RALPH LAUREN CORPORATION

INDEX


			Page
				~~Page~~

PART I. FINANCIAL INFORMATION (Unaudited)
Item 1.		Financial Statements:
		Consolidated Balance Sheets	32
		Consolidated Statements of Operations	43
		Consolidated Statements of Comprehensive Income (Loss)	54
		Consolidated Statements of Cash Flows	65
		Consolidated Statements of Equity	6
		Notes to Consolidated Financial Statements	78
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	3943
Item 3.		Quantitative and Qualitative Disclosures about Market Risk	6470
Item 4.		Controls and Procedures	6470

PART II. OTHER INFORMATION
Item 1.		Legal Proceedings	6571
Item 1A.		Risk Factors	6571
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	6671
Item 6.5.		~~Exhibits~~Other Information	6772
Item 6.		Exhibits	73
Signatures			6874

~~EX-12.1~~
~~EX-31.1~~
~~EX-31.2~~
~~EX-32.1~~
~~EX-32.2~~
~~EX-101~~	~~INSTANCE DOCUMENT~~
~~EX-101~~	~~SCHEMA DOCUMENT~~
~~EX-101~~	~~CALCULATION LINKBASE DOCUMENT~~
~~EX-101~~	~~LABELS LINKBASE DOCUMENT~~
~~EX-101~~	~~PRESENTATION LINKBASE DOCUMENT~~
~~EX-101~~	~~DEFINITION LINKBASE DOCUMENT~~



			21

RALPH LAUREN CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


		December 30, 2017			April 1, 2017				December 26, 2020		March 28, 2020
		(millions) (unaudited)							(millions)
ASSETS	ASSETS							ASSETS
Current assets:								Current assets:
Cash and cash equivalents		$	1,175.7		$	668.3		Cash and cash equivalents	$	2,621.5	$	1,620.4
Short-term investments		862.3			684.7			Short-term investments	165.7		495.9
Accounts receivable, net of allowances of $218.6 million and $214.4 million		295.2			450.2
Accounts receivable, net of allowances of $224.2 million and $276.2 million								Accounts receivable, net of allowances of $224.2 million and $276.2 million	373.6		277.1
Inventories		825.4			791.5			Inventories	866.0		736.2
Income tax receivable		69.8			79.4			Income tax receivable	75.1		84.8
Prepaid expenses and other current assets		304.8			280.4			Prepaid expenses and other current assets	174.5		160.8
Total current assets		3,533.2			2,954.5			Total current assets	4,276.4		3,375.2
Property and equipment, net		1,215.9			1,316.0			Property and equipment, net	1,086.4		979.5
Operating lease right-of-use assets								Operating lease right-of-use assets	1,339.6		1,511.6
Deferred tax assets		133.1			125.9			Deferred tax assets	322.5		245.2
Goodwill		935.0			904.6			Goodwill	949.0		915.5
Intangible assets, net		201.5			219.8			Intangible assets, net	126.0		141.0
Other non-current assets		180.3			131.2			Other non-current assets	72.3		111.9
Total assets		$	6,199.0		$	5,652.0		Total assets	$	8,172.2	$	7,279.9
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities:								Current liabilities:
Short-term debt								Short-term debt	$	0	$	475.0
Current portion of long-term debt		$	298.3		$	—		Current portion of long-term debt	0		299.6
Accounts payable		184.3			147.7			Accounts payable	335.0		246.8
Income tax payable		138.5			29.5			Income tax payable	70.5		65.1
Current operating lease liabilities								Current operating lease liabilities	296.1		288.4
Accrued expenses and other current liabilities		1,089.1			982.7			Accrued expenses and other current liabilities	975.2		717.1
Total current liabilities		1,710.2			1,159.9			Total current liabilities	1,676.8		2,092.0
Long-term debt		290.3			588.2			Long-term debt	1,631.9		396.4
Long-term operating lease liabilities								Long-term operating lease liabilities	1,381.5		1,568.3
Income tax payable		150.8			—			Income tax payable	118.7		132.7
Non-current liability for unrecognized tax benefits		76.4			62.7			Non-current liability for unrecognized tax benefits	91.4		88.9
Other non-current liabilities		563.8			541.6			Other non-current liabilities	579.9		308.5
Commitments and contingencies (Note 13)								Commitments and contingencies (Note 13)	0		0
Total liabilities		2,791.5			2,352.4			Total liabilities	5,480.2		4,586.8
Equity:								Equity:
Class A common stock, par value $.01 per share; 102.0 million and 101.5 million shares issued; 55.4 million and 55.1 million shares outstanding		1.0			0.9
Class B common stock, par value $.01 per share; 25.9 million shares issued and outstanding		0.3			0.3
Class A common stock, par value $.01 per share; 106.0 million and 104.9 million shares issued; 48.2 million and 47.6 million shares outstanding								Class A common stock, par value $.01 per share; 106.0 million and 104.9 million shares issued; 48.2 million and 47.6 million shares outstanding	1.0		1.0
Class B common stock, par value $.01 per share; 24.9 million shares issued and outstanding								Class B common stock, par value $.01 per share; 24.9 million shares issued and outstanding	0.3		0.3
Additional paid-in-capital		2,365.1			2,308.8			Additional paid-in-capital	2,648.8		2,594.4
Retained earnings		5,751.5			5,751.9			Retained earnings	5,947.0		5,994.0
Treasury stock, Class A, at cost; 46.6 million and 46.4 million shares		(4,579.8		)	(4,563.9		)
Treasury stock, Class A, at cost; 57.8 million and 57.3 million shares								Treasury stock, Class A, at cost; 57.8 million and 57.3 million shares	(5,814.5)		(5,778.4)
Accumulated other comprehensive loss		(130.6		)	(198.4		)	Accumulated other comprehensive loss	(90.6)		(118.2)
Total equity		3,407.5			3,299.6			Total equity	2,692.0		2,693.1
Total liabilities and equity		$	6,199.0		$	5,652.0		Total liabilities and equity	$	8,172.2	$	7,279.9

See accompanying notes.



			32

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016				December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions, except per share data) (unaudited)													(millions, except per share data)
Net revenues	$	1,641.8		$	1,714.6		$	4,653.1		$	5,087.4		Net revenues	$	1,432.8	$	1,750.7	$	3,113.8	$	4,885.7
Cost of goods sold^(a)	(645.6		)	(731.4		)	(1,809.9		)	(2,255.4		)
Cost of goods sold													Cost of goods sold	(502.4)		(661.6)		(1,035.3)		(1,826.8)
Gross profit	996.2			983.2			2,843.2			2,832.0			Gross profit	930.4		1,089.1		2,078.5		3,058.9
Selling, general, and administrative expenses^(a)	(773.8		)	(771.9		)	(2,248.9		)	(2,389.9		)
Amortization of intangible assets	(6.0		)	(6.0		)	(18.0		)	(18.1		)
Selling, general, and administrative expenses													Selling, general, and administrative expenses	(747.5)		(843.3)		(1,883.3)		(2,385.3)
Impairment of assets	(3.9		)	(10.3		)	(24.8		)	(56.7		)	Impairment of assets	(2.6)		(14.4)		(35.7)		(21.7)
Restructuring and other charges^(a)	(23.3		)	(66.7		)	(78.7		)	(193.9		)
Restructuring and other charges													Restructuring and other charges	(9.9)		(7.0)		(177.4)		(51.1)
Total other operating expenses, net	(807.0		)	(854.9		)	(2,370.4		)	(2,658.6		)	Total other operating expenses, net	(760.0)		(864.7)		(2,096.4)		(2,458.1)
Operating income	189.2			128.3			472.8			173.4
Foreign currency gains (losses)	0.6			(2.7		)	2.4			0.8
Operating income (loss)													Operating income (loss)	170.4		224.4		(17.9)		600.8
Interest expense	(4.8		)	(3.6		)	(14.4		)	(11.1		)	Interest expense	(12.2)		(4.2)		(34.6)		(12.8)
Interest and other income, net	2.8			2.5			7.1			5.7
Equity in losses of equity-method investees	(1.5		)	(1.4		)	(3.6		)	(5.2		)
Income before income taxes	186.3			123.1			464.3			163.6
Income tax provision	(268.1		)	(41.8		)	(342.8		)	(58.9		)
Interest income													Interest income	2.4		7.3		7.5		28.5
Other income (expense), net													Other income (expense), net	1.6		2.9		5.5		(2.9)
Income (loss) before income taxes													Income (loss) before income taxes	162.2		230.4		(39.5)		613.6
Income tax benefit (provision)													Income tax benefit (provision)	(42.4)		103.7		(7.5)		19.7
Net income (loss)	$	(81.8	)	$	81.3		$	121.5		$	104.7		Net income (loss)	$	119.8	$	334.1	$	(47.0)	$	633.3
Net income (loss) per common share:													Net income (loss) per common share:
Basic	$	(1.00	)	$	0.98		$	1.49		$	1.26		Basic	$	1.63	$	4.47	$	(0.64)	$	8.28
Diluted	$	(1.00	)	$	0.98		$	1.47		$	1.25		Diluted	$	1.61	$	4.41	$	(0.64)	$	8.13
Weighted average common shares outstanding:													Weighted average common shares outstanding:
Basic	81.7			82.6			81.7			82.9			Basic	73.6		74.7		73.4		76.5
Diluted	81.7			83.3			82.5			83.6			Diluted	74.6		75.8		73.4		77.9
Dividends declared per share	$	0.50		$	0.50		$	1.50		$	1.50		Dividends declared per share	$	0	$	0.6875	$	0	$	2.0625
^(a) Includes total depreciation expense of:	$	(66.7	)	$	(71.9	)	$	(201.4	)	$	(213.8	)

See accompanying notes.



			43

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016				December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions) (unaudited)													(millions)
Net income (loss)	$	(81.8	)	$	81.3		$	121.5		$	104.7		Net income (loss)	$	119.8	$	334.1	$	(47.0)	$	633.3
Other comprehensive income (loss), net of tax:													Other comprehensive income (loss), net of tax:
Foreign currency translation gains (losses)	3.0			(88.8		)	90.7			(86.7		)	Foreign currency translation gains (losses)	15.7		5.5		46.0		(10.4)
Net gains (losses) on cash flow hedges	2.3			45.0			(22.0		)	43.2
Net gains (losses) on defined benefit plans	(0.5		)	1.1			(0.9		)	2.0
Net losses on cash flow hedges													Net losses on cash flow hedges	(6.5)		(8.6)		(17.8)		(4.7)
Net losses on defined benefit plans													Net losses on defined benefit plans	(0.3)		(0.1)		(0.6)		(0.1)
Other comprehensive income (loss), net of tax	4.8			(42.7		)	67.8			(41.5		)	Other comprehensive income (loss), net of tax	8.9		(3.2)		27.6		(15.2)
Total comprehensive income (loss)	$	(77.0	)	$	38.6		$	189.3		$	63.2		Total comprehensive income (loss)	$	128.7	$	330.9	$	(19.4)	$	618.1

See accompanying notes.



			54

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended							Nine Months Ended
	December 30, 2017			December 31, 2016				December 26, 2020		December 28, 2019
	(millions) (unaudited)							(millions)
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	121.5		$	104.7
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							Net income (loss)	$	(47.0)	$	633.3
Adjustments to reconcile net income (loss) to net cash provided by operating activities:							Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	219.4			231.9			Depreciation and amortization expense	185.5		201.0
Deferred income tax expense (benefit)	(8.0		)	9.8
Equity in losses of equity-method investees	3.6			5.2
Deferred income tax benefit							Deferred income tax benefit	(101.8)		(155.7)

Non-cash stock-based compensation expense	56.3			46.4			Non-cash stock-based compensation expense	54.4		72.9
Non-cash impairment of assets	24.8			56.7			Non-cash impairment of assets	35.7		21.7
Non-cash restructuring-related inventory charges	1.3			149.4
Other non-cash charges	6.7			18.1

Bad debt expense (benefit)							Bad debt expense (benefit)	(20.3)		1.9
Other non-cash benefits							Other non-cash benefits	(2.7)		(0.3)
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Accounts receivable	158.9			214.9			Accounts receivable	(67.3)		46.9
Inventories	(11.6		)	(36.5		)	Inventories	(92.0)		(89.0)
Prepaid expenses and other current assets	(4.2		)	(72.8		)	Prepaid expenses and other current assets	(0.2)		(30.4)
Accounts payable and accrued liabilities	105.0			98.4			Accounts payable and accrued liabilities	346.9		56.3
Income tax receivables and payables	279.7			(2.6		)	Income tax receivables and payables	39.8		16.1
Deferred income	3.8			(15.5		)	Deferred income	4.8		0.6
Other balance sheet changes	(6.1		)	42.6			Other balance sheet changes	(1.2)		(27.3)
Net cash provided by operating activities	951.1			850.7			Net cash provided by operating activities	334.6		748.0
Cash flows from investing activities:							Cash flows from investing activities:
Capital expenditures	(123.0		)	(225.5		)	Capital expenditures	(80.8)		(216.0)
Purchases of investments	(985.5		)	(460.5		)	Purchases of investments	(512.3)		(890.1)
Proceeds from sales and maturities of investments	795.3			704.8			Proceeds from sales and maturities of investments	848.0		1,510.3
Acquisitions and ventures	(4.6		)	(2.5		)	Acquisitions and ventures	(2.0)		0.9
Net cash provided by (used in) investing activities	(317.8		)	16.3
Proceeds from sale of property							Proceeds from sale of property	0		20.8
Settlement of net investment hedges							Settlement of net investment hedges	3.7		0
Net cash provided by investing activities							Net cash provided by investing activities	256.6		425.9
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from issuance of short-term debt	—			3,735.2
Repayments of short-term debt	—			(3,851.3		)
Payments of capital lease obligations	(21.2		)	(19.4		)
Repayments of borrowings on credit facilities							Repayments of borrowings on credit facilities	(475.0)		0
Proceeds from the issuance of long-term debt							Proceeds from the issuance of long-term debt	1,241.9		0
Repayments of long-term debt							Repayments of long-term debt	(300.0)		0
Payments of finance lease obligations							Payments of finance lease obligations	(8.6)		(10.6)
Payments of dividends	(121.7		)	(123.7		)	Payments of dividends	(49.8)		(153.2)
Repurchases of common stock, including shares surrendered for tax withholdings	(15.9		)	(115.0		)	Repurchases of common stock, including shares surrendered for tax withholdings	(36.1)		(542.1)
Proceeds from exercise of stock options	0.1			4.7
Net cash used in financing activities	(158.7		)	(369.5		)

Other financing activities							Other financing activities	(8.7)		(0.9)
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	363.7		(706.8)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	36.8			(29.0		)	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	46.8		(4.2)
Net increase in cash, cash equivalents, and restricted cash	511.4			468.5			Net increase in cash, cash equivalents, and restricted cash	1,001.7		462.9
Cash, cash equivalents, and restricted cash at beginning of period	711.8			502.1			Cash, cash equivalents, and restricted cash at beginning of period	1,629.8		626.5
Cash, cash equivalents, and restricted cash at end of period	$	1,223.2		$	970.6		Cash, cash equivalents, and restricted cash at end of period	$	2,631.5	$	1,089.4

See accompanying notes.


			5

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Three Months Ended December 26, 2020
	Common Stock(a)			Additional Paid-in Capital				Treasury Stock at Cost
						Retained Earnings							Total Equity
	Shares	Amount						Shares	Amount		AOCI(b)
	(millions)
Balance at September 26, 2020	130.9	$	1.3	$	2,629.0	$	5,827.2	57.8	$	(5,813.9)	$	(99.5)	$	2,544.1
Comprehensive income:
Net income						119.8
Other comprehensive income											8.9
Total comprehensive income													128.7
Dividends declared						0							0
Repurchases of common stock								0	(0.6)				(0.6)
Stock-based compensation				19.8									19.8

Balance at December 26, 2020	130.9	$	1.3	$	2,648.8	$	5,947.0	57.8	$	(5,814.5)	$	(90.6)	$	2,692.0

	Three Months Ended December 28, 2019
	Common Stock(a)			Additional Paid-in Capital				Treasury Stock at Cost
						Retained Earnings							Total Equity
	Shares	Amount						Shares	Amount		AOCI(b)
	(millions)
Balance at September 28, 2019	129.7	$	1.3	$	2,544.6	$	6,009.4	55.1	$	(5,526.3)	$	(115.4)	$	2,913.6
Comprehensive income:
Net income						334.1
Other comprehensive loss											(3.2)
Total comprehensive income													330.9
Dividends declared						(50.7)							(50.7)
Repurchases of common stock								0.9	(99.4)				(99.4)
Stock-based compensation				22.1									22.1

Balance at December 28, 2019	129.7	$	1.3	$	2,566.7	$	6,292.8	56.0	$	(5,625.7)	$	(118.6)	$	3,116.5

(a)Includes Class A and Class B common stock.

(b)Accumulated other comprehensive income (loss).


			6

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(Unaudited)


	Nine Months Ended December 26, 2020
	Common Stock(a)			Additional Paid-in Capital				Treasury Stock at Cost
						Retained Earnings							Total Equity
	Shares	Amount						Shares	Amount		AOCI(b)
	(millions)
Balance at March 28, 2020	129.8	$	1.3	$	2,594.4	$	5,994.0	57.3	$	(5,778.4)	$	(118.2)	$	2,693.1
Comprehensive loss:
Net loss						(47.0)
Other comprehensive income											27.6
Total comprehensive loss													(19.4)
Dividends declared						0							0
Repurchases of common stock								0.5	(36.1)				(36.1)
Stock-based compensation				54.4									54.4
Shares issued pursuant to stock-based compensation plans	1.1	0		0									0

Balance at December 26, 2020	130.9	$	1.3	$	2,648.8	$	5,947.0	57.8	$	(5,814.5)	$	(90.6)	$	2,692.0

	Nine Months Ended December 28, 2019
	Common Stock(a)			Additional Paid-in Capital				Treasury Stock at Cost
						Retained Earnings							Total Equity
	Shares	Amount						Shares	Amount		AOCI(b)
	(millions)
Balance at March 30, 2019	128.8	$	1.3	$	2,493.8	$	5,979.1	50.7	$	(5,083.6)	$	(103.4)	$	3,287.2
Comprehensive income:
Net income						633.3
Other comprehensive loss											(15.2)
Total comprehensive income													618.1
Dividends declared						(155.1)							(155.1)
Repurchases of common stock								5.3	(542.1)				(542.1)
Stock-based compensation				72.9									72.9
Shares issued pursuant to stock-based compensation plans	0.9	0		0									0
Cumulative adjustment from adoption of new accounting standards						(164.5)							(164.5)
Balance at December 28, 2019	129.7	$	1.3	$	2,566.7	$	6,292.8	56.0	$	(5,625.7)	$	(118.6)	$	3,116.5

(a)Includes Class A and Class B common stock. During the nine months ended December 28, 2019, 1.0 million shares of Class B common stock were converted into an equal number of shares of Class A common stock pursuant to the terms of the Class B common stock (see Note 14).

(b)Accumulated other comprehensive income (loss).

See accompanying notes.


			7

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share data and where otherwise indicated)

(Unaudited)


1.	~~Description of Business~~

1. Description of Business

Ralph Lauren Corporation ("RLC") is a global leader in the design, marketing, and distribution of premium lifestyle products, including apparel, footwear, accessories, home furnishings, fragrances, and ~~other licensed product categories.~~hospitality. RLC's long-standing reputation and distinctive image have been developed across an expanding number of products, brands, sales channels, and international markets. RLC's brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, Chaps, and Club Monaco, among others. RLC and its subsidiaries are collectively referred to herein as the "Company," "we," "us," "our," and "ourselves," unless the context indicates otherwise.

The Company diversifies its business by geography (North America, Europe, and Asia, among other regions) and ~~channels~~channel of distribution ~~(wholesale, retail,~~(retail, wholesale, and licensing). This allows the Company to maintain a dynamic balance as its operating results do not depend solely on the performance of any single geographic area or channel of distribution. The ~~Company's wholesale sales are made principally to major department stores and specialty stores around the world. The~~ Company ~~also~~ sells directly to consumers through its integrated retail channel, which includes its retail stores, concession-based shop-within-shops, and ~~e-commerce~~digital commerce operations around the world. The Company's 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 the Company has licensed the right to operate in defined geographic territories using its trademarks. In addition, the Company licenses to ~~unrelated~~ third parties for specified periods the right to ~~operate retail stores and/or to use~~access its various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings.

The Company organizes its business into the following ~~three~~3 reportable segments: North America, Europe, and Asia. In addition to these reportable segments, the Company also has other non-reportable segments. See Note 17 for further discussion of the Company's segment reporting structure.

2. Basis of Presentation


2.	~~Basis of Presentation~~

Interim Financial Statements

These interim consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") and are unaudited. In the opinion of management, these consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position, income (loss), comprehensive income (loss), and cash flows of the Company for the interim periods presented. In addition, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") and the notes thereto have been condensed or omitted from this report as is permitted by the SEC's rules and regulations. However, the Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading.

This report should be read in conjunction with the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended ~~April 1, 2017~~March 28, 2020 (the "Fiscal ~~2017~~2020 10-K").

Basis of Consolidation

These unaudited interim consolidated financial statements present the consolidated financial position, income (loss), comprehensive income (loss), and cash flows of the Company, including all entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation.


			8

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fiscal Periods

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year ~~2018~~2021 will end on March ~~31, 2018~~27, 2021 and will be a 52-week period ("Fiscal ~~2018~~"2021"). Fiscal year ~~2017~~2020 ended on ~~April 1, 2017~~March 28, 2020 and was also a 52-week period ("Fiscal ~~2017"~~2020"). The third quarter of Fiscal ~~2018~~2021 ended on December ~~30, 2017~~26, 2020 and was a 13-week period. The third quarter of Fiscal ~~2017~~2020 ended on December ~~31, 2016~~28, 2019 and was also a 13-week period.



	7

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Actual results could differ materially from those estimates.

Significant estimates inherent in the preparation of the consolidated financial statements include reserves for bad debt, customer returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances; the realizability of inventory; reserves for litigation and other contingencies; useful lives and impairments of long-lived tangible and intangible assets; fair value measurements; accounting for income taxes and related uncertain tax positions; valuation of stock-based compensation awards and related ~~estimated~~ forfeiture rates; reserves for restructuring activity; and accounting for business combinations, among others.

Reclassifications

Certain reclassifications have been made to ~~the~~ prior ~~period's~~period financial information in order to conform to the current period's ~~presentation, including the realignment of the Company's segment reporting structure, as further described in Note 17.~~presentation.

Seasonality of Business

The Company's business is typically affected by seasonal trends, with higher levels of retail sales in its second and third fiscal quarters and higher wholesale sales in its second and fourth ~~fiscal quarters and higher retail sales in its second and third~~ fiscal quarters. These trends result primarily from the timing of ~~seasonal wholesale shipments and~~ key vacation travel, back-to-school, and holiday shopping periods impacting ~~our~~its retail ~~business.~~business and the timing of seasonal wholesale shipments. As a result of changes in its business, consumer spending patterns, and the macroeconomic environment, including those resulting from disease pandemics and other catastrophic events, historical quarterly operating trends and working capital requirements may not be indicative of the Company's 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, the Company's operating results and cash flows for the three-month and nine-month periods ended December ~~30, 2017~~26, 2020 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal ~~2018~~.2021.

COVID-19 Pandemic

A novel strain of coronavirus commonly referred to as COVID-19 has spread rapidly across the globe, including throughout all major geographies in which the Company operates (North America, Europe, and Asia), resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. Such factors, among others, have resulted in a significant decline in retail traffic, tourism, and consumer spending on discretionary items. Additionally, during this period of uncertainty, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs, reduced pay, and severance actions, which could lower consumers' disposable income levels or willingness to purchase discretionary items. Further, even after such government restrictions and company initiatives are lifted, consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations, could be adversely affected.

In connection with the COVID-19 pandemic, the Company has experienced varying degrees of business disruptions and periods of closure of its stores, distribution centers, and corporate facilities, as have the Company's wholesale customers, licensing partners, suppliers, and vendors. During the first quarter of Fiscal 2021, the majority of the Company's stores in key markets were closed for an average of 8 to 10 weeks due to government-mandated lockdowns and other restrictions, resulting in


3.			~~Summary of Significant Accounting Policies~~9

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

significant adverse impacts to its operating results. Resurgences in certain parts of the world have resulted in further shutdowns and business disruptions periodically throughout Fiscal 2021. Most recently, during the third quarter of Fiscal 2021, a significant number of the Company's stores in Europe were closed for approximately one month during the holiday period due to government-mandated lockdowns and other restrictions, with such disruptions continuing into the fourth quarter of Fiscal 2021. Further, the majority of the Company's stores that are able to remain open have been operating at limited hours and/or customer capacity levels in accordance with local health guidelines, with traffic remaining challenged. The Company's wholesale and licensing businesses have also been adversely affected, particularly in North America and Europe, as a result of store closures and lower traffic and consumer demand.

Throughout the pandemic, the Company's priority has been to ensure the safety and well-being of its employees, consumers, and the communities in which it operates around the world. The Company continues to take into account the guidance of local governments and global health organizations and has implemented new health and safety protocols in its stores, distribution centers, and corporate facilities. The Company has also taken various preemptive actions to preserve cash and strengthen its liquidity position, including:

•amending its Global Credit Facility in May 2020 to temporarily waive its leverage ratio requirement (see Note 10);

•issuing $1.250 billion of unsecured senior notes in June 2020, the proceeds of which are being used for general corporate purposes, including repayment of certain of the Company's outstanding borrowings (see Note 10);

•temporarily suspending its quarterly cash dividend and common stock repurchase program, effective beginning in the first quarter of Fiscal 2021 (see Note 14);

•temporarily reducing the base compensation of its executives and senior management team, as well as its Board of Directors, for the first quarter of Fiscal 2021;

•furloughing or reducing work hours for a significant portion of its employees during the first half of Fiscal 2021;

•carefully managing its expense structure across all key areas of spend, including aligning inventory levels with anticipated demand, negotiating rent abatements with certain of its landlords, and postponing non-critical capital build-out and other investments and activities;

•pursuing relevant government subsidy programs related to COVID-19 business disruptions; and

•improving upon its cash conversion cycle largely driven by its accounts receivable collection efforts and extended vendor payment terms.

Despite the recent introduction of vaccinations, the COVID-19 pandemic remains highly volatile and continues to evolve. Accordingly, the Company cannot predict for how long and to what extent the pandemic will impact its business operations or the global economy as a whole. The Company will continue to assess its operations location-by-location, taking into account the guidance of local governments and global health organizations to determine when its operations can begin returning to normal levels of business.

3. Summary of Significant Accounting Policies

Revenue Recognition

~~Revenue is recognized~~The Company recognizes revenue across all ~~segments~~channels of the business when ~~there~~it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized considers terms of sale that create variability in the amount of consideration that the Company ultimately expects to be entitled to in exchange for the products or services, and is ~~persuasive evidence of~~subject to an ~~arrangement, delivery has occurred, the price has been fixed or is determinable,~~overall constraint that a significant revenue reversal will not occur in future periods. Sales and ~~collectability is reasonably assured.~~other related taxes collected from customers and remitted to government authorities are excluded from revenue.


			10

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue ~~within~~from the Company's retail business is recognized when the customer takes physical possession of the products, which occurs either at the point of sale for merchandise purchased at the Company's retail stores and concession-based shop-within-shops, or upon receipt of shipment for merchandise ordered through direct-to-consumer digital commerce sites. Such revenues are recorded net of estimated returns based on historical trends. Payment is due at the point of sale.

Gift cards issued to customers by the Company are recorded as a liability until they are redeemed, at which point revenue is recognized. The Company also estimates and recognizes revenue for gift card balances not expected to ever be redeemed (referred to as "breakage") to the extent that it does not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdiction as unclaimed or abandoned property. Such estimates are based upon historical redemption trends, with breakage income recognized in proportion to the pattern of actual customer redemptions.

Revenue from the Company's wholesale business is generally recognized upon shipment of products, at ~~the time~~which point title passes and risk of loss is transferred to ~~customers.~~the customer. In certain arrangements where the Company retains the risk of loss during shipment, revenue is recognized upon receipt of products by the customer. Wholesale revenue is recorded net of estimates of returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances. Returns and allowances require pre-approval from management and discounts are based on trade terms. Estimates for end-of-season markdown reserves are based on historical trends, actual and forecasted seasonal results, an evaluation of current economic and market conditions, retailer performance, and, in certain cases, contractual terms. Estimates for operational chargebacks are based on actual customer notifications of order fulfillment discrepancies and historical trends. The Company reviews and refines these estimates on at least a quarterly basis. The Company's historical estimates of these ~~costs~~amounts have not differed materially from actual results.

~~Retail store and concession-based shop-within-shop revenue~~Revenue from the Company's licensing arrangements is recognized ~~net~~over time during the period that licensees are provided access to the Company's trademarks (i.e., symbolic intellectual property) and benefit from such access through their sales of ~~estimated returns at the~~licensed products. These arrangements require licensees to pay a sales-based royalty which, for most arrangements, may be subject to a contractually-guaranteed minimum royalty amount. Payments are generally due quarterly and, depending on time of sale to consumers. E-commerce revenue from sales of products ordered through the Company's e-commerce sites and third-party digital partner e-commerce sites is recognized upon delivery of the shipment to its customers. Such revenue is also reduced by an estimate of returns.

~~Gift cards issued by the Company are~~receipt, may be recorded as a liability until ~~they are redeemed, at which point revenue is recognized.~~recognized as revenue. The Company recognizes ~~income~~revenue for ~~unredeemed gift cards when~~sales-based royalty arrangements (including those for which the ~~likelihood~~royalty exceeds any contractually-guaranteed minimum royalty amount) as licensed products are sold by the licensee. If a sales-based royalty is not ultimately expected to exceed a contractually-guaranteed minimum royalty amount, the minimum is generally recognized as revenue ratably over the respective contractual period. This sales-based output measure of ~~redemption by a customer is remote~~progress and pattern of recognition best represents the value transferred to the licensee over the term of the arrangement, as well as the amount of consideration that the Company ~~determines that it does~~is entitled to receive in exchange for providing access to its trademarks. As of December 26, 2020, contractually-guaranteed minimum royalty amounts expected to be recognized as revenue during future periods were as follows:


	Contractually-Guaranteed Minimum Royalties(a)
	(millions)
Remainder of Fiscal 2021	$	18.6
Fiscal 2022	93.1
Fiscal 2023	73.8
Fiscal 2024	41.4
Fiscal 2025	14.1
Fiscal 2026 and thereafter	32.0
Total	$	273.0

(a)Amounts presented do not ~~have a legal obligation to remit the value~~contemplate anticipated contract renewals or royalties earned in excess of the ~~unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property.~~

contractually-guaranteed minimums.



			811

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Disaggregated Net Revenues

~~Revenue from licensing arrangements is recognized when earned in accordance with~~The following tables disaggregate the ~~terms~~Company's net revenues into categories that depict how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors for the ~~underlying agreements, generally based upon the higher of (i) contractually guaranteed minimum royalty levels or (ii) actual sales and royalty data, or estimates thereof, received~~fiscal periods presented:


	Three Months Ended
	December 26, 2020										December 28, 2019
	North America		Europe		Asia		Other		Total		North America		Europe		Asia		Other		Total
	(millions)
Sales Channel(a):
Retail	$	453.0	$	165.9	$	313.7	$	30.0	$	962.6	$	575.0	$	257.2	$	274.1	$	63.9	$	1,170.2
Wholesale	262.4		149.7		15.9		5.4		433.4		335.6		180.6		15.5		2.9		534.6
Licensing	0		0		0		36.8		36.8		0		0		0		45.9		45.9
Total	$	715.4	$	315.6	$	329.6	$	72.2	$	1,432.8	$	910.6	$	437.8	$	289.6	$	112.7	$	1,750.7


	Nine Months Ended
	December 26, 2020										December 28, 2019
	North America		Europe		Asia		Other		Total		North America		Europe		Asia		Other		Total
	(millions)
Sales Channel(a):
Retail	$	910.3	$	419.3	$	699.5	$	57.6	$	2,086.7	$	1,436.0	$	714.3	$	753.9	$	158.8	$	3,063.0
Wholesale	513.1		376.5		38.6		8.2		936.4		1,075.2		564.5		49.6		6.6		1,695.9
Licensing	0		0		0		90.7		90.7		0		0		0		126.8		126.8
Total	$	1,423.4	$	795.8	$	738.1	$	156.5	$	3,113.8	$	2,511.2	$	1,278.8	$	803.5	$	292.2	$	4,885.7

(a)Net revenues from the Company's ~~licensees.~~retail and wholesale businesses are recognized at a point in time. Net revenues from the Company's licensing business are recognized over time.

Deferred Income

Deferred income represents cash payments received in advance of the Company's transfer of control of products or services to its customers and is generally comprised of unredeemed gift cards, net of breakage, and advance royalty payments from licensees. The ~~Company accounts for sales taxes~~Company's deferred income balances were $20.4 million and $14.6 million as of December 26, 2020 and March 28, 2020, respectively, and were primarily recorded within accrued expenses and other ~~related taxes on a~~current liabilities within the consolidated balance sheets. During the three-month and nine-month periods ended December 26, 2020, the Company recognized $1.6 million and $7.5 million, respectively, of net ~~basis, excluding such taxes~~revenues from ~~revenue.~~amounts recorded as deferred income as of March 28, 2020. The majority of the deferred income balance as of December 26, 2020 is expected to be recognized as revenue within the next twelve months.

Shipping and Handling Costs

~~The costs~~Costs associated with shipping goods to the Company's customers are accounted for as fulfillment activities and reflected as a component of selling, general, and administrative ("SG&A") expenses in the consolidated statements of operations. ~~The costs~~Costs of preparing merchandise for sale, such as picking, packing, warehousing, and order charges ("handling costs"), are also included in SG&A expenses. Shipping and handling costs billed to customers are included in revenue.


			12

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of shipping and handling costs ~~recognized during~~for the ~~three-month and nine-month~~fiscal periods ~~ended December 30, 2017 and December 31, 2016~~presented is as follows:


	Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
	December 30, 2017		December 31, 2016		December 30, 2017		December 31, 2016			December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)									(millions)
Shipping costs	$	11.7	$	12.8	$	28.4	$	32.2	Shipping costs	$	18.3	$	12.3	$	38.9	$	34.7
Handling costs	39.7		44.1		115.3		127.8		Handling costs	38.9		40.8		98.7		116.5

Net Income (Loss) per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common shares by the weighted-average number of common shares outstanding during the period. Weighted-average common shares include shares of the Company's Class A and Class B common stock. Diluted net income (loss) per common share adjusts basic net income (loss) per common share for the dilutive effects of outstanding ~~stock options,~~ restricted stock units ("RSUs"), stock options, and any other potentially dilutive instruments, only in the periods in which such effects are dilutive.

The weighted-average number of common shares outstanding used to calculate basic net income (loss) per common share is reconciled to shares used to calculate diluted net income (loss) per common share as follows:


	Three Months Ended		Nine Months Ended
	December 26, 2020	December 28, 2019	December 26, 2020		December 28, 2019
	(millions)
Basic shares	73.6	74.7	73.4		76.5
Dilutive effect of RSUs and stock options	1.0	1.1	0	(a)	1.4
Diluted shares	74.6	75.8	73.4		77.9

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Basic shares 81.7
82.6
81.7
82.9
Dilutive effect of stock options and RSUs —
^(a)
0.7
0.8
0.7
Diluted shares 81.7
83.3
82.5
83.6

(a)Incremental shares of 1.2 million attributable to outstanding RSUs were excluded from the computation of diluted shares for the nine months ended December 26, 2020 as such shares would not be dilutive as a result of the net loss incurred.


^(a)	Incremental shares of 0.9 million attributable to outstanding stock options and RSUs were excluded from the computation of diluted shares for the three months ended December 30, 2017, as such shares would not be dilutive as a result of the net loss incurred during the period.

All earnings per share amounts have been calculated using unrounded numbers. ~~Options~~The Company has outstanding performance-based and market-based RSUs, which are included in the computation of diluted shares only to the extent that the underlying performance or market conditions (i) have been satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive. In addition, options to purchase shares of the Company's Class A common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income (loss) per common share. In addition, the Company has outstanding performance-based RSUs, which are included in the computation of diluted shares only to the extent that the underlying performance conditions (and applicable market condition modifiers, if any) (i) have been satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive. As of December ~~30, 2017~~26, 2020 and December ~~31, 2016~~,28, 2019, there were ~~2.0~~0.7 million and



	9

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~2.2~~ 0.9 million,, respectively, of additional shares issuable contingent upon vesting of performance-based and market-based RSUs and upon exercise of anti-dilutive stock options, ~~and contingent vesting of performance-based RSUs~~ that were excluded from the diluted shares calculations.

Accounts Receivable

In the normal course of business, the Company extends credit to wholesale customers that satisfy defined credit criteria. Payment is generally due within 30 to 120 days and does not include a significant financing component. Accounts receivable is recorded at ~~carrying value,~~amortized cost, which approximates fair value, and is presented in the Company's consolidated balance sheets net of certain reserves and allowances. These reserves and allowances consist of (i) reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances (see the "Revenue Recognition" section above for further discussion of related accounting policies) and (ii) allowances for doubtful accounts.


			13

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A rollforward of the activity in the Company's reserves for returns, discounts, end-of-season markdowns, operational chargebacks, and certain cooperative advertising allowances is presented below:


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016				December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)													(millions)
Beginning reserve balance	$	231.5		$	228.9		$	202.8		$	239.7		Beginning reserve balance	$	171.9	$	195.5	$	204.7	$	176.5
Amount charged against revenue to increase reserve	125.3			151.8			418.6			479.6			Amount charged against revenue to increase reserve	86.0		138.5		169.9		421.0
Amount credited against customer accounts to decrease reserve	(155.6		)	(171.8		)	(427.8		)	(511.1		)	Amount credited against customer accounts to decrease reserve	(86.8)		(149.4)		(208.9)		(411.1)
Foreign currency translation	0.4			(7.8		)	8.0			(7.1		)	Foreign currency translation	4.1		1.1		9.5		(0.7)
Ending reserve balance	$	201.6		$	201.1		$	201.6		$	201.1		Ending reserve balance	$	175.2	$	185.7	$	175.2	$	185.7

An allowance for doubtful accounts is determined through an analysis of accounts receivable aging, assessments of collectability based on an evaluation of historical ~~and anticipated~~ trends, the financial condition of the Company's customers and antheir ability to withstand prolonged periods of adverse economic conditions, and evaluation of the impact of current and forecasted economic and market conditions over the related asset's contractual life, among other factors. The Company's estimated allowance for doubtful accounts as of December 26, 2020 reflects impacts associated with COVID-19 business disruptions, which include declines in retail traffic, tourism, and consumer spending on discretionary items.

A rollforward of the activity in the Company's allowance for doubtful accounts is presented below:

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Beginning reserve balance $ 17.3
$ 15.8
$ 11.6
$ 14.5
Amount recorded to expense to increase reserve^(a)
0.1
0.1
6.4
6.1
Amount written-off against customer accounts to decrease reserve (0.4 ) (3.3 ) (1.8 ) (7.9 )
Foreign currency translation —
(0.7 ) 0.8
(0.8 )
Ending reserve balance $ 17.0
$ 11.9
$ 17.0
$ 11.9


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Beginning reserve balance	$	46.3	$	15.6	$	71.5	$	15.7
Amount recorded to expense to increase (decrease) reserve(a)	5.1		0.4		(20.3)		1.9
Amount written-off against customer accounts to decrease reserve	(3.5)		(0.3)		(5.1)		(1.7)
Foreign currency translation	1.1		0.1		2.9		(0.1)
Ending reserve balance	$	49.0	$	15.8	$	49.0	$	15.8


^(a)	~~Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of operations.~~



			10

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

(a)Amounts recorded to bad debt expense are included within SG&A expenses in the consolidated statements of operations.

Concentration of Credit Risk

The Company sells its wholesale merchandise primarily to major department ~~and~~stores, specialty stores, and third-party digital partners around the world, and extends credit based on an evaluation of each customer's financial capacity and condition, usually without requiring collateral. In the Company's wholesale business, concentration of credit risk is relatively limited due to the large number of customers and their dispersion across many geographic areas. However, the Company has ~~three~~3 key wholesale customers that generate significant sales volume. During Fiscal ~~2017~~,2020, the Company's sales to its 3 largest wholesale ~~customer, Macy's, Inc. ("Macy's"),~~customers accounted for approximately ~~10%~~ ~~of total net revenues, and the Company's sales to its~~ ~~three~~ ~~largest wholesale customers (including Macy's) accounted for approximately~~ ~~21%~~18% of total net revenues. Substantially all of the Company's sales to its three largest wholesale customers related to its North America segment. As of December ~~30, 2017~~,26, 2020, these ~~three~~3 key wholesale customers constituted approximately ~~27%~~31% of ~~the Company's~~ total gross accounts receivable.


			14

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inventories

The Company holds inventory that is sold in its retail stores and digital commerce sites directly to consumers. The Company also holds inventory that is sold through wholesale distribution channels to major department stores, ~~and~~ specialty ~~retail stores. The Company also holds retail inventory that is sold in its own~~ stores, and ~~e-commerce sites directly to consumers.~~third-party digital partners. Substantially all of the Company's inventories ~~are comprised~~consist of finished goods, which are stated at the lower of cost or estimated realizable value, with cost ~~primarily~~ determined on a weighted-average cost basis. Inventory held by the Company totaled ~~$825.4~~$866.0 million, ~~$791.5~~$736.2 million, and ~~$984.1~~$904.6 million as of December ~~30, 2017, April 1, 2017,~~26, 2020, March 28, 2020, and December ~~31, 2016,~~28, 2019, respectively.

Implementation Costs Incurred in Cloud Computing Arrangements

For cloud computing arrangements that are a service contract, the Company capitalizes certain implementation costs incurred (depending on their nature) during the application development stage of the related project, and expenses costs during the preliminary project and post-implementation stages as they are incurred. Capitalized implementation costs are expensed on a straight-line basis over the reasonably certain term of the hosting arrangement, beginning when the module is ready for its intended use. The Company's cloud computing arrangements relate to various areas, including certain retail store and digital commerce operations, and corporate and administrative functions. Capitalized amounts related to such arrangements are recorded within prepaid expenses and other current assets and within other non-current assets in the consolidated balance sheets (see Note 6). Capitalized implementation costs expensed during the three-month and nine-month periods ended December 26, 2020 were $2.3 million and $6.0 million, respectively, and $1.1 million and $2.7 million during the three-month and nine-month periods ended December 28, 2019, respectively, and were recorded in SG&A expenses in the consolidated statements of operations.

See Note 4 for discussion of the Company's adoption of a new accounting standard related to implementation costs incurred in connection with cloud computing arrangements that are a service contract as of the beginning of Fiscal 2021.

Derivative Financial Instruments

The Company records ~~all~~ derivative financial instruments on its consolidated balance sheets at fair value. ~~For~~Changes in the fair value of derivative instruments that are designated and qualify for hedge accounting ~~the effective portion of changes in their fair value is~~are either (i) offset through earnings against the changes in fair value of the related hedged assets, liabilities, or firm commitments ~~through earnings~~ or (ii) recognized in equity as a component of accumulated other comprehensive income (loss) ("AOCI") until the hedged item is recognized in earnings, depending on whether the ~~derivative~~instrument is ~~being used to hedge~~hedging against changes in fair value or cash flows and net investments, respectively.

Each derivative instrument that qualifies for hedge accounting is expected to be highly effective ~~at reducing~~in offsetting the risk associated with the ~~exposure being hedged.~~related exposure. For each ~~derivative~~ instrument that is designated as a hedge, the Company ~~formally~~ documents the related risk management objective and strategy, including identification of the hedging instrument, the hedged item, and the risk exposure, as well as how hedge effectiveness will be assessed ~~prospectively and retrospectively~~ over the instrument's term. To assess hedge effectiveness at the inception of a hedging relationship, the Company generally uses regression analysis, a statistical method, to compare ~~the change~~changes in the fair value of the derivative instrument to changes in the ~~change in~~ fair value or cash flows of the related hedged item. The extent to which a hedging instrument has been and is expected to remain highly effective in achieving offsetting changes in fair value or cash flows is assessed ~~and documented~~ by the Company on at least a quarterly basis.

~~As a result of~~Given its use of derivative instruments, the Company is exposed to the risk that counterparties to such contracts will fail to meet their contractual obligations. To mitigate ~~this~~such counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings and certain other factors, adhering to established limits for credit exposure. The Company's established policies and procedures for mitigating credit risk from derivative transactions include ongoing review and assessment of its counterparties' creditworthiness. The Company also enters into master netting arrangements with counterparties, when possible, to further mitigate credit ~~risk associated with its derivative instruments.~~risk. In the event of default or termination (as such terms are defined within the respective master netting arrangement), these arrangements allow the Company to net-settle amounts payable and receivable related to multiple derivative transactions with the same counterparty. The master netting arrangements specify a number of events of default and termination, including ~~among others,~~ the failure to make timely payments.


			15

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair values of the Company's derivative instruments are recorded on its consolidated balance sheets on a gross basis. For cash flow reporting purposes, proceeds received or amounts paid upon the settlement of a derivative instrument are classified in the same manner as the related item being hedged, primarily within cash flows from operating ~~activities.~~



	11

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

activities for its forward foreign exchange contracts and within cash flows from investing activities for its cross-currency swap contracts, both as discussed below.

Cash Flow Hedges

~~Forecasted Inventory Transactions~~ ~~— recognized as part of the cost of the inventory being hedged within cost of goods sold~~ when the related inventory is ~~sold to a third party.~~

sold.

~~Intercompany Royalties/Settlement of Foreign Currency Balances~~ ~~— recognized within foreign currency gains (losses) during the period that the hedged balance is remeasured through earnings, generally through its settlement when the related payment occurs.~~

~~To the extent that~~If a derivative instrument ~~designated as a cash flow~~is dedesignated or if hedge accounting is discontinued because the instrument is not considered effective, any change in its fair value relating to such ineffectiveness is immediately recognized in earnings within foreign currency gains (losses). If it is determined that a derivative instrument has not been highly effective, and will continue notexpected to be highly effective in hedging the designated exposure, ~~hedge accounting is discontinued and~~any further gains (losses) are ~~immediately~~ recognized in earnings each period within ~~foreign currency gains (losses).~~other income (expense), net. Upon discontinuance of hedge accounting, the cumulative change in fair value of the derivative instrument ~~previously~~ recorded in AOCI is recognized in earnings when the related hedged item affects earnings, consistent with the ~~originally-documented~~ hedging strategy, unless the related forecasted transaction is ~~no longer~~ probable of not occurring, in which case the accumulated amount is immediately recognized within other income (expense), net.

Hedges of Net Investments in ~~earnings within foreign currency gains (losses).~~

~~Hedge of a Net Investment in a~~ Foreign ~~Operation~~Operations

The Company periodically uses cross-currency swap contracts to reduce risk associated with exchange rate fluctuations on certain of its net investments in foreign subsidiaries. Changes in the fair values of such derivative instruments that are designated as hedges of net investments in foreign operations are recorded in equity as a component of AOCI in the same manner as foreign currency translation ~~adjustments, to~~adjustments. In assessing the ~~extent they are effective as a hedge. To assess~~ effectiveness of such hedges, the Company uses a method based on changes in spot rates to measure the impact of foreign currency exchange rate fluctuations on both its foreign subsidiary net investment and the related ~~derivative~~ hedging instrument. ~~Accordingly,~~Under this method, changes in the fair value of the hedging instrument other than those due to changes in the spot rate are ~~excluded from the assessment of hedge effectiveness~~initially recorded in AOCI as a translation adjustment and are ~~recorded in the consolidated statement of operations with any other ineffectiveness~~amortized into earnings as interest ~~expense. Amounts~~expense using a systematic and rational method over the instrument's term. Changes in fair value associated with the effective portion ~~of net investment hedges~~(i.e., those due to changes in the spot rate) are recorded in AOCI as a translation adjustment and are released ~~from AOCI~~ and recognized in earnings only upon the sale or liquidation of the hedged net investment.

Fair Value Hedges

Changes in the fair value of a derivative instrument that is designated as a fair value hedge, along with offsetting changes in the fair value of the related hedged item attributable to the hedged risk, are recorded in earnings. ~~Hedge ineffectiveness is recorded in earnings to~~To the extent that the change in the fair value of the hedged item does not fully offset the change in the fair value of the hedging ~~instrument.~~instrument, the resulting net impact is reflected in earnings within the income statement line item associated with the hedged item.

Undesignated Hedges

~~All of the Company's~~The Company uses undesignated hedges ~~are entered into~~primarily to hedge ~~specific economic risks, particularly~~ foreign currency exchange rate risk related to ~~foreign currency-denominated balances.~~third-party and intercompany balances and exposures. Changes in the fair value of undesignated derivative instruments are ~~immediately~~ recognized in earnings each period within ~~foreign currency gains (losses).~~other income (expense), net.

See Note 12 for further discussion of the Company's derivative financial instruments.

Refer to Note 3 of the Fiscal ~~2017~~2020 10-K for a summary of all of the Company's significant accounting policies.



			1216

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


4.	4. Recently Issued ~~Accounting Standards~~

~~Targeted Improvements to~~ Accounting ~~for Hedging Activities~~Standards

Reference Rate Reform

In ~~August 2017,~~March 2020 and January 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. ~~2017-12, "Targeted Improvements~~2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04") and ASU No. 2021-01, "Reference Rate Reform: Scope" ("ASU 2021-01"), respectively. Together, ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for the application of U.S. GAAP, if certain criteria are met, to ~~Accounting for Hedging Activities" ("ASU 2017-12"). ASU 2017-12 amends existing hedge accounting guidance~~contract modifications, hedging relationships, and other arrangements that are expected to be impacted by ~~better aligning an entity's financial reporting with its risk management activities and by simplifying its application. Among its provisions, ASU 2017-12 eliminates~~ the ~~requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting, and generally requires that the entire change in fair value of~~global transition away from certain reference rates, such ~~instruments ultimately be presented in the same income statement line~~ as the ~~respective hedged item. Additionally,~~London Interbank Offered Rate ("LIBOR") and other interbank offered rates, towards new reference rates, such as the ~~updated~~Secured Overnight Financing Rate ("SOFR"). The guidance ~~reduces complexity~~ in ~~the accounting for certain~~ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships eases documentation and effectiveness assessment requirements, broadens the scope of risk components eligible to qualify for hedge accounting, and modifies certain disclosure requirements. ASU 2017-12 is effective for the Company beginning in its fiscal year ending March 28, 2020 ("Fiscal 2020"), with early adoption permitted, and is to be applied using a modified retrospective transition approach, except for the amended presentation and disclosure requirements, which are to be applied prospectively.through December 31, 2022. The Company is ~~currently~~ evaluating the impact that ~~ASU 2017-12~~the guidance will have on its consolidated financial statements and related ~~disclosures.~~disclosures, if adopted, and currently does not expect that it would be material.

~~Restricted Cash~~Implementation Costs Incurred in Cloud Computing Arrangements

In ~~November 2016,~~August 2018, the FASB issued ASU No. ~~2016-18, "Restricted Cash"~~2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" ("ASU ~~2016-18"~~2018-15"). ASU ~~2016-18 requires~~2018-15 addresses diversity in practice surrounding the accounting for costs incurred to implement a cloud computing hosting arrangement that is a service contract by establishing a model for capitalizing or expensing such costs, depending on their nature and the ~~statement~~stage of ~~cash flows explain~~ the ~~change~~related project during which they are incurred. Any capitalized costs are to be expensed over the ~~period~~reasonably certain term of the hosting arrangement and presented in the total of cash, cash equivalents, and restricted cash. Accordingly, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on the statement of cash flows. The Company early-adopted ASU 2016-18 during the first quarter of Fiscal 2018 and applied its provisions retrospectively. Other than the change in presentationsame line within the statement of ~~cash flows,~~operations as the expense for the arrangement's fees. ASU 2018-15 also requires enhanced qualitative and quantitative disclosures surrounding hosting arrangements that are service contracts.

The Company adopted ASU 2018-15 as of the beginning of Fiscal 2021. Prior to adoption, the Company had already generally accounted for implementation costs incurred in connection with cloud computing arrangements in a manner consistent with the new standard. Therefore, other than the new disclosure requirements, the adoption of ASU ~~2016-18~~2018-15 did not have an impact on the Company's consolidated financial statements. See Note 183 for ~~a reconciliation~~further discussion of ~~cash, cash equivalents, and restricted cash from~~ the ~~consolidated balance sheets to the consolidated statements~~Company's accounting for cloud computing arrangements.

Measurement of ~~cash flows.~~

~~Improvements to Employee Share-Based Payment Accounting~~Credit Losses on Financial Instruments

In ~~March~~June 2016, the FASB issued ASU No. ~~2016-09, "Improvements to Employee Share-Based Payment Accounting"~~2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU ~~2016-09"~~2016-13"). ASU ~~2016-09 simplifies several aspects~~2016-13, which was further updated and clarified by the FASB through issuance of additional related ASUs, amends the guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and investments in certain debt securities, by requiring upfront recognition of an allowance for credit losses expected to be incurred over an asset's contractual life based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability. It is expected that application of this "expected loss" model will result in earlier recognition of credit losses than the current "as incurred" model, under which losses are recognized only upon occurrence of an event that gives rise to the ~~accounting for~~incurrence of a probable loss. While the Company's historical bad debt write-off activity has generally been insignificant, similar to current practice, the extent of losses ultimately recognized will depend on prevailing conditions and ~~financial statement presentation~~ongoing consideration of ~~share-based payments, including the accounting for income taxes upon award settlement~~information and ~~forfeitures, and the classification~~forecasts that inform assessments of ~~excess tax benefits and shares surrendered for tax withholdings in the statement of cash flows.~~

collectability. The Company adopted ASU ~~2016-09 during~~2016-13 as of the ~~first quarter~~beginning of Fiscal ~~2018. Among its various provisions, ASU 2016-09 impacts~~2021 using the ~~accounting for income taxes upon award settlement by requiring that all excess tax benefits and shortfalls be reflected in~~modified retrospective basis. Overall, the income tax benefit (provision) in the statement of operations in the period that they are realized. This reflects a change from previous practice, which generally required that such activity be recorded in equity as additional paid-in-capital. This change, which was applied prospectively in the Company's consolidated financial statements, increased the Company's income tax provision by $0.5 million and $16.0 million for the three-month and nine-month periods ended December 30, 2017, respectively. Future impacts of this guidance on the Company's income tax benefit (provision) will depend largely on unpredictable events and other factors, including the timing of both employee stock option exercises and cancellations, if any, and the value realized upon vesting or exercise of shares compared to the grant date fair value of those shares, and will likely result in increased volatility. This increase in volatility is expected to be more pronounced during the first half of the Company's fiscal year due to the timing of annual stock-based compensation award vestings and stock option expirations.

Additionally, ASU 2016-09 changes the classification of excess tax benefits presented in the Company's consolidated statements of cash flows from a financing activity to an operating activity. The Company applied this change in classification on a retrospective basis by reclassifying $0.3 million of excess tax benefits from cash flows from financing activities to cash flows from operating activities for the nine months ended December 31, 2016.

Lastly, as permitted, the Company has elected to continue to estimate the impact of expected forfeitures when determining the amount of compensation cost to be recognized each period, as opposed to reflecting the impact of forfeitures only as they occur.



	13

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~The remaining provisions~~adoption of ASU ~~2016-09~~2016-13 did not have a material impact on the Company's consolidated financial statements.

~~Leases~~

In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires that a lessee's rights and fixed payment obligations under most leases be recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. ASU 2016-02 retains a dual model for classifying leases as either financing or operating, which governs the pattern of expense recognition to be reflected in the consolidated statement of operations. Variable lease payments based on performance, such as percentage-of-sales-based payments, will not be included in the measurement of right-of-use assets and lease liabilities. Rather, consistent with current practice, such amounts will be recognized as an expense in the period incurred. ASU 2016-02 is effective for the Company beginning in Fiscal 2020, with early adoption permitted, and is to be adopted using a modified retrospective transition approach, which requires application of the guidance at the beginning of the earliest comparative period presented. However, the FASB recently proposed an optional transition alternative, currently subject to approval, which would allow for application of the guidance at the beginning of the period in which it is adopted, rather than at the beginning of the earliest comparative period presented.

The Company is currently in the process of evaluating the impact that ASU 2016-02 will have on its consolidated financial statements and related disclosures. The Company's assessment efforts to date have included reviewing the standard's provisions and beginning to gather information to evaluate the landscape of its real estate, personal property, and other arrangements that may meet the definition of a lease. Based on these efforts, the Company currently anticipates that the adoption of ASU 2016-02 will result in a significant increase to its long-term assets and liabilities as, at a minimum, most of its current operating lease commitments will be subject to balance sheet recognition. The standard is also expected to result in enhanced quantitative and qualitative lease-related disclosures. Recognition of lease expense in the consolidated statement of operations is not anticipated to significantly change.

~~Revenue from Contracts with Customers~~

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 provides a single, comprehensive accounting model for revenues arising from contracts with customers that will supersede most existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue, representing the amount to which an entity expects to be entitled in exchange for providing promised goods or services (i.e., performance obligations), is recognized upon control of promised goods or services transferring to a customer. ASU 2014-09 also requires enhanced qualitative and quantitative revenue-related disclosures. Since its original issuance, the FASB has issued several additional related ASUs to address implementation concerns and further amend and clarify certain guidance within ASU 2014-09. ASU 2014-09 may be adopted on a full retrospective basis and applied to all prior periods presented, or on a modified retrospective basis through a cumulative adjustment recorded to opening retained earnings in the year of initial application.

The Company is currently in the process of evaluating the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company's assessment efforts to date have included reviewing current accounting policies, processes, and arrangements to identify potential differences that could arise from the application of ASU 2014-09. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (i.e., its retail and wholesale businesses), and the timing of recognition thereof, will remain substantially unchanged. Revenues for these businesses are generated through the sale of finished products, and will continue to be recognized at the point in time when merchandise is transferred to the customer and in an amount that considers the impacts of estimated returns, end-of-season markdowns, and other allowances that are variable in nature. For its licensing business, which has historically comprised approximately 2% of total revenues, the Company will continue to recognize the related revenue, including any contractually guaranteed minimum royalty amounts, over time consistent with current practice.

The Company will adopt ASU 2014-09 in its fiscal year ending March 30, 2019 ("Fiscal 2019") and anticipates doing so using the modified retrospective method through a cumulative adjustment recorded to the opening Fiscal 2019 retained earnings balance.



			1417

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Property and Equipment


5.	~~Property and Equipment~~

Property and equipment, net consists of the following:


	December 26, 2020		March 28, 2020
	(millions)
Land and improvements	$	15.3	$	15.3
Buildings and improvements	502.7		309.0
Furniture and fixtures	643.7		629.5
Machinery and equipment	395.5		378.8
Capitalized software	557.9		543.3
Leasehold improvements	1,274.1		1,194.5
Construction in progress	32.3		37.5
	3,421.5		3,107.9
Less: accumulated depreciation	(2,335.1)		(2,128.4)
Property and equipment, net	$	1,086.4	$	979.5

Depreciation expense was $55.1 million and $169.9 million during the three-month and nine-month periods ended December 26, 2020, respectively, and $62.3 million and $183.3 million during the three-month and nine-month periods ended December 28, 2019, respectively, and is recorded primarily within SG&A expenses in the consolidated statements of operations.

6. Other Assets and Liabilities

December 30,
2017 April 1,
2017
(millions)
Land and improvements $ 16.8
$ 16.8
Buildings and improvements 458.6
457.2
Furniture and fixtures 662.3
687.2
Machinery and equipment 429.9
414.0
Capitalized software 568.6
549.0
Leasehold improvements 1,201.0
1,179.1
Construction in progress 28.9
33.4
3,366.1
3,336.7
Less: accumulated depreciation (2,150.2 ) (2,020.7 )
Property and equipment, net $ 1,215.9
$ 1,316.0


6.	~~Other Assets and Liabilities~~

Prepaid expenses and other current assets consist of the following:


						December 26, 2020		March 28, 2020
	December 30, 2017		April 1, 2017			(millions)
	(millions)
Non-trade receivables					Non-trade receivables	$	30.0	$	27.0
Other taxes receivable	$	147.9	$	127.8	Other taxes receivable	24.9		24.7
Prepaid rent expense	44.5		37.4
Prepaid samples	14.0		5.9
Restricted cash	13.4		9.8
Inventory return asset					Inventory return asset	15.4		8.9
Prepaid advertising and marketing	10.4		4.1		Prepaid advertising and marketing	13.7		10.1
Prepaid software maintenance	7.4		6.5		Prepaid software maintenance	10.7		14.8
Tenant allowances receivable	6.9		16.4		Tenant allowances receivable	8.8		1.8
Cloud computing arrangement implementation costs					Cloud computing arrangement implementation costs	7.9		8.4
Prepaid logistic services					Prepaid logistic services	7.3		6.6
Prepaid insurance					Prepaid insurance	5.4		2.2
Prepaid occupancy expense					Prepaid occupancy expense	4.4		6.7
Derivative financial instruments	6.7		23.0		Derivative financial instruments	0.2		13.7
Other prepaid expenses and current assets	53.6		49.5		Other prepaid expenses and current assets	45.8		35.9
Total prepaid expenses and other current assets	$	304.8	$	280.4	Total prepaid expenses and other current assets	$	174.5	$	160.8



			1518

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other non-current assets consist of the following:


						December 26, 2020		March 28, 2020
	December 30, 2017		April 1, 2017			(millions)
Security deposits					Security deposits	$	30.7	$	29.4
Restricted cash					Restricted cash	8.4		8.0
	(millions)
Non-current investments	$	83.3	$	21.4
Restricted cash	34.1		33.7
Security deposits	28.9		26.5
Cloud computing arrangement implementation costs					Cloud computing arrangement implementation costs	6.6		4.9
Derivative financial instruments	0.2		9.6		Derivative financial instruments	2.7		48.6
Other non-current assets	33.8		40.0		Other non-current assets	23.9		21.0
Total other non-current assets	$	180.3	$	131.2	Total other non-current assets	$	72.3	$	111.9

Accrued expenses and other current liabilities consist of the following:


						December 26, 2020		March 28, 2020
	December 30, 2017		April 1, 2017			(millions)
	(millions)
Accrued inventory					Accrued inventory	$	246.5	$	167.1
Accrued operating expenses	$	223.9	$	188.0	Accrued operating expenses	245.9		176.4
Accrued payroll and benefits	215.6		173.5		Accrued payroll and benefits	189.0		186.2
Restructuring reserve					Restructuring reserve	149.0		25.5
Other taxes payable	202.4		172.2		Other taxes payable	67.2		47.9
Accrued inventory	179.9		154.9
Restructuring reserve	84.0		140.8
Accrued capital expenditures					Accrued capital expenditures	26.0		29.1
Deferred income					Deferred income	20.3		14.6
Finance lease obligations					Finance lease obligations	19.5		9.8
Derivative financial instruments	46.5		12.3		Derivative financial instruments	3.3		6.9
Dividends payable	40.6		40.5		Dividends payable	0		49.8
Accrued capital expenditures	33.9		45.7
Deferred income	33.9		29.7
Capital lease obligations	22.1		22.6
Other accrued expenses and current liabilities	6.3		2.5		Other accrued expenses and current liabilities	8.5		3.8
Total accrued expenses and other current liabilities	$	1,089.1	$	982.7	Total accrued expenses and other current liabilities	$	975.2	$	717.1

Other non-current liabilities consist of the following:


	December 26, 2020		March 28, 2020
	(millions)
Finance lease obligations	$	378.4	$	189.4
Deferred lease incentives and obligations	62.3		57.8
Derivative financial instruments	57.3		0
Accrued benefits and deferred compensation	34.6		19.5
Deferred tax liabilities	11.3		10.0
Other non-current liabilities	36.0		31.8
Total other non-current liabilities	$	579.9	$	308.5

December 30,
2017 April 1,
2017
(millions)
Capital lease obligations $ 238.3
$ 250.9
Deferred rent obligations 203.7
211.1
Derivative financial instruments 37.8
9.4
Deferred tax liabilities 7.5
11.8
Deferred compensation 6.9
7.8
Other non-current liabilities 69.6
50.6
Total other non-current liabilities $ 563.8
$ 541.6



			1619

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Impairment of Assets


7.	~~Impairment of Assets~~

The Company recorded non-cash impairment charges of ~~$2.2~~$2.6 million and ~~$14.0~~$26.9 million during the three-month and nine-month periods ended December ~~30, 2017,~~26, 2020, respectively, and ~~$10.3~~$3.0 million and ~~$56.7~~$6.5 million during the three-month and nine-month periods ended December ~~31, 2016,~~28, 2019, respectively, to ~~write off~~write-down certain ~~fixed~~long-lived assets ~~related to its domestic and international stores, shop-within-shops, and corporate offices~~ in connection with ~~the Way Forward Plan~~its restructuring activities (see Note 8).

Additionally, the Company recorded non-cash impairment charges of $8.8 million during the nine months ended December 26, 2020 to write-down long-lived assets primarily related to a certain previously exited real estate location for which the related lease agreement has not yet expired. During the three-month and nine-month periods ended December ~~30, 2017,~~28, 2019, the Company recorded non-cash impairment charges of ~~$1.7~~$11.4 million and ~~$10.8~~$15.2 million, respectively, to ~~write off~~write-down certain ~~fixed~~long-lived assets related to underperforming stores ~~and shop-within-shops~~ as a result of its on-going store portfolio evaluation.

See Note 11 for further discussion of ~~the non-cash~~these impairment ~~charges recorded by the Company during the fiscal periods presented.~~charges.


8.	~~Restructuring and Other Charges~~

8. Restructuring and Other Charges

A description of significant restructuring and other activities and their related costs is ~~included~~provided below.

~~Way Forward~~Fiscal 2021 Strategic Realignment Plan

~~On June 2, 2016,~~The Company has begun efforts to realign its resources to support future growth and profitability, and to create a sustainable cost structure. The key areas of the Company's evaluation include its: (i) team organizational structures and ways of working; (ii) real estate footprint and related costs across corporate offices, distribution centers, and direct-to-consumer retail and wholesale doors; and (iii) brand portfolio.

In connection with the first initiative, on September 17, 2020, the Company's Board of Directors approved a restructuring plan ~~with the objective of delivering sustainable, profitable sales growth and long-term value creation for shareholders~~ (the ~~"Way Forward~~"Fiscal 2021 Strategic Realignment Plan")~~. The Company is refocusing on~~ to reduce its core brands and evolving its product, marketing, and shopping experience to increase desirability and relevance. It is also evolving its operating model to enable sustainable, profitable sales growth by significantly improving quality of sales, reducing supply chain lead times, improving its sourcing, and executing a disciplined multi-channel distribution and expansion strategy. As part of the Way Forward Plan, the Company is rightsizing its cost structure and implementing a return on investment-driven financial model to free up resources to invest in the brand and drive high-quality sales. The Way Forward Plan includes strengthening the Company's leadership team and creating a more nimble organization by moving from an average of nine to six layers of management. The Way Forward Plan also includes the discontinuance of the Company's Denim & Supply brand and the integration of its denim product offerings into its Polo Ralph Lauren brand. Collectively, these actions, which were substantially completed during Fiscal 2017, resulted in a reduction inglobal workforce ~~and the closure of certain stores and shop-within-shops.~~

On March 30, 2017, the Company's Board of Directors approved the following additional restructuring-related activities associated with the Way Forward Plan: (i) the restructuring of its in-house global e-commerce platform which was in development and shifting to a more cost-effective, flexible e-commerce platform through a new agreement with Salesforce's Commerce Cloud, formerly known as Demandware; (ii) the closure of its Polo store at 711 Fifth Avenue in New York City; and (iii) the further streamlining of the organization and the execution of other key corporate actions in line with the Company's Way Forward Plan. Together, these actions are an important part of the Company's efforts to achieve its stated objective to return to sustainable, profitable growth and invest in the future. These additional restructuring-related activities will result in a further reduction in workforce and the closure of certain corporate office and store locations, and are expected to be largely completed by the end of Fiscal ~~2018. The remaining activities, which are primarily lease-related, are~~2021. Additionally, during its preliminary review of its store portfolio during the second quarter of Fiscal 2021, the Company made the decision to close its Polo store on Regent Street in London.

On October 29, 2020, the Company announced the planned transition of its Chaps brand to a fully licensed business model, consistent with its long-term brand elevation strategy in connection with its third initiative. Specifically, the Company entered into a multi-year licensing partnership, taking effect on August 1, 2021 after a transition period, with an affiliate of 5 Star Apparel LLC, a division of the OVED Group, to manufacture, market, and distribute Chaps menswear and womenswear. This agreement is expected to ~~shift into Fiscal 2019.~~create incremental value for the Company by enabling an even greater focus on elevating its core brands in the marketplace, reducing its direct exposure to the North America department store channel, and setting up Chaps to deliver on its potential with an experienced partner that is focused on nurturing the brand.

Additionally, on February 3, 2021, the Company’s Board of Directors approved additional realignