Ralph Lauren Corporation (NYSE:RL) Q2 2020 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 09:00 am ET


Ralph Lauren Corporation (NYSE:RL) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen thank you for standing by. Welcome to the Ralph Lauren Second Quarter Fiscal 2020 Earnings Call. [Operator Instructions] I'd now like to turn over the conference to our host Ms. Corinna Van Ghinst. Please go ahead.

Corinna Van der Ghinst

Good morning and thank you for joining Ralph Lauren's Second Quarter Fiscal 2020 Conference Call. With me today are Patrice Louvet the company's President and Chief Executive Officer; and Jane Nielsen Chief Operating Officer and Chief Financial Officer. After prepared remarks we will open up the call for your questions which we ask that you limit to 1 per caller. During today's call we will be making some forward-looking statements within the meaning of the federal securities laws including our financial outlook. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements.

Our expectations contain many risks and uncertainties. Principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings. To find disclosures and reconciliations of non-GAAP measures that we use when discussing our financial results you should refer to this morning's earnings release and to our SEC filings that can be found on our Investor Relations website.

And now I will turn the call over to Patrice.

Patrice Louvet

Thank you Cory. Good morning everyone and thank you for joining today's call. We delivered second quarter results slightly ahead of our overall expectations including better-than-expected revenues expanded operating margin and double-digit EPS growth. Our performance this quarter was driven by ongoing momentum in our international markets both Europe and Asia and balanced gross margin expansion and expense management. Meanwhile we continue to invest in brand elevation and execute key initiatives to stabilize our North America business against a more volatile backdrop. As we indicated at the start of this fiscal year we are monitoring the global retail environment closely particularly around trade and macro conditions. Our teams remain intensely focused on managing through volatile industry dynamics and executing on our strategic plan to deliver long-term sustainable growth and value creation. As I've shared before the 3 principles underlying this work include: Putting the consumer at the center of everything we do; elevating the brand; and balancing growth and productivity.

During the second quarter we continued to drive our performance across the five strategic priorities that we laid out as part of our five-year plan. These include: first win over a new generation of consumers; second energize core products and accelerate high potential underdeveloped categories; third drive targeted expansion in our regions and channels; fourth lead with digital across all activities; and fifth operate with discipline to show growth. Starting with win over a new generation of consumers. We continue to invest in media channels that matter most to consumers today namely digital and social and are on track toward our long-term marketing investment target of 5% of sales. In the second quarter marketing declined 10% to last year due to timing