Ralph Lauren 2Q16 Earnings Call Notes

Ralph Lauren (RL) Q2 2016 Results

New CEO comes from H&M and Old Navy

“This is my first week at the company. I have a lot to learn. The first week started with a board meeting and then an analyst call. I’m excited by that. I will spend my next few months in the role getting to know our teams, our customers, and our investors. For those of you who don’t know me, I set the bar for performance really high. For 15 years, I was a part of the team that grew H&M from $3 billion to $17 billion. Most recently, I led Old Navy, where we drove three consecutive years of high performance and we added $1 billion in sales.”

In fashion today you have to stand for something

“I believe that independent of where you’re in the market today, in fashion apparel, you have to be special, you have to be unique, you have to be exciting, you have to stand for something, you have to be consistent, you have to focus on quality, you have to focus on the experience, and you have to deliver something great.”

It’s a mixed environment across the business. Europe strong. Cautious in the US

“if you look broadly across the business, it’s really a mixed environment. In Europe, our reorder rate is stronger than it’s ever been. And so we’re seeing real strength in the wholesale channel in Europe, and we’re chasing to catch up with the reorder rate there. In the U.S., I think we’re being cautious given the environment that we’re facing. We’re wanting to manage the markdown allowances in a prudent manner that, as I mentioned on the previous question, positions us well as we exit the fall season and transition into the spring season.”

Build a brand by telling a story

“there are things happening out there, bigger changes in the environment, than ever before over the last 50 years in fashion apparel. And one change that I see is that the customer wants something special, and it has to be unique and there has to be a story. And you hear a lot of brands speaking about story telling. And then you can look back at what Ralph and the team has done. It’s been years before anybody else in telling real stories, inviting customers into movie, sharing a dream of a better life.”

Be authentic but be current

“When I look at what Ralph and the team have done to build the company to where it stands right now is based on an authentic idea. And so it’s about being authentic and it’s being – it’s about being current at the same time.”