RALPH LAUREN CORP

Previous wording

In this Form 10-Q, references to "Ralph Lauren," "ourselves," "we," "our," "us," and the "Company" refer to Ralph Lauren Corporation and its subsidiaries, unless the context indicates otherwise. We utilize a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year 2026 will end on March 28, 2026 and will be a 52-week period ("Fiscal 2026"). Fiscal year 2025 ended on March 29, 2025 and was also a 52-week period ("Fiscal 2025"). The first quarter of Fiscal 2026 ended on June 28, 2025 and was a 13-week period. The first quarter of Fiscal 2025 ended on June 29, 2024 and was also a 13-week period.

Current wording

In this Form 10-Q, references to "Ralph Lauren," "ourselves," "we," "our," "us," and the "Company" refer to Ralph Lauren Corporation and its subsidiaries, unless the context indicates otherwise. We utilize a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year 2026 will end on March 28, 2026 and will be a 52-week period ("Fiscal 2026"). Fiscal year 2025 ended on March 29, 2025 and was also a 52-week period ("Fiscal 2025"). The second quarter of Fiscal 2026 ended on September 27, 2025 and was a 13-week period. The second quarter of Fiscal 2025 ended on September 28, 2024 and was also a 13-week period.

Previous wording

•Overview. This section provides a general description of our business, global economic conditions and industry trends, and a summary of our financial performance for the three-month period ended June 28, 2025. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our results of operations and financial condition, and in anticipating future trends.

Current wording

•Overview. This section provides a general description of our business, global economic conditions and industry trends, and a summary of our financial performance for the three-month and six-month periods ended September 27, 2025. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our results of operations and financial condition, and in anticipating future trends.

Previous wording

•Results of operations. This section provides an analysis of our results of operations for the three-month period ended June 28, 2025 as compared to the three-month period ended June 29, 2024.

Current wording

•Results of operations. This section provides an analysis of our results of operations for the three-month and six-month periods ended September 27, 2025 as compared to the three-month and six-month periods ended September 28, 2024.

Previous wording

•Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of June 28, 2025, which includes (i) an analysis of our financial condition as compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for the three months ended June 28, 2025 as compared to the three months ended June 29, 2024; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, our supplier finance program, outstanding debt and covenant compliance, common stock repurchases, and payments of dividends; and (iv) a description of any material changes in our material cash requirements since March 29, 2025.

Current wording

•Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of September 27, 2025, which includes (i) an analysis of our financial condition as compared to the prior fiscal year-end; (ii) an analysis of changes in our cash flows for the six months ended September 27, 2025 as compared to the six months ended September 28, 2024; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, our supplier finance program, outstanding debt and covenant compliance, common stock repurchases, and payments of dividends; and (iv) a description of any material changes in our material cash requirements since March 29, 2025.

Previous wording

Our business is typically affected by seasonal trends, with higher levels of retail sales in our second and third fiscal quarters and higher wholesale sales in our second and fourth fiscal quarters. These trends result primarily from the timing of key vacation travel, back-to-school, and holiday shopping periods impacting our retail business and timing of seasonal wholesale shipments. As a result of changes in our business, consumer spending patterns, and the macroeconomic environment, including those resulting from pandemic diseases and other catastrophic events, historical quarterly operating trends and working capital requirements may not be indicative of our future performance. In addition, fluctuations in sales, operating income (loss), and cash flows in any fiscal quarter may be affected by other events affecting retail sales, such as changes in weather patterns. Accordingly, our operating results and cash flows for the three-month period ended June 28, 2025 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal 2026.

Current wording

Our business is typically affected by seasonal trends, with higher levels of retail sales in our second and third fiscal quarters and higher wholesale sales in our second and fourth fiscal quarters. These trends result primarily from the timing of key vacation travel, back-to-school, and holiday shopping periods impacting our retail business and timing of seasonal wholesale shipments. As a result of changes in our business, consumer spending patterns, and the macroeconomic environment, including those resulting from pandemic diseases and other catastrophic events, historical quarterly operating trends and working capital requirements may not be indicative of our future performance. In addition, fluctuations in sales, operating income (loss), and cash flows in any fiscal quarter may be affected by other events affecting retail sales, such as changes in weather patterns. Accordingly, our operating results and cash flows for the three-month and six-month periods ended September 27, 2025 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal 2026.

Previous wording

In connection with the preliminary phase of the NGT project, we incurred other charges of $11.0 million and $2.3 million during the three-month periods ended June 28, 2025 and June 29, 2024, respectively, 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 $25.7 million and $36.7 million during the three-month and six-month periods ended September 27, 2025, respectively, and $5.7 million and $8.0 million during the three-month and six-month periods ended September 28, 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 factors beyond our control. Most recently, the U.S. announced significant changes to its trade policies, including widespread tariff increases on imported goods, with potential further increases and revisions or terminations to existing trade agreements. In response, many countries have announced or are otherwise considering retaliatory tariffs on U.S. exports and other trade restrictions. This has led to significant uncertainty regarding the future relationship between the U.S. and other countries, as well as growing concerns about a global trade war, higher inflation, and a potential global recession, which has already caused significant volatility of global stock markets and foreign currency exchange rates. In addition, the U.S. signed into law tax legislation commonly referred to as the One Big Beautiful Bill Act in July 2025, which extends many of the provisions of the Tax Cuts and Jobs Act of 2017, as well as introduces certain other new provisions.

Current wording

The global economy and retail industry are impacted by many factors beyond our control. Most recently, the U.S. announced significant changes to its trade policies, including widespread tariff increases on imported goods, with potential further increases and revisions or terminations to existing trade agreements. In response, many countries have announced or are otherwise considering retaliatory tariffs on U.S. exports and other trade restrictions. This has led to significant uncertainty regarding the future relationship between the U.S. and other countries, as well as concerns about a global trade war, higher inflation, and a potential global recession, which has already caused significant volatility of global stock markets and foreign currency exchange rates. In addition, the U.S. signed into law tax legislation commonly referred to as the One Big Beautiful Bill Act in July 2025, which extends many of the provisions of the Tax Cuts and Jobs Act of 2017, as well as introduces certain other new provisions.

Previous wording

During the three months ended June 28, 2025, we reported net revenues of $1.719 billion, net income of $220.4 million, and net income per diluted share of $3.52, as compared to net revenues of $1.512 billion, net income of $168.6 million, and net income per diluted share of $2.61 during the three months ended June 29, 2024. The comparability of our operating results has been affected by net restructuring-related charges and certain other charges (benefits), as well as foreign currency volatility. Our operating results are also susceptible to changes in macroeconomic conditions.

Current wording

During the three months ended September 27, 2025, we reported net revenues of $2.011 billion, net income of $207.5 million, and net income per diluted share of $3.32, as compared to net revenues of $1.726 billion, net income of $147.9 million, and net income per diluted share of $2.31 during the three months ended September 28, 2024. During the six months ended September 27, 2025, we reported net revenues of $3.730 billion, net income of $427.9 million, and net income per diluted share of $6.85, as compared to net revenues of $3.238 billion, net income of $316.5 million, and net income per diluted share of $4.93 during the six months ended September 28, 2024. The comparability of our operating results has been affected by net restructuring-related charges 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 the three-month period ended June 28, 2025 as compared to the prior fiscal year period reflected revenue increases of 13.7% on a reported basis and 11.4% 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.

Current wording

Our operating performance for the three-month and six-month periods ended September 27, 2025 as compared to the prior fiscal year periods reflected revenue growth of 16.5% and 15.2%, respectively, on a reported basis and 14.0% and 12.8%, respectively, 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 180 basis points to 72.3% during the three months ended June 28, 2025 as compared to the prior fiscal year period, primarily driven by average unit retail ("AUR") growth, favorable foreign currency effects, favorable channel and geographic mix, and lower cotton costs, more than offsetting incremental pressure from tariffs and non-cotton products costs.

Current wording

Our gross profit as a percentage of net revenues increased by 100 basis points to 68.0% during the three months ended September 27, 2025 and by 130 basis points to 69.9% during the six months ended September 27, 2025, as compared to the prior fiscal year periods, primarily driven by average unit retail ("AUR") growth, favorable product mix, favorable foreign currency effects, and lower cotton costs, more than offsetting pressure from tariffs and non-cotton products costs.

Previous wording

Selling, general, and administrative ("SG&A") expenses as a percentage of net revenues during the three months ended June 28, 2025 declined by 100 basis points to 55.2% as compared to the prior fiscal year period, largely attributable to operating leverage on higher net revenues despite higher marketing investments and variable selling expenses.

