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Ralph Lauren chalks out growth strategy, increases dividend by 25 percent

By Prachi Singh

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Business

Ralph Lauren Corporation announcing its strategic growth plan, “Writing Our Next Great Chapter,” said that it is to deliver sustainable long-term growth and value creation. The company also revealed its long-term financial outlook and raised its dividend by 25 percent to 0.625 dollar.

Commenting on the update, Ralph Lauren, Executive Chairman and Chief Creative Officer said in a statement: “As we reflect on 50 years, I am so energized by the work we are doing to build the future for our company and iconic brand. With a clear plan, Patrice’s leadership and our dedicated, passionate teams all over the world, we are reigniting the entrepreneurial spirit that is at the heart of our heritage and culture.”

Ralph Lauren announces growth strategy and reveals five-year outlook

The company’s board of directors approved a restructuring plan , under which the company expects to incur restructuring charges of 100-150 million dollars, associated with activities primarily related to the rightsizing and consolidation of its global distribution network and corporate offices, and through severance actions.

“We are confident that with our clear strategic plan in place, we can return Ralph Lauren to sustainable long-term growth and value creation,” said Patrice Louvet, the company’s President and CEO, adding, “We are building on a solid foundation, starting with our iconic Ralph Lauren brand, our engaged global organization and a strong balance sheet.”

The company is reiterating its fiscal 2019 guidance that was recently provided on its earnings call on May 23 and introducing its five-year financial outlook. Over the next five years, from fiscal 2018 to fiscal 2023, the company expects revenue to grow at a compounded annual growth rate of low to mid-single digits in constant currency. In addition, the company is targeting a return to revenue growth in fiscal 2020 in constant currency. Operating margin is expected to expand to mid-teens by fiscal 2023, in constant currency. In addition, marketing spend is expected to grow to approximately 5 percent of revenue.

Ralph Lauren declares 25 percent dividend increase,

The company’s board of directors declared a 25 percent increase in the regular quarterly cash dividend on the company's Common Stock. The new quarterly cash dividend is 0.625 dollar per share. This represents a new annual dividend of 2.50 dollars per share. The next quarterly dividend is payable on July 13, 2018 to shareholders of record at the close of business on June 29, 2018.

Picture:Facebook/Ralph Lauren

Ralph Lauren