RALPH LAUREN CORP

Previous wording

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

Current wording

The following management's discussion and analysis of financial condition and results of operations ("MD&A") should be read together with our audited consolidated financial statements and notes thereto, which are included in this Annual Report on Form 10-K. We utilize a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, Fiscal 2026 ended on March 28, 2026 and was a 52-week period; Fiscal 2025 ended on March 29, 2025 and was a 52-week period; Fiscal 2024 ended on March 30, 2024 and was a 52-week period; and Fiscal 2027 will end on April 3, 2027 and will be a 53-week period.

Previous wording

•Results of operations. This section provides an analysis of our results of operations for Fiscal 2025 and Fiscal 2024 as compared to the respective prior fiscal year.

Current wording

•Results of operations. This section provides an analysis of our results of operations for Fiscal 2026 compared to Fiscal 2025.

Previous wording

•Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of March 29, 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 Fiscal 2025 and Fiscal 2024 as compared to the respective prior fiscal year; (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 summary of our material cash requirements as of March 29, 2025.

Current wording

•Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of March 28, 2026, 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 Fiscal 2026 compared to the prior fiscal year; (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 summary of our material cash requirements as of March 28, 2026.

Previous wording

Our Company is a global leader in the design, marketing, and distribution of luxury lifestyle products, including apparel, footwear & accessories, home, fragrances, and hospitality. Our long-standing reputation and distinctive image have been developed across a wide range of products, brands, distribution channels, and international markets. Our brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others.

Current wording

Our Company is a global leader in the design, marketing, and distribution of luxury lifestyle products, including apparel, handbags, footwear & accessories, fragrances, home, and hospitality. Our long-standing reputation and distinctive image have been developed across a wide range of products, brands, distribution channels, and international markets. Our brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Double RL, Polo Ralph Lauren, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others.

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

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

Current wording

•North America— Our North America segment, representing approximately 41% of our Fiscal 2026 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses primarily in the U.S. and Canada. In North America, our retail business is primarily comprised of our Ralph Lauren stores, our outlet stores, and our digital commerce sites, www.RalphLauren.com and www.RalphLauren.ca. Our wholesale business in North America is comprised primarily of sales to department stores and, to a lesser extent, specialty stores.

Previous wording

•Asia— Our Asia segment, representing approximately 24% of our Fiscal 2025 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Asia, Australia, and New Zealand. Our retail business in Asia is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. In addition, we sell our products online through various third-party digital partner commerce sites. Our wholesale business in Asia is comprised primarily of sales to department stores and various third-party digital and licensee partners.

Current wording

•Asia— Our Asia segment, representing approximately 26% of our Fiscal 2026 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our retail and wholesale businesses in Asia, Australia, and New Zealand. Our retail business in Asia is primarily comprised of our Ralph Lauren stores, our outlet stores, our concession-based shop-within-shops, and our various digital commerce sites. In addition, we sell our products online through various third-party digital partner commerce sites. Our wholesale business in Asia is comprised primarily of sales to department stores and various third-party digital and licensee partners.

Previous wording

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

Current wording

Approximately 59% of our Fiscal 2026 net revenues were earned outside of the U.S. See Note 19 to the accompanying consolidated financial statements for further discussion of our segment reporting structure.

Previous wording

We are in the early stages of executing a large-scale, multi-year global project that is expected to significantly transform the way in which we operate our business and further enable our long-term strategic pivot 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

We began a multi-year global project in Fiscal 2024 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 expected to continue over the next several years, with implementation expected to occur in phases by region and/or capability, 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, as well as 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 $25.2 million and $5.1 million during Fiscal 2025 and Fiscal 2024, respectively, which were recorded within restructuring and other charges, net in the consolidated statements of operations.

Current wording

In connection with the NGT project, we incurred other charges of $83.9 million, $25.2 million, and $5.1 million during Fiscal 2026, Fiscal 2025, and Fiscal 2024, respectively, which were recorded within restructuring and other charges, net in the consolidated statements of operations.

Previous wording

The global economy and retail industry are impacted by many uncontrollable factors. 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.

Current wording

The global economy and retail industry are impacted by many factors beyond our control. In April 2025, the U.S. announced significant changes to its trade policies under the authority of the International Emergency Economic Powers Act ("IEEPA"), 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 announced retaliatory tariffs on U.S. exports and other trade restrictions. In February 2026, the U.S. Supreme Court invalidated the IEEPA tariffs previously applied to our imports, after which a new round of tariffs was announced by the current administration under an alternative U.S. Trade Act authority. In March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection to refund IEEPA tariffs that were previously collected, and in April 2026, U.S. Customs and Border Protection announced the refund process, leveraging the Consolidated Administration and Processing of Entries Claim Portal through a phased rollout. Although we have taken steps to preserve our rights with respect to the potential refunds, there can be no assurance that we will receive any refunds, in whole or in part. These developments have also increased uncertainty regarding the future relationship between the U.S. and other countries and could contribute to a global trade war, higher inflation, and a global economic slowdown, any of which has caused, and could continue to cause, significant volatility in global stock markets and foreign currency exchange rates.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The global economy has also been negatively impacted by ongoing military conflicts, including the conflicts involving Iran and other hostilities in the Middle East. Although our ongoing operations in the Middle East are 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 oil prices and other 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 prolonged global economic slowdown or 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 and recent increases in oil and gas prices, as discussed above. Although our business has not been significantly impacted by such disruptions, we have experienced some shipping delays affecting the timing of inventory receipts. Prolonged disruptions or sustained increases in fuel prices could result in further inventory receipt delays and/or higher freight and transportation costs in the near-term and beyond.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

In Fiscal 2026, we reported net revenues of $8.115 billion, net income of $941.1 million, and net income per diluted share of $15.11, as compared to net revenues of $7.079 billion, net income of $742.9 million, and net income per diluted share of $11.61 in Fiscal 2025. 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 Fiscal 2025 reflected revenue increases of 6.8% on a reported basis and 7.7% on a constant currency basis, as defined within "Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition" below. Net revenues reflected growth across all of our reportable segments.

Current wording

Our operating performance for Fiscal 2026 reflected revenue increases of 14.6% on a reported basis and 11.8% 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 68.6% during Fiscal 2025, primarily driven by the favorable geographic, channel, and product mix, average unit retail ("AUR") growth, and lower cotton costs, more than offsetting incremental pressure from non-cotton product costs and unfavorable foreign currency effects.

Current wording

Our gross profit as a percentage of net revenues increased by 130 basis points to 69.9% during Fiscal 2026, primarily driven by average unit retail ("AUR") growth, product elevation, and favorable foreign currency effects, 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 increased by 30 basis points to 54.6% during Fiscal 2025, largely attributable to geographic and channel mix, as well as increases across various expense categories, including higher compensation-related expenses and higher marketing investments due to planned key campaign events.

Current wording

Selling, general, and administrative ("SG&A") expenses as a percentage of net revenues decreased by 70 basis points to 53.9% during Fiscal 2026, 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 $96.6 million to $742.9 million in Fiscal 2025 as compared to Fiscal 2024, primarily due to a $175.7 million increase in our operating income, partially offset by a $76.7 million increase in our income tax provision. Net income per diluted share increased by $1.90 to $11.61 per share during Fiscal 2025 driven by the higher level of net income and lower weighted-average diluted shares outstanding.

Current wording

Net income increased by $198.2 million to $941.1 million in Fiscal 2026 as compared to Fiscal 2025, primarily due to a $247.1 million increase in our operating income, partially offset by a $28.8 million increase in our income tax provision and a $20.1 million increase in our non-operating expense, net. Net income per diluted share increased by $3.50 to $15.11 per share during Fiscal 2026 driven by the higher level of net income and lower weighted-average diluted shares outstanding.

Previous wording

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

Current wording

During Fiscal 2026 and Fiscal 2025, our operating results were negatively impacted by net restructuring-related charges and certain other charges totaling $118.1 million and $57.8 million, respectively, which had an after-tax effect of reducing net income by $92.1 million, or $1.48 per diluted share, and $46.0 million, or $0.72 per diluted share, respectively.

Previous wording

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

Current wording

We ended 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 $826.1 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 at March 28, 2026 as compared to March 29, 2025 was primarily due to our use of cash to support Class A common stock repurchases of $623.8 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $408.1 million in capital expenditures, and to make dividend payments of $216.5 million, partially offset by our operating cash flows of $1.154 billion.

Previous wording

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

Current wording

Net cash provided by operating activities was $1.154 billion during Fiscal 2026, as compared to $1.235 billion during Fiscal 2025. 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, partially offset by an increase in net income before non-cash charges.