Current wording

Selling, general, and administrative ("SG&A") expenses as a percentage of net revenues during the three months ended September 27, 2025 declined by 160 basis points to 53.9% and by 130 basis points to 54.5% during the six months ended September 27, 2025 as compared to the prior fiscal year periods, largely attributable to operating leverage on higher net revenues despite higher compensation-related expenses, marketing investments, and variable selling expenses.

Previous wording

Net income increased by $51.8 million to $220.4 million during the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, primarily due to a $65.1 million increase in our operating income, partially offset by a $9.6 million increase in our income tax provision. Net income per diluted share increased by $0.91 to $3.52 per share during the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, driven by the higher level of net income and lower weighted-average diluted shares outstanding.

Current wording

Net income increased by $59.6 million to $207.5 million during the three months ended September 27, 2025 as compared to the three months ended September 28, 2024, primarily due to a $66.8 million increase in our operating income, partially offset by a $12.1 million increase in non-operating expense, net. Net income per diluted share increased by $1.01 to $3.32 per share during the three months ended September 27, 2025 as compared to the three months ended September 28, 2024, primarily driven by the higher level of net income and lower weighted-average diluted shares outstanding. Net income increased by $111.4 million to $427.9 million during the six months ended September 27, 2025 as compared to the six months ended September 28, 2024, primarily due to a $131.9 million increase in our operating income, partially offset by a $15.8 million increase in non-operating expense, net. Net income per diluted share increased by $1.92 to $6.85 per share during the six months ended September 27, 2025 as compared to the six months ended September 28, 2024, driven by the higher level of net income and lower weighted-average diluted shares outstanding.

Previous wording

We ended the first quarter of Fiscal 2026 in a net cash and short-term investments position (calculated as cash and cash equivalents, plus short-term investments, less total debt) of $639.8 million, as compared to $940.4 million as of the end of Fiscal 2025. The decrease in our net cash and short-term investments position was primarily due to our use of cash to support Class A common stock repurchases of $323.3 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $187.3 million in capital expenditures, and to make dividend payments of $50.7 million, partially offset by our operating cash flows of $176.1 million and the favorable effect of exchange rate changes of $76.1 million, primarily related to our cash and cash equivalents.

Current wording

We ended the second quarter of Fiscal 2026 in a net cash and short-term investments position (calculated as cash and cash equivalents, plus short-term investments, less total debt) of $407.8 million, as compared to $940.4 million as of the end of Fiscal 2025. The decrease in our net cash and short-term investments position was primarily due to our use of cash to support Class A common stock repurchases of $435.9 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $281.1 million in capital expenditures, and to make dividend payments of $106.0 million, partially offset by our operating cash flows of $229.3 million and the favorable effect of exchange rate changes of $60.3 million, primarily related to our cash and cash equivalents.

Previous wording

Net cash provided by operating activities was $176.1 million during the three months ended June 28, 2025, as compared to $277.3 million during the three months ended June 29, 2024. The net decrease in cash provided by operating activities was due to a net unfavorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year period, partially offset by an increase in net income before non-cash charges.

Current wording

Net cash provided by operating activities was $229.3 million during the six months ended September 27, 2025, as compared to $374.5 million during the six months ended September 28, 2024. The net decrease in cash provided by operating activities was due to a net unfavorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year period, partially offset by an increase in net income before non-cash charges.

Previous wording

Our equity decreased to $2.515 billion as of June 28, 2025 compared to $2.589 billion as of March 29, 2025 due to our share repurchase activity and dividends declared during the three months ended June 28, 2025, partially offset by our comprehensive income and the net impact of stock-based compensation arrangements.

Current wording

Our equity decreased to $2.582 billion as of September 27, 2025 compared to $2.589 billion as of March 29, 2025 due to our share repurchase activity and dividends declared during the six months ended September 27, 2025, partially offset by our comprehensive income and the net impact of stock-based compensation arrangements.

Previous wording

The comparability of our operating results for the three-month periods ended June 28, 2025 and June 29, 2024 has been affected by certain events, including net restructuring-related charges and certain other charges (benefits) totaling $19.3 million and $7.4 million, respectively. See Note 7 to the accompanying consolidated financial statements.

Current wording

The comparability of our operating results for the three-month and six-month periods ended September 27, 2025 has been affected by certain transactions, including net restructuring-related charges and certain other charges (benefits) totaling $37.3 million and $56.6 million, respectively, and $18.4 million and $25.8 million during the three-month and six-month periods ended September 28, 2024, respectively. See Note 7 to the accompanying consolidated financial statements.

Previous wording

Net Revenues. Net revenues increased by $206.9 million, or 13.7%, to $1.719 billion during the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, reflecting growth across all of our reportable segments, including favorable foreign currency effects of $35.0 million. On a constant currency basis, net revenues increased by $171.9 million, or 11.4%.

Current wording

Net Revenues. Net revenues increased by $284.7 million, or 16.5%, to $2.011 billion during the three months ended September 27, 2025 as compared to the three months ended September 28, 2024, reflecting growth across all of our reportable segments, including favorable foreign currency effects of $43.1 million. On a constant currency basis, net revenues increased by $241.6 million, or 14.0%.

Previous wording

The following table summarizes the percentage change in our consolidated comparable store sales for the three months ended June 28, 2025 as compared to the prior fiscal year period:

Current wording

The following table summarizes the percentage changes in our consolidated comparable store sales for the three months ended September 27, 2025 as compared to the prior fiscal year period:

Previous wording

Our global average store count decreased by 28 stores and concession shops during the three months ended June 28, 2025 compared with the three months ended June 29, 2024, largely driven by concession shop closures 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 16 stores and concession shops during the three months ended September 27, 2025 compared with the three months ended September 28, 2024, largely driven by concession shop closures in Asia. The following table details our retail store presence by segment as of the periods presented:

Previous wording

North America net revenues — Net revenues increased by $48.0 million, or 7.9%, during the three months ended June 28, 2025 as compared to the three months ended June 29, 2024. On a constant currency basis, net revenues also increased by $48.0 million, or 7.9%.

Current wording

North America net revenues — Net revenues increased by $92.9 million, or 12.6%, during the three months ended September 27, 2025 as compared to the three months ended September 28, 2024. On a constant currency basis, net revenues also increased by $92.9 million, or 12.6%.

Previous wording

•a $44.3 million increase related to our North America retail business. On a constant currency basis, net revenues also increased by $44.3 million, reflecting an increase of $48.1 million in comparable store sales, partially offset by a decrease of $3.8 million in non-comparable store sales. The increase in our comparable store sales reflected low-teens AUR growth during the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, as well as higher traffic. The following table summarizes the percentage changes in comparable store sales related to our North America retail business:

Current wording

•a $56.5 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $56.3 million, reflecting an increase of $58.7 million in comparable store sales, partially offset by a decrease of $2.4 million in non-comparable store sales. The increase in our comparable store sales reflected low-double digit AUR growth during the three months ended September 27, 2025 as compared to the prior fiscal year period, as well as higher traffic. The following table summarizes the percentage changes in comparable store sales related to our North America retail business:

Previous wording

•a $3.7 million increase related to our North America wholesale business.

Current wording

•a $36.4 million increase related to our North America wholesale business largely driven by improved Fall selling trends and strong replenishment orders.

Previous wording

The $75.4 million increase in Europe net revenues was driven by:

Current wording

The $122.4 million increase in Europe net revenues was driven by:

Previous wording

•a $34.7 million increase related to our Europe wholesale business largely driven by stronger re-order trends and favorable foreign currency effects of $12.4 million.

Current wording

•a $75.3 million increase related to our Europe wholesale business largely driven by stronger re-order trends, a timing shift of inventory shipments from the second half of Fiscal 2026 into the second quarter, and favorable foreign currency effects of $21.4 million, which more than offset planned reductions within the off-price wholesale channel; and

Previous wording

•an $83.6 million increase related to our Asia retail business, inclusive of favorable foreign currency effects of $9.0 million. On a constant currency basis, net revenues increased by $74.6 million, reflecting increases of $56.9 million in comparable store sales and $17.7 million in non-comparable store sales. The increase in our comparable store sales reflected low-teens AUR growth during the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, as well as higher traffic. The following table summarizes the percentage changes in comparable store sales related to our Asia retail business:

Current wording

•a $64.5 million increase related to our Asia retail business, inclusive of favorable foreign currency effects of $3.4 million. On a constant currency basis, net revenues increased by $61.1 million, reflecting increases of $46.2 million in comparable store sales and $14.9 million in non-comparable store sales. The increase in our comparable store sales reflected high-teens AUR growth during the three months ended September 27, 2025 as compared to the prior fiscal year period, as well as higher traffic. The following table summarizes the percentage changes in comparable store sales related to our Asia retail business:

Previous 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 $99.5 million, or 11.7%, to $949.4 million for the three months ended June 28, 2025, including unfavorable foreign currency effects of $15.3 million. SG&A expenses as a percentage of net revenues declined to 55.2% for the three months ended June 28, 2025 from 56.2% for the three months ended June 29, 2024. The 100 basis point decline was largely attributable to operating leverage on higher net revenues despite higher marketing investments and variable selling expenses.

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 $125.0 million, or 13.0%, to $1.083 billion for the three months ended September 27, 2025, including unfavorable foreign currency effects of $16.0 million. SG&A expenses as a percentage of net revenues declined to 53.9% for the three months ended September 27, 2025 from 55.5% for the three months ended September 28, 2024. The 160 basis point improvement was largely attributable to operating leverage on higher net revenues despite higher compensation-related expenses, marketing investments, and variable selling expenses.

Previous wording

The $99.5 million increase in SG&A expenses was driven by:

Current wording

The $125.0 million increase in SG&A expenses was driven by:

Previous wording

Operating Income. Operating income increased by $65.1 million, or 31.2%, to $273.6 million for the three months ended June 28, 2025, reflecting favorable foreign currency effects of $13.5 million. Our operating results during the three-month periods ended June 28, 2025 and June 29, 2024 were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $19.3 million and $7.4 million, respectively. Operating income as a percentage of net revenues was 15.9% for the three months ended June 28, 2025, reflecting a 210 basis point increase from the prior fiscal year period. The increase in operating income as a percentage of net revenues was primarily driven by the increase in our gross margin, as well as a decline in SG&A expenses as a percentage of net revenues, partially offset by higher net restructuring-related charges and certain other charges (benefits) recorded during the three months ended June 28, 2025 as compared to the prior fiscal year period, all as previously discussed.

Current wording

Operating Income. Operating income increased by $66.8 million, or 37.3%, to $245.7 million for the three months ended September 27, 2025, reflecting favorable foreign currency effects of $17.9 million. Our operating results during the three-month periods ended September 27, 2025 and September 28, 2024 were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $37.3 million and $18.4 million, respectively. Operating income as a percentage of net revenues was 12.2% for the three months ended September 27, 2025, reflecting a 180 basis point increase from the prior fiscal year period. The increase in operating income as a percentage of net revenues was primarily driven by the increase in our gross margin, as well as the decrease in SG&A expenses as a percentage of net revenues, partially offset by the higher net restructuring-related charges and certain other charges (benefits) recorded during the three months ended September 27, 2025 as compared to the prior fiscal year period, all as previously discussed.

Previous wording

Europe operating margin improved by 120 basis points, primarily due to an increase of 210 basis points in gross margin, partially offset by an increase of 100 basis points in SG&A expenses as a percentage of net revenues. The overall improvement in operating margin was inclusive of the favorable impact of approximately 140 basis points related to foreign currency effects.

Current wording

Europe operating margin improved by 360 basis points, primarily due to an increase of 260 basis points in gross margin and a decline of 100 basis points in SG&A expenses as a percentage of net revenues. The overall improvement in operating margin was inclusive of the favorable impact of approximately 110 basis points related to foreign currency effects.

Previous wording

North America operating margin improved by 100 basis points, primarily due to a decline of 50 basis points in SG&A expense as a percentage of net revenues and an increase of 40 basis points in gross margin.

Current wording

Asia operating margin improved by 230 basis points, primarily due to an increase of 190 basis points in gross margin and a decline of 40 basis points in SG&A expenses as a percentage of net revenues.

Previous wording

Corporate expenses increased by $3.5 million to $164.8 million during the three months ended June 28, 2025 as compared to the prior fiscal year. The increase in corporate expenses was due to higher compensation-related expenses of $4.9 million, higher selling-related expenses of $3.2 million, and higher marketing and advertising expenses of $3.1 million, partially offset by higher intercompany sourcing commission of $6.2 million (which is offset at the segment level and eliminates in consolidation) and lower other expenses of $1.5 million.

Current wording

Corporate expenses increased by $40.1 million to $230.4 million during the three months ended September 27, 2025 as compared to the prior fiscal year period. The increase in corporate expenses was primarily due to higher compensation-related expenses of $41.5 million.

Previous wording

Non-operating Income (Expense), Net. Non-operating income (expense), net is comprised of interest expense, interest income, and other income (expense), net, which includes foreign currency gains (losses), equity in income (losses) from our equity-method investees, and other non-operating expenses. During the three months ended June 28, 2025, we reported non-operating income, net of $4.4 million as compared to $8.1 million during the three months ended June 29, 2024. The $3.7 million net decrease in non-operating income, net was primarily driven by a decline in interest income largely due to lower interest rates in financial markets.

Current wording

Non-operating Income (Expense), Net. Non-operating income (expense), net is comprised of interest expense, interest income, and other income (expense), net, which includes foreign currency gains (losses), equity in income (losses) from our equity-method investees, and other non-operating expenses. During the three months ended September 27, 2025, we reported non-operating expense, net, of $2.9 million as compared to non-operating income, net, of $9.2 million during the three months ended September 28, 2024. The $12.1 million increase in non-operating expense, net was driven by:

Previous wording

Net Income. Net income increased to $220.4 million for the three months ended June 28, 2025, from $168.6 million for the three months ended June 29, 2024. The $51.8 million increase in net income was primarily due to the increase in our operating income, partially offset by an increase in our income tax provision, both as previously discussed. Our operating results during the three-month periods ended June 28, 2025 and June 29, 2024 were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $19.3 million and $7.4 million, respectively, which had an after-tax effect of reducing net income by $15.4 million and $6.0 million, respectively.

Current wording

Net Income. Net income increased to $207.5 million for the three months ended September 27, 2025, from $147.9 million for the three months ended September 28, 2024. The $59.6 million increase in net income was due to the increase in our operating income, partially offset by the increase in non-operating expense, net, both as previously discussed. Our operating results during the three-month periods ended September 27, 2025 and September 28, 2024 were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $37.3 million and $18.4 million, respectively, which had an after-tax effect of reducing net income by $29.3 million and $14.2 million, respectively.

Previous wording

Net Income per Diluted Share. Net income per diluted share increased to $3.52 for the three months ended June 28, 2025, from $2.61 for the three months ended June 29, 2024. The $0.91 per share increase was primarily driven by the higher level of net income, as previously discussed, and lower weighted-average diluted shares outstanding during the three months ended June 28, 2025 driven by our share repurchases during the last twelve months. Net income per diluted share for the three-month periods ended June 28, 2025 and June 29, 2024 were also negatively impacted by $0.25 per share and $0.09 per share, respectively, attributable to net restructuring-related charges and certain other charges (benefits), as previously discussed.

Current wording

Net Income per Diluted Share. Net income per diluted share increased to $3.32 for the three months ended September 27, 2025, from $2.31 for the three months ended September 28, 2024. The $1.01 per share increase was primarily driven by the higher level of net income, as previously discussed, and lower weighted-average diluted shares outstanding during the three months ended September 27, 2025 driven by our share repurchases during the last twelve months. Net income per diluted share for the three-month periods ended September 27, 2025 and September 28, 2024 were also negatively impacted by $0.47 per share and $0.23 per share, respectively, attributable to net restructuring-related charges and certain other charges (benefits), as previously discussed.

Previous wording

The $83.1 million increase in Asia net revenues was primarily driven by:

Current wording

The $148.5 million increase in Asia net revenues was primarily driven by:

Previous wording

Gross Profit. Gross profit increased by $176.5 million, or 16.6%, to $1.242 billion for the three months ended June 28, 2025, including favorable foreign currency effects of $28.8 million. Gross profit as a percentage of net revenues increased to 72.3% for the three months ended June 28, 2025 from 70.5% for the three months ended June 29, 2024. The 180 basis point increase was primarily driven by favorable foreign currency effects of approximately 60 basis points and the favorable impact of approximately 40 basis points attributable to geographic and channel mix. The remaining 80 basis point improvement was primarily due to AUR growth of approximately mid-teens and lower cotton costs, more than offsetting incremental pressure from tariffs and non-cotton products costs.

Current wording

Gross Profit. Gross profit increased by $387.2 million, or 17.4%, to $2.609 billion for the six months ended September 27, 2025, including favorable foreign currency effects of $62.7 million. Gross profit as a percentage of net revenues increased to 69.9% for the six months ended September 27, 2025 from 68.6% for the six months ended September 28, 2024. The 130 basis point increase reflected favorable foreign currency effects of approximately 20 basis points and the favorable impact of approximately 20 basis points attributable to geographic and channel mix. The remaining 90 basis point improvement was primarily due to AUR growth of approximately low-teens, favorable product mix, and lower cotton costs, more than offsetting pressure from tariffs and non-cotton products costs.

Previous wording

Restructuring and Other Charges, Net. During the three-month periods ended June 28, 2025 and June 29, 2024, we recorded net restructuring charges of $6.4 million and $3.3 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $2.5 million and $2.8 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 the three-month periods ended June 28, 2025 and June 29, 2024, we recorded other charges of $11.0 million and $2.3 million, respectively, in connection with our Next Generation Transformation project (refer to"Recent Developments" for additional discussion), and recorded other income of $0.6 million and $1.0 million, respectively, related to consideration received from Regent, L.P. in connection with our previously sold Club Monaco business. See Note 7 to the accompanying consolidated financial statements.

Current wording

Restructuring and Other Charges, Net. During the six-month periods ended September 27, 2025 and September 28, 2024, we recorded net restructuring charges of $15.9 million and $12.3 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $5.3 million and $6.9 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 the six-month periods ended September 27, 2025 and September 28, 2024, we recorded other charges of $36.7 million and $8.0 million, respectively, in connection with our Next Generation Transformation project (refer to"Recent Developments" for additional discussion), and recorded other income of $1.3 million and $1.4 million, respectively, related to consideration received from Regent, L.P. in connection with our previously sold Club Monaco business. See Note 7 to the accompanying consolidated financial statements.

Previous wording

Asia operating margin improved by 330 basis points, primarily due to a decline of 170 basis points in SG&A expenses as a percentage of net revenues and an increase of 150 basis points in gross margin. The overall improvement in operating margin was inclusive of the unfavorable impact of approximately 80 basis points related to foreign currency effects.

Current wording

Asia operating margin improved by 280 basis points, primarily due to an increase of 170 basis points in gross margin and a decline of 110 basis points in SG&A expenses as a percentage of net revenues. The overall improvement in operating margin was inclusive of the unfavorable impact of approximately 50 basis points related to foreign currency effects.

Previous wording

The income tax provision and effective tax rate for the three months ended June 28, 2025 were $57.6 million and 20.7%, respectively, compared to $48.0 million and 22.1%, respectively, for the three months ended June 29, 2024. The $9.6 million increase in our income tax provision was primarily driven by an increase in our pretax income, partially offset by a 140 basis point decline in our effective tax rate. The decline in our effective tax rate was due to favorable tax impacts of the foreign-derived intangible income deduction and tax impacts of compensation-related adjustments, partially offset by the unfavorable impact of additional income tax reserves associated with certain income tax audits and the absence of favorable state and local credits received in the prior fiscal year period. See Note 8 to the accompanying consolidated financial statements.

Current wording

Income Tax Provision. The income tax provision and effective tax rate for the six months ended September 27, 2025 were $92.9 million and 17.8%, respectively, compared to $88.2 million and 21.8%, respectively, for the six months ended September 28, 2024. The $4.7 million increase in our income tax provision was primarily driven by an increase in our pretax income, partially offset by the 400 basis point decline in our effective tax rate. The decline in our effective tax rate was due to the favorable impact of uncertain tax positions, foreign-derived intangible income deduction, and the tax impacts of compensation-related adjustments, partially offset by the unfavorable tax impact of earnings generated in higher taxed jurisdictions when compared to the prior fiscal period and the absence of favorable state and local credits received in the prior fiscal year period. See Note 8 to the accompanying consolidated financial statements.

Previous wording

The decrease in our net cash and short-term investments position at June 28, 2025 as compared to March 29, 2025 was primarily due to our use of cash to support Class A common stock repurchases of $323.3 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $187.3 million in capital expenditures, and to make dividend payments of $50.7 million, partially offset by our operating cash flows of $176.1 million and the favorable effect of exchange rate changes of $76.1 million, primarily related to our cash and cash equivalents.

Current wording

The decrease in our net cash and short-term investments position at September 27, 2025 as compared to March 29, 2025 was primarily due to our use of cash to support Class A common stock repurchases of $435.9 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $281.1 million in capital expenditures, and to make dividend payments of $106.0 million, partially offset by our operating cash flows of $229.3 million and the favorable effect of exchange rate changes of $60.3 million, primarily related to our cash and cash equivalents.