RALPH LAUREN CORP

Previous wording

•the impact of economic, political, and other conditions on us, our customers, suppliers, vendors, and lenders, including potential business disruptions related to 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, including between Israel and Iran, and militant attacks on cargo vessels in the Red Sea, civil and political unrest, diplomatic tensions between the U.S. and other countries and any resulting anti-American sentiment, high interest rates, and bank failures, among other factors described herein;

Current wording

•the impact of economic, political, and other conditions on us, our customers, suppliers, vendors, and lenders, including potential business disruptions related to ongoing military conflicts taking place in various parts of the world, most notably the Russia-Ukraine and Israel-Hamas wars, the U.S.-Venezuela conflict, militant attacks on cargo vessels in the Red Sea, and other recent hostilities in the Middle East, civil and political unrest, diplomatic tensions between the U.S. and other countries and any resulting anti-American sentiment, high interest rates, and bank failures, among other factors described herein;

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 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.

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 third quarter of Fiscal 2026 ended on December 27, 2025 and was a 13-week period. The third quarter of Fiscal 2025 ended on December 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 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.

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 nine-month periods ended December 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 and six-month periods ended September 27, 2025 as compared to the three-month and six-month periods ended September 28, 2024.

Current wording

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

Previous 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.

Current wording

•Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of December 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 nine months ended December 27, 2025 as compared to the nine months ended December 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

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.

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 and geographies 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

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.

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 nine-month periods ended December 27, 2025 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal 2026.

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 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.

Current wording

During Fiscal 2025, we began 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 is being completed in phases and involves the redesign 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 $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.

Current wording

In connection with the current phase of the NGT project, we incurred other charges of $25.0 million and $61.7 million during the three-month and nine-month periods ended December 27, 2025, respectively, and $9.1 million and $17.1 million during the three-month and nine-month periods ended December 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 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 for new tariffs and further increases on existing tariffs in the future, as well as 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

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, such as the Israel-Iran conflict. 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 taking part, 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, the U.S.-Venezuela conflict, 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 taking part, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global recession.

Previous wording

The global supply chain has also been negatively impacted by various factors, including disruptions at U.S. ports and in the Red Sea. Although our business has not been significantly impacted by such disruptions, we have experienced some shipping delays impacting the timing of inventory receipts, and if such disruptions were to continue over a prolonged period, it could result in further inventory receipt delays and/or higher freight costs in the near-term and beyond.

Current wording

The global supply chain has also been negatively impacted by various factors, including disruptions in the Red Sea as discussed above. Although our business has not been significantly impacted by such disruptions, we have experienced some shipping delays impacting the timing of inventory receipts, and if such disruptions were to continue over a prolonged period, it could result in further inventory receipt delays and/or higher freight costs in the near-term and beyond.

Previous 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.

Current wording

During the three months ended December 27, 2025, we reported net revenues of $2.406 billion, net income of $361.6 million, and net income per diluted share of $5.82, as compared to net revenues of $2.143 billion, net income of $297.4 million, and net income per diluted share of $4.66 during the three months ended December 28, 2024. During the nine months ended December 27, 2025, we reported net revenues of $6.136 billion, net income of $789.5 million, and net income per diluted share of $12.66, as compared to net revenues of $5.382 billion, net income of $613.9 million, and net income per diluted share of $9.57 during the nine months ended December 28, 2024. The comparability of our operating results has been affected by net restructuring-related charges and certain other charges, 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 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.

Current wording

Our operating performance for the three-month and nine-month periods ended December 27, 2025 as compared to the prior fiscal year periods reflected revenue growth of 12.2% and 14.0%, respectively, on a reported basis and 10.0% and 11.7%, 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 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.

Current wording

Our gross profit as a percentage of net revenues increased by 150 basis points to 69.9% during the three months ended December 27, 2025 and by 140 basis points to 69.9% during the nine months ended December 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 product costs.

Previous 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.

Current wording

Selling, general, and administrative ("SG&A") expenses as a percentage of net revenues declined by 70 basis points to 49.0% during the three months ended December 27, 2025 and by 110 basis points to 52.3% during the nine months ended December 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 $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.

Current wording

Net income increased by $64.2 million to $361.6 million during the three months ended December 27, 2025 as compared to the three months ended December 28, 2024, primarily due to an $81.6 million increase in our operating income, partially offset by a $15.9 million increase in our income tax provision. Net income per diluted share increased by $1.16 to $5.82 per share during the three months ended December 27, 2025 as compared to the three months ended December 28, 2024, primarily driven by the higher level of net income and lower weighted-average diluted shares outstanding. Net income increased by $175.6 million to $789.5 million during the nine months ended December 27, 2025 as compared to the nine months ended

Previous wording

Our operating results during each of 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, or $0.47 per diluted share, and $14.2 million, or $0.23 per diluted share, respectively. During the six-month periods ended September 27, 2025 and September 28, 2024, our operating results were negatively impacted by net restructuring-related charges and certain other charges (benefits) totaling $56.6 million and $25.8 million, respectively, which had an after-tax effect of reducing net income by $44.7 million, or $0.71 per diluted share, and $20.2 million, or $0.31 per diluted share, respectively.

Current wording

Our operating results during each of the three-month periods ended December 27, 2025 and December 28, 2024, were negatively impacted by net restructuring-related charges and certain other charges totaling $31.8 million and $12.2 million, respectively, which had an after-tax effect of reducing net income by $25.2 million, or $0.40 per diluted share, and $10.5 million, or $0.16 per diluted share, respectively. During the nine-month periods ended December 27, 2025 and December 28, 2024, our operating results were negatively impacted by net restructuring-related charges and certain other charges totaling $88.4 million and $38.0 million, respectively, which had an after-tax effect of reducing net income by $69.9 million, or $1.12 per diluted share, and $30.7 million, or $0.48 per diluted share, respectively.

Previous 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.

Current wording

We ended the third 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 $1.013 billion, as compared to $940.4 million as of the end of Fiscal 2025. The increase in our net cash and short-term investments position was primarily due to our operating cash flows of $1.009 billion and the favorable effect of exchange rate changes of $61.9 million, primarily related to our cash and cash equivalents, partially offset by our use of cash to support Class A common stock repurchases of $473.4 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $356.7 million in capital expenditures, and to make dividend payments of $161.3 million.

Previous 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.

Current wording

Net cash provided by operating activities was $1.009 billion during the nine months ended December 27, 2025, as compared to $1.113 billion during the nine months ended December 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 $2.582 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.

Current wording

Our equity increased to $2.888 billion as of December 27, 2025 compared to $2.589 billion as of March 29, 2025 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 the nine months ended December 27, 2025.

Previous 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.

Current wording

The comparability of our operating results for the three-month and nine-month periods ended December 27, 2025 has been affected by certain transactions, including net restructuring-related charges and certain other charges totaling $31.8 million and $88.4 million, respectively, and $12.2 million and $38.0 million during the three-month and nine-month periods ended December 28, 2024, respectively. See Note 7 to the accompanying consolidated financial statements.

Previous 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%.

Current wording

Net Revenues. Net revenues increased by $262.5 million, or 12.2%, to $2.406 billion during the three months ended December 27, 2025 as compared to the three months ended December 28, 2024, reflecting growth across all of our reportable segments, including favorable foreign currency effects of $47.9 million. On a constant currency basis, net revenues increased by $214.6 million, or 10.0%.

Previous 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:

Current wording

Our global average store count increased by 1 store and concession shop during the three months ended December 27, 2025 compared with the three months ended December 28, 2024, primarily due to new full price store openings in Asia, largely offset by concession shop closures in Asia. The following table details our retail store presence by segment as of the periods presented:

Previous wording

•a $100.8 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $100.6 million, reflecting an increase of $106.8 million in comparable store sales, partially offset by a decrease of $6.2 million in non-comparable store sales. The increase in our comparable store sales reflected low-double digit AUR growth during the six 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:

Current wording

•a $52.6 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $52.1 million, reflecting increases of $49.9 million in comparable store sales and $2.2 million in non-comparable store sales. The increase in our comparable store sales reflected strong double-digit AUR growth, as well as higher traffic, during the three months ended December 27, 2025 as compared to the prior fiscal year period. The following table summarizes the percentage changes in comparable store sales related to our North America retail business:

Previous wording

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

Current wording

•a $28.0 million increase related to our North America wholesale business largely driven by improved selling trends and strong replenishment orders.

Previous wording

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

Current wording

The $72.1 million increase in Europe net revenues was driven by:

Previous 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

Current wording

•a $40.8 million increase related to our Europe wholesale business largely driven by stronger re-order trends and favorable foreign currency effects of $20.8 million, which more than offset a timing shift of inventory shipments into the first half of Fiscal 2026 and planned reductions within the off-price wholesale channel; and

Previous wording

•a $47.1 million increase related to our Europe retail business, inclusive of favorable foreign currency effects of $18.3 million. On a constant currency basis, net revenues increased by $28.8 million, reflecting increases of $23.4 million in comparable store sales and $5.4 million in non-comparable store sales. The increase in our comparable store sales reflected high-single digit AUR growth during the three months ended September 27, 2025 as compared to the prior fiscal year period. The following table summarizes the percentage changes in comparable store sales related to our Europe retail business:

Current wording

•a $31.3 million increase related to our Europe retail business, inclusive of favorable foreign currency effects of $26.0 million. On a constant currency basis, net revenues increased by $5.3 million, reflecting increases of $4.2 million in non-comparable store sales and $1.1 million in comparable store sales. The increase in our comparable store sales reflected mid-single digit AUR growth, as well as higher traffic, during the three months ended December 27, 2025 as compared to the prior fiscal year period. The following table summarizes the percentage changes in comparable store sales related to our Europe retail business:

Previous wording

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

Current wording

The $113.6 million increase in Asia net revenues was primarily driven by:

Previous 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:

Current wording

•a $111.3 million increase related to our Asia retail business, inclusive of favorable foreign currency effects of $0.7 million. On a constant currency basis, net revenues increased by $110.6 million, reflecting increases of $79.9 million in comparable store sales and $30.7 million in non-comparable store sales. The increase in our comparable store sales reflected mid-teens AUR growth, as well as higher traffic, during the three months ended December 27, 2025 as compared to the prior fiscal year period. The following table summarizes the percentage changes in comparable store sales related to our Asia retail business:

Previous wording

Gross Profit. Gross profit increased by $210.7 million, or 18.2%, to $1.366 billion for the three months ended September 27, 2025, including favorable foreign currency effects of $33.9 million. Gross profit as a percentage of net revenues increased to 68.0% for the three months ended September 27, 2025 from 67.0% for the three months ended September 28, 2024. The 100 basis point increase reflected favorable foreign currency effects of approximately 30 basis points. The remaining 70 basis point improvement was primarily due to AUR growth of approximately low-double digits, favorable product mix, and lower cotton costs, more than offsetting pressure from tariffs and non-cotton products costs.

Current wording

Gross Profit. Gross profit increased by $215.6 million, or 14.7%, to $1.682 billion for the three months ended December 27, 2025, including favorable foreign currency effects of $34.6 million. Gross profit as a percentage of net revenues increased to 69.9% for the three months ended December 27, 2025 from 68.4% for the three months ended December 28, 2024. The 150 basis point increase reflected favorable foreign currency effects of 10 basis points. The remaining 140 basis point improvement was primarily due to high-teens AUR growth, favorable product mix, and lower cotton costs, more than offsetting pressure from tariffs and non-cotton product costs.

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 $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.

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 $114.4 million, or 10.7%, to $1.179 billion for the three months ended December 27, 2025, including unfavorable foreign currency effects of $18.9 million. SG&A expenses as a percentage of net revenues declined to 49.0% for the three months ended December 27, 2025 from 49.7% for the three months ended December 28, 2024. The 70 basis point improvement was largely attributable to operating leverage on higher net revenues despite higher marketing investments, compensation-related expenses, and variable selling expenses.

Previous wording

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

Current wording

The $114.4 million increase in SG&A expenses was driven by:

Previous wording

Restructuring and Other Charges, Net. During the three-month periods ended September 27, 2025 and September 28, 2024, we recorded restructuring charges of $9.5 million and $9.0 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $2.8 million and $4.1 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. In addition, during the three-month periods ended September 27, 2025 and September 28, 2024, we recorded other charges of $25.7 million and $5.7 million, respectively, in connection with our Next Generation Transformation project (refer to"Recent Developments" for additional discussion) and other income of $0.7 million and $0.4 million during the three-month periods ended September 27, 2025 and September 28, 2024, 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 three-month periods ended December 27, 2025 and December 28, 2024, we recorded restructuring charges of $6.5 million and $1.6 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $0.8 million and $2.2 million, respectively, related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired. In addition, during the three-month periods ended December 27, 2025 and December 28, 2024, we recorded other charges of $25.0 million and $9.1 million, respectively, in connection with our Next Generation Transformation project (refer to"Recent Developments" for additional discussion) and other income of $0.5 million and $0.7 million during the three-month periods ended December 27, 2025 and December 28, 2024, 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

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.

Current wording

Operating Income. Operating income increased by $81.6 million, or 21.0%, to $471.3 million for the three months ended December 27, 2025, reflecting favorable foreign currency effects of $15.7 million. Our operating results during the three-month periods ended December 27, 2025 and December 28, 2024 were negatively impacted by net restructuring-related charges and certain other charges totaling $31.8 million and $12.2 million, respectively. Operating income as a percentage of net revenues was 19.6% for the three months ended December 27, 2025, reflecting a 140 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 recorded during the three months ended December 27, 2025 as compared to the prior fiscal year period, all as previously discussed.

Previous wording

North America operating margin improved by 290 basis points, primarily due to a decline of 360 basis points in SG&A expense as a percentage of net revenues, partially offset by decline of 70 basis points in gross margin.

Current wording

North America operating margin improved by 70 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 30 basis points in gross margin.

Previous wording

Europe operating margin improved by 250 basis points, primarily due to an increase of 240 basis points in gross margin. The overall improvement in operating margin was inclusive of the favorable impact of approximately 120 basis points related to foreign currency effects.

Current wording

Europe operating margin declined by 150 basis points, primarily due to an increase of 210 basis points in SG&A expenses as a percentage of net revenues, driven largely by the timing of marketing investments, partially offset by a 60 basis point increase in gross margin. The overall decline in operating margin was inclusive of the favorable impact of approximately 40 basis points related to foreign currency effects.

Previous wording

Corporate expenses increased by $43.6 million to $395.2 million during the six 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 $46.4 million.

Current wording

Corporate expenses decreased by $4.4 million to $192.5 million during the three months ended December 27, 2025 as compared to the prior fiscal year period. The decline in corporate expenses was due to higher intercompany sourcing commission of $9.9 million (which is offset at the segment level and eliminates in consolidation), partially offset by higher compensation-related expenses of $4.5 million and higher other charges of $1.0 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 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:

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 December 27, 2025, we reported non-operating expense, net of $7.5 million as compared to $6.0 million during the three months ended December 28, 2024. The $1.5 million increase in non-operating expense, net was driven by: