors, which have adversely impacted consumer sentiment and confidence. Although our business has not been significantly impacted by the recent Red Sea crisis, it could lead to shipping delays, inventory shortages, and/or higher freight costs in the near future and beyond. It is not clear at this time how long these conflicts will endure, or if they will escalate further with additional countries declaring war against each other, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global recession.

Current wording

The global economy has also been negatively impacted by ongoing military conflicts, including the Russia-Ukraine and Israel-Hamas wars, militant attacks on cargo vessels in the Red Sea, and other hostilities in the Middle East. Although our voluntary decision to suspend operations in Russia has not resulted in a material impact to our consolidated financial statements and our ongoing operations in Israel are also not material, our business has been, and may continue to be, affected by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and financial market volatility, among other factors, which have adversely impacted consumer sentiment and confidence. It is not clear at this time how long these conflicts will endure, or if they will escalate further with additional countries declaring war against each other, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global recession.

Previous wording

We have implemented various strategies globally to help address many of these current challenges and continue to build a foundation for long-term profitable growth centered around strengthening our consumer-facing areas of product, stores, and marketing across channels and driving a more efficient operating model. Our strategy for mitigating inflationary pressures includes numerous levers, including our commitment to driving average unit retail growth, leveraging our diversified supply chain and strong supplier relationships, elevating our product sustainability efforts, and leveraging our in-house quality control to reduce time and cost from the manufacturing process, among other efforts. We have also taken earlier receipts of inventory and strategically utilize faster means of transportation when necessary to maximize full-price selling windows. While we remain agile and mindful of the increasing competitive promotional environment, we plan to continue driving our broader long-term strategy of brand elevation, which includes multiple levers to continue driving average unit retail growth and brand equity.

Current wording

We have implemented various global strategies to address many of these challenges and continue to build a foundation for long-term profitable growth by strengthening our consumer-facing areas and driving a more efficient operating model. We continue to monitor the current geopolitical landscape, including the potential impact of higher tariffs should they become effective. We have taken proactive measures in recent years to diversify our supply chain from a geographic perspective and believe we can further mitigate potential cost pressures associated with new tariffs through a combination of our disciplined inventory management, leveraging our relationships with suppliers to reduce product costs, our ability to change country of origin, and pricing actions. However, should the proposed tariffs become effective, our profitability will be negatively impacted. Regarding mitigating inflationary pressures, our strategy includes numerous levers, including our ability to effectively increase prices, leveraging our diversified supply chain and strong supplier relationships, and leveraging our in-house quality control to reduce time and cost from the manufacturing process, among other efforts. Despite the competitive environment, we plan to continue driving our broader long-term strategy of brand elevation, which includes multiple levers to continue driving average unit retail growth and brand equity.

Previous wording

We will continue to monitor these conditions and trends and will evaluate and adjust our operating strategies and foreign currency and cost management opportunities to help mitigate the related impacts on our results of operations, while remaining focused on the long-term growth of our business and protecting and elevating the value of our brand.

Current wording

We will continue to monitor these conditions and trends and adjust our operating strategies to help mitigate the related impacts on our results of operations, while remaining focused on the long-term growth of our business and protecting and elevating the value of our brand.

Previous wording

In Fiscal 2024, we reported net revenues of $6.631 billion, net income of $646.3 million, and net income per diluted share of $9.71, as compared to net revenues of $6.444 billion, net income of $522.7 million, and net income per diluted share of $7.58 in Fiscal 2023. The comparability of our operating results has been affected by net restructuring-related charges, impairment of assets, and certain other benefits (charges), as well as non-recurring income tax events. We also continue to experience varying degrees of business disruptions resulting from the current macroeconomic environment, including inflationary pressures, ongoing military conflicts taking place in various parts of the world, and foreign currency volatility, among other factors.

Current wording

In Fiscal 2025, we reported net revenues of $7.079 billion, net income of $742.9 million, and net income per diluted share of $11.61, as compared to net revenues of $6.631 billion, net income of $646.3 million, and net income per diluted share of $9.71 in Fiscal 2024. The comparability of our operating results has been affected by net restructuring-related charges, impairment of assets, and certain other charges (benefits), as well as foreign currency volatility. Our operating results are also susceptible to changes in macroeconomic conditions.

Previous wording

Our operating performance for Fiscal 2024 reflected revenue increases of 2.9% on a reported basis and 2.7% on a constant currency basis, as defined within "Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition" below. Net revenue growth was led by our international businesses.

Current wording

Our operating performance for Fiscal 2025 reflected revenue increases of 6.8% on a reported basis and 7.7% on a constant currency basis, as defined within "Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition" below. Net revenues reflected growth across all of our reportable segments.