Previous wording

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

Current wording

Our equity increased to $2.841 billion as of March 28, 2026, 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 Fiscal 2026.

Previous wording

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

Current wording

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

Previous wording

Net Revenues. Net revenues increased by $447.6 million, or 6.8%, to $7.079 billion in Fiscal 2025 as compared to Fiscal 2024, reflecting growth across all of our reportable segments, partially offset by unfavorable foreign currency effects of $66.1 million. On a constant currency basis, net revenues increased by $513.7 million, or 7.7%.

Current wording

Net Revenues. Net revenues increased by $1.035 billion, or 14.6%, to $8.115 billion in Fiscal 2026 as compared to Fiscal 2025, reflecting growth across all of our reportable segments, including favorable foreign currency effects of $201.9 million. On a constant currency basis, net revenues increased by $833.6 million, or 11.8%.

Previous wording

The following table summarizes the percentage change in our Fiscal 2025 consolidated comparable store sales as compared to the prior fiscal year:

Current wording

The following table summarizes the percentage changes in our Fiscal 2026 consolidated comparable store sales as compared to the prior fiscal year:

Previous wording

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

Current wording

Our global average store count during Fiscal 2026 decreased by 10 stores and concession shops, compared with the prior fiscal year, largely driven by concession shop closures in Asia.

Previous wording

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

Current wording

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

Previous wording

•a $118.5 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $121.9 million, reflecting increases of $114.3 million in comparable store sales and $7.6 million in non-comparable store sales. The increase in our comparable store sales reflected high-single digit AUR growth during Fiscal 2025 as compared to the prior fiscal year, 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 $211.5 million increase related to our North America retail business. On a constant currency basis, net revenues increased by $209.5 million, reflecting an increase of $216.6 million in comparable store sales, partially offset by a decrease of $7.1 million in non-comparable store sales. The increase in our comparable store sales reflected mid-teens AUR growth and higher traffic during Fiscal 2026 as compared to the prior fiscal year. The following table summarizes the percentage changes in comparable store sales related to our North America retail business:

Previous wording

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

Current wording

The $364.0 million increase in Europe net revenues was driven by:

Previous wording

•a $74.1 million increase related to our Europe wholesale business largely driven by stronger re-order trends more than offsetting planned reductions within the off-price wholesale channel and unfavorable foreign currency effects of $7.0 million.

Current wording

•a $205.6 million increase related to our Europe wholesale business largely driven by stronger re-order trends and favorable foreign currency effects of $89.6 million, which more than offset planned reductions within the off-price wholesale channel; and

Previous wording

•a $112.9 million increase related to our Europe retail business, inclusive of favorable foreign currency effects of $31.4 million. On a constant currency basis, net revenues increased by $81.5 million, reflecting increases of $66.7 million in comparable store sales and $14.8 million in non-comparable store sales. The increase in our comparable store sales reflected low-teens AUR growth during Fiscal 2024 as compared to Fiscal 2023, as well as higher traffic. The following table summarizes the percentage changes in comparable store sales related to our Europe retail business:

Current wording

•a $158.4 million increase related to our Europe retail business, inclusive of favorable foreign currency effects of $84.2 million. On a constant currency basis, net revenues increased by $74.2 million, reflecting increases of $57.9 million in comparable store sales and $16.3 million in non-comparable store sales. The increase in our comparable store sales reflected high single-digit AUR growth during Fiscal 2026 as compared to the prior fiscal year. The following table summarizes the percentage changes in comparable store sales related to our Europe retail business:

Previous wording

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

Current wording

The $394.1 million increase in Asia net revenues was primarily driven by:

Previous wording

Gross Profit. Gross profit increased by $266.0 million, or 6.4%, to $4.432 billion in Fiscal 2024, including unfavorable foreign currency effects of $4.9 million. Gross profit as a percentage of net revenues increased to 66.8% in Fiscal 2024 from 64.6% in Fiscal 2023. The 220 basis point improvement was primarily driven by the favorable impacts of approximately 90 basis points attributable to geographic and channel mix and 30 basis points attributable to lower non-routine inventory charges recorded during Fiscal 2024 as compared to the prior fiscal year. The remaining 100 basis point improvement was primarily due to lower freight costs and AUR growth of approximately low-double digits, more than offsetting incremental pressure from higher cotton costs and unfavorable foreign currency effects of 20 basis points.

Current wording

Gross Profit. Gross profit increased by $816.3 million, or 16.8%, to $5.669 billion in Fiscal 2026, including favorable foreign currency effects of $163.4 million. Gross profit as a percentage of net revenues increased to 69.9% in Fiscal 2026 from 68.6% in Fiscal 2025. The 130 basis point improvement reflected favorable foreign currency effects of 30 basis points. The remaining 100 basis point improvement was primarily due to mid-teens AUR growth and product elevation, 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 $262.5 million, or 7.3%, to $3.863 billion in Fiscal 2025, including favorable foreign currency effects of $30.8 million. SG&A expenses as a percentage of net revenues increased to 54.6% in Fiscal 2025 from 54.3% in Fiscal 2024. The 30 basis point increase was largely attributable to geographic and channel mix resulting from growth of our international and retail businesses which typically carry higher operating expense margins, as well as increases across various expense categories, including higher compensation-related expenses and marketing investments due to planned key campaign events.

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 $508.9 million, or 13.2%, to $4.372 billion in Fiscal 2026, including unfavorable foreign currency effects of $81.7 million. SG&A expenses as a percentage of net revenues decreased to 53.9% in Fiscal 2026 from 54.6% in Fiscal 2025. The 70 basis point decline was largely attributable to operating leverage on higher net revenues despite higher compensation-related expenses, marketing investments, and variable selling expenses.

Previous wording

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

Current wording

The $508.9 million increase in SG&A expenses was driven by:

Previous wording

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

Current wording

Restructuring and Other Charges, Net. During Fiscal 2026 and Fiscal 2025, we recorded restructuring charges of $25.9 million and $20.4 million, respectively, primarily consisting of severance and benefits costs. We also recognized income of $2.1 million and $2.8 million during Fiscal 2026 and Fiscal 2025, respectively, related to cash consideration received from Regent, L.P. in connection with our former Club Monaco business, which was sold as part of our restructuring activities during our fiscal year ended April 2, 2022. We donated this income both years to The Ralph Lauren Corporate Foundation, a non-profit charitable foundation, which resulted in related offsetting donation expenses of $2.1 million and $2.8 million during Fiscal 2026 and Fiscal 2025, respectively.

Previous wording

Restructuring and Other Charges, Net. During Fiscal 2024 and Fiscal 2023, we recorded net restructuring charges and benefits of $55.8 million and $19.2 million, respectively, primarily consisting of severance and benefits costs, as well as other charges of $14.0 million and $23.8 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 had not yet expired. In addition, during Fiscal 2024 we recorded other charges of $5.1 million in connection with our Next Generation Transformation project (refer to"Recent Developments" for additional discussion). Additionally, during Fiscal 2024 and Fiscal 2023, we recognized income of $7.0 million and $3.5 million, respectively, related to consideration received from Regent, L.P. in connection with our previously sold Club Monaco business. We donated this income to The Ralph Lauren Corporate Foundation, which resulted in related offsetting donation expenses of $7.0 million and $3.5 million during Fiscal 2024 and Fiscal 2023, respectively. See Note 9 to the accompanying consolidated financial statements.

Current wording

During Fiscal 2026, we also recognized income of $24.2 million related to the settlements of credit card interchange fee litigation matters. We donated this income to The Ralph Lauren Corporate Foundation, which resulted in related offsetting donation expense of $24.2 million during Fiscal 2026.

Previous wording

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

Current wording

Operating Income. Operating income increased by $247.1 million, or 26.5%, to $1.179 billion during Fiscal 2026, reflecting favorable foreign currency effects of $81.8 million. Our operating results during Fiscal 2026 and Fiscal 2025 were negatively impacted by net restructuring-related charges and certain other charges totaling $118.1 million and $57.8 million, respectively. Operating income as a percentage of net revenues was 14.5% in Fiscal 2026, reflecting a 130 basis point improvement from Fiscal 2025. The improvement in operating income as a percentage of net revenues was primarily driven by the increase in our gross margin and the reduction in SG&A expenses as a percentage of net revenues, partially offset by higher net restructuring-related charges and certain other charges recorded during Fiscal 2026 as compared to the prior fiscal year, all as previously discussed.