Previous wording

Our gross profit as a percentage of net revenues increased by 220 basis points to 66.8% during Fiscal 2024, primarily driven by lower freight costs, favorable geographic and channel mix, higher average unit retail ("AUR"), and lower non-routine inventory charges recorded during Fiscal 2024 as compared to the prior fiscal year, all partially offset by higher product costs and unfavorable foreign currency effects.

Current wording

Our gross profit as a percentage of net revenues increased by 180 basis points to 68.6% during Fiscal 2025, primarily driven by the favorable geographic, channel, and product mix, average unit retail ("AUR") growth, and lower cotton costs, more than offsetting incremental pressure from non-cotton product costs and unfavorable foreign currency effects.

Previous wording

Net income increased by $123.6 million to $646.3 million in Fiscal 2024 as compared to Fiscal 2023, primarily due to a $52.2 million increase in our operating income and higher interest income of $40.8 million, as well as a $38.1 million decrease in our income tax provision. Net income per diluted share increased by $2.13 to $9.71 per share during Fiscal 2024 driven by the higher level of net income and lower weighted-average diluted shares outstanding.

Current wording

Net income increased by $96.6 million to $742.9 million in Fiscal 2025 as compared to Fiscal 2024, primarily due to a $175.7 million increase in our operating income, partially offset by a $76.7 million increase in our income tax provision. Net income per diluted share increased by $1.90 to $11.61 per share during Fiscal 2025 driven by the higher level of net income and lower weighted-average diluted shares outstanding.

Previous wording

During Fiscal 2024 and Fiscal 2023, our operating results were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $69.9 million and $66.0 million, respectively, which had an after-tax effect of reducing net income by $52.6 million, or $0.80 per diluted share, and $52.9 million, or $0.76 per diluted share, respectively. Net income during Fiscal 2024 also reflected an income tax benefit of $13.1 million, or $0.20 per diluted share, recorded in connection with non-recurring income tax events.

Current wording

During Fiscal 2025 and Fiscal 2024, our operating results were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $57.8 million and $69.9 million, respectively, which had an after-tax effect of reducing net income by $46.0 million, or $0.72 per diluted share, and $52.6 million, or $0.80 per diluted share, respectively. Net income during Fiscal 2024 also reflected an income tax benefit of $13.1 million, or $0.20 per diluted share, recorded in connection with non-recurring income tax events.

Previous wording

We ended Fiscal 2024 in a net cash and short-term investments position (calculated as cash and cash equivalents, plus short-term investments, less total debt) of $642.7 million, as compared to $427.2 million as of the end of Fiscal 2023. The increase in our net cash and short-term investments position during Fiscal 2024 as compared to Fiscal 2023 was primarily due to our operating cash flows of $1.070 billion, partially offset by our use of cash to support Class A common stock repurchases of $449.7 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to make dividend payments of $194.6 million, and to invest in our business through $164.8 million in capital expenditures.

Current wording

We ended Fiscal 2025 in a net cash and short-term investments position (calculated as cash and cash equivalents, plus short-term investments, less total debt) of $940.4 million, as compared to $642.7 million as of the end of Fiscal 2024. The increase in our net cash and short-term investments position during Fiscal 2025 as compared to Fiscal 2024 was primarily due to our operating cash flows of $1.235 billion, partially offset by our use of cash to support Class A common stock repurchases of $480.9 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $216.2 million in capital expenditures, and to make dividend payments of $201.1 million.

Previous wording

Net cash provided by operating activities was $1.070 billion during Fiscal 2024, as compared to $411.0 million during Fiscal 2023. The net increase in cash provided by operating activities was due to a net favorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year, as well as an increase in net income before non-cash charges.

Current wording

Net cash provided by operating activities was $1.235 billion during Fiscal 2025, as compared to $1.070 billion during Fiscal 2024. The net increase in cash provided by operating activities was due to an increase in net income before non-cash charges, as well as a net favorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year.

Previous wording

Our equity increased to $2.450 billion as of March 30, 2024, compared to $2.431 billion as of April 1, 2023 due to our comprehensive income and the net impact of stock-based compensation arrangements, partially offset by our share repurchase activity and dividends declared during Fiscal 2024.

Current wording

Our equity increased to $2.589 billion as of March 29, 2025, compared to $2.450 billion as of March 30, 2024 due to our comprehensive income and the net impact of stock-based compensation arrangements, partially offset by our share repurchase activity and dividends declared during Fiscal 2025.

Previous wording

(a)Non-routine inventory benefits (charges) are recorded within cost of goods sold in the consolidated statements of operations. The benefits recorded during Fiscal 2024 primarily related to reversals of amounts previously recognized in connection with delays in U.S. customs shipment reviews and approvals (approximately $3 million) and the COVID-19 pandemic (approximately $2 million). Non-routine inventory charges, net recorded during Fiscal 2023 primarily related to the Russia-Ukraine war (approximately $10 million) and delays in U.S. customs shipment reviews and approvals (approximately $5 million). Non-routine inventory benefits, net recorded during Fiscal 2022 related to COVID-19-related reserves.

Current wording

(a)Non-routine inventory benefits (charges) are recorded within cost of goods sold in the consolidated statements of operations. The benefits recorded during Fiscal 2024 primarily related to reversals of amounts previously recognized in connection with delays in U.S. customs shipment reviews and approvals (approximately $3 million) and the COVID-19 pandemic (approximately $2 million). Non-routine inventory charges, net recorded during Fiscal 2023 primarily related to the Russia-Ukraine war (approximately $10 million) and delays in U.S. customs shipment reviews and approvals (approximately $5 million).

Previous wording

(b)Non-routine bad debt reversals (expense), net are recorded within SG&A expenses in the consolidated statements of operations. Non-routine bad debt reversals, net recorded during Fiscal 2024 and Fiscal 2023 primarily related to charges previously recognized in connection with the Russia-Ukraine war. Non-routine bad debt expense, net recorded during Fiscal 2022 related to the Russia-Ukraine war (approximately $3 million), partially offset by COVID-19-related bad debt reversals (approximately $1 million).

Current wording

(b)Non-routine bad debt expense reversals are recorded within SG&A expenses in the consolidated statements of operations. Non-routine bad debt reversals, net recorded during Fiscal 2024 and Fiscal 2023 primarily related to charges previously recognized in connection with the Russia-Ukraine war.

Previous wording

•a one-time tax benefit of $13.1 million recorded within our income tax provision during Fiscal 2024 in connection with Swiss tax reform and the European Union's anti-tax avoidance directive, which decreased our effective tax rate by 170 basis points. See Note 10 to the accompanying consolidated financial statements for further discussion;

Current wording

•a one-time tax benefit of $13.1 million recorded within our income tax provision during Fiscal 2024 in connection with Swiss tax reform and the European Union's anti-tax avoidance directive, which decreased our Fiscal 2024 effective tax rate by 170 basis points. See Note 10 to the accompanying consolidated financial statements for further discussion.

Previous wording

The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions. All percentages shown in the below table and the discussion that follows have been calculated using unrounded numbers.

Current wording

The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.

Previous wording

Our global average store count increased by 90 stores and concession shops during Fiscal 2023 compared with the prior fiscal year, driven by new openings primarily in Asia. The following table details our retail store presence by segment as of the periods presented:

Current wording

Our global average store count decreased by 20 stores and concession shops during Fiscal 2025 compared with the prior fiscal year, largely driven by concession shop closures in Asia and lower-tierd outlet store closures in North America. The following table details our retail store presence by segment as of the periods presented:

Previous wording

In addition to our stores, we sell products online in North America, Europe, and Asia through our various digital commerce sites, as well as through our Ralph Lauren app in the U.S. We also sell products online through various third-party digital partner commerce sites, primarily in Asia.

Current wording

In addition to our stores, we sell products online in North America, Europe, and Asia through our various digital commerce sites, as well as through our Polo mobile apps in the U.S. We also sell products online through various third-party digital partner commerce sites, primarily in Asia.

Previous wording

This increase was partially offset by:

Current wording

This increase was partially offset by an $18.9 million decline related to our North America wholesale business primarily driven by reduced excess inventory sales in the off-price wholesale channel.

Previous wording

The $58.5 million increase in Europe net revenues was driven by:

Current wording

The $206.9 million increase in Europe net revenues was driven by:

Previous wording

The $139.9 million increase in Asia net revenues was driven by:

Current wording

The $142.8 million increase in Asia net revenues was driven by:

Previous wording

•a $25.2 million increase related to our Asia wholesale business, reflecting increases most notably in Japan, South Korea, and Australia, partially offset by unfavorable foreign currency effects of $9.4 million.

Current wording

This increase was partially offset by a $25.0 million decline related to our Asia wholesale business, largely driven by decreases in South Korea and Japan.

Previous wording

Selling, General, and Administrative Expenses. SG&A expenses include costs relating to compensation and benefits, rent and occupancy, marketing and advertising, distribution, information technology, legal, depreciation and amortization, bad debt, and other selling and administrative costs. SG&A expenses increased by $191.6 million, or 5.6%, to $3.600 billion in Fiscal 2024, including favorable foreign currency effects of $11.4 million. SG&A expenses as a percentage of net revenues increased to 54.3% in Fiscal 2024 from 52.9% in Fiscal 2023. The 140 basis point increase was largely attributable to geographic and channel mix resulting from growth of our international and retail businesses which typically carry higher operating expense margins.

Current wording

Selling, General, and Administrative Expenses. SG&A expenses include costs relating to compensation and benefits, marketing and advertising, rent and occupancy, distribution, information technology, legal, depreciation and amortization, bad debt, and other selling and administrative costs. SG&A expenses increased by $262.5 million, or 7.3%, to $3.863 billion in Fiscal 2025, including favorable foreign currency effects of $30.8 million. SG&A expenses as a percentage of net revenues increased to 54.6% in Fiscal 2025 from 54.3% in Fiscal 2024. The 30 basis point increase was largely attributable to geographic and channel mix resulting from growth of our international and retail businesses which typically carry higher operating expense margins, as well as increases across various expense categories, including higher compensation-related expenses and marketing investments due to planned key campaign events.

Previous wording

The $103.3 million increase in SG&A expenses was driven by:

Current wording

The $262.5 million increase in SG&A expenses was driven by:

Previous wording

Restructuring and Other Charges, Net. During Fiscal 2023 and Fiscal 2022, we recorded net restructuring charges and benefits of $19.2 million and $4.0 million, respectively, primarily consisting of severance and benefits costs (reversals) and restructuring-related other charges, as well as other charges of $23.8 million and $11.8 million, respectively, primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired. Additionally, during Fiscal 2023 and Fiscal 2022, we recognized income of $3.5 million and $4.0 million, respectively, related to consideration received from Regent in connection with our previously sold Club Monaco business. We donated this income to The Ralph Lauren Corporate Foundation, which resulted in related offsetting donation expenses of $3.5 million and $4.0 million during Fiscal 2023 and Fiscal 2022, respectively. We also recorded charges of $6.4 million during Fiscal 2022 in connection with non-income-related capital taxes resulting from Swiss tax reform. See Note 9 to the accompanying consolidated financial statements.

Current wording

Restructuring and Other Charges, Net. During Fiscal 2025 and Fiscal 2024, we recorded net restructuring charges of $20.4 million and $55.8 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $11.4 million and $14.0 million, respectively, primarily related to rent and occupancy costs associated with certain previously exited real estate locations in connection with our restructuring activities for which the related lease agreements have not yet expired. In addition, during Fiscal 2025 and Fiscal 2024, we recorded other charges of $25.2 million and $5.1 million, respectively, in connection with our Next Generation Transformation project (refer to"Recent Developments" for additional discussion) and recorded other income of $2.8 million and $7.0 million, respectively, related to consideration received from Regent, L.P. in connection with our previously sold Club Monaco business. We donated this income to The Ralph Lauren Corporate Foundation, a non-profit, charitable foundation, which resulted in related offsetting donation expenses of $2.8 million and $7.0 million during Fiscal 2025 and Fiscal 2024, respectively. See Note 9 to the accompanying consolidated financial statements.

Previous wording

Operating Income. Operating income decreased by $94.2 million, or 11.8%, to $704.2 million during Fiscal 2023, reflecting unfavorable foreign currency effects of $164.5 million. Our operating results during Fiscal 2023 and Fiscal 2022 were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $66.0 million and $32.6 million, respectively. Operating income as a percentage of net revenues was 10.9% in Fiscal 2023, reflecting a 190 basis point decline from Fiscal 2022. The decline in operating income as a percentage of net revenues was primarily driven by the decrease in our gross margin and higher net restructuring-related charges, impairment of assets, and certain other charges (benefits) recorded during Fiscal 2023 as compared to the prior fiscal year, partially offset by the decline in SG&A expenses as a percentage of net revenues, all as previously discussed.

Current wording

Operating Income. Operating income increased by $175.7 million, or 23.2%, to $932.1 million during Fiscal 2025, reflecting unfavorable foreign currency effects of $32.0 million. Our operating results during Fiscal 2025 and Fiscal 2024 were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $57.8 million and $69.9 million, respectively. Operating income as a percentage of net revenues was 13.2% in Fiscal 2025, reflecting a 180 basis point improvement from Fiscal 2024. The improvement in operating income as a percentage of net revenues was primarily driven by the increase in our gross margin, as well as lower net restructuring-related charges and certain other charges (benefits) recorded during Fiscal 2025 as compared to the prior fiscal year, partially offset by the increase in SG&A expenses as a percentage of net revenues, all as previously discussed.

Previous wording

Net Income. Net income decreased to $522.7 million in Fiscal 2023, from $600.1 million in Fiscal 2022. The $77.4 million decrease in net income was primarily due to the decline in our operating income, partially offset by a decline in non-operating expense, net, both as previously discussed. Our operating results during Fiscal 2023 and Fiscal 2022 were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $66.0 million and $32.6 million, respectively, which had an after-tax effect of reducing net income by $52.9 million and $23.2 million, respectively. Our net income during Fiscal 2022 reflected the favorable impact of the inclusion of the 53rd week, which increased net income by $16.5 million.

Current wording

Net Income. Net income increased to $742.9 million in Fiscal 2025, from $646.3 million in Fiscal 2024. The $96.6 million increase in net income was primarily due to an increase in our operating income, partially offset by an increase in our income tax provision, both as previously discussed. Our operating results during Fiscal 2025 and Fiscal 2024 were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $57.8 million and $69.9 million, respectively, which had an after-tax effect of reducing net income by $46.0 million and $52.6 million, respectively. Net income during Fiscal 2024 also reflected an income tax benefit of $13.1 million recorded in connection with Swiss tax reform and the European Union's anti-tax avoidance directive, as previously discussed.

Previous wording

Net Income per Diluted Share. Net income per diluted share decreased to $7.58 in Fiscal 2023, from $8.07 in Fiscal 2022. The $0.49 per share decrease was driven by the lower level of net income, as previously discussed, partially offset by lower weighted-average diluted shares outstanding during Fiscal 2023 driven by our share repurchases during the preceding twelve months. Net income per diluted share for Fiscal 2023 and Fiscal 2022 were also negatively impacted by $0.76 per share and $0.31 per share respectively, attributable to net restructuring-related charges, impairment of assets, and certain other charges (benefits), as previously discussed. Net income per diluted share during Fiscal 2022 reflected the favorable impact of the inclusion of the 53rd week, which increased net income per diluted share by $0.22 per share.

Current wording

Net Income per Diluted Share. Net income per diluted share increased to $11.61 in Fiscal 2025, from $9.71 in Fiscal 2024. The $1.90 per share increase was primarily driven by the higher level of net income, as previously discussed, and lower weighted-average diluted shares outstanding during Fiscal 2025 driven by our share repurchases during the last twelve months. Net income per diluted share for Fiscal 2025 and Fiscal 2024 were also negatively impacted by $0.72 per share and $0.80 per share, respectively, attributable to net restructuring-related charges, impairment of assets, and certain other charges (benefits), as previously discussed. Net income per diluted share during Fiscal 2024 was also favorably impacted by $0.20 due to an income tax benefit recorded in connection with Swiss tax reform and the European Union's anti-tax avoidance directive, as previously discussed.

Previous wording

The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions. All percentages shown in the below table and the discussion that follows have been calculated using unrounded numbers.

Current wording

The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions. All percentages shown in the table below and the discussion that follows have been calculated using unrounded numbers.

Previous wording

In addition to our stores, we sold products online in North America, Europe, and Asia through our various digital commerce sites, as well as through our Ralph Lauren app in the U.S. We also sold products online through various third-party digital partner commerce sites, primarily in Asia.

Current wording

In addition to our stores, we sold products online in North America, Europe, and Asia through our various digital commerce sites, as well as through our Polo mobile apps in the U.S. We also sold products online through various third-party digital partner commerce sites, primarily in Asia.

Previous wording

•a $113.3 million decline related to our North America wholesale business as we carefully manage sell-ins to our wholesale customers to better align with consumer demand, as well as the return to a more normalized timing of shipments following last year's supply chain disruption.

Current wording

•a $113.3 million decline related to our North America wholesale business as we carefully managed sell-ins to our wholesale customers to better align with consumer demand, as well as the return to a more normalized timing of shipments following the prior year's supply chain disruption.

Previous wording

•a $43.3 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $44.3 million, reflecting increases of $35.9 million in comparable store sales and $8.4 million in non-comparable store sales. The following table summarizes the percentage change in comparable store sales related to our North America retail business:

Current wording

•a $43.3 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $44.3 million, reflecting increases of $35.9 million in comparable store sales and $8.4 million in non-comparable store sales. The increase in our comparable store sales reflected high-single digit AUR growth during Fiscal 2024 as compared to Fiscal 2023, as well as higher traffic. The following table summarizes the percentage changes in comparable store sales related to our North America retail business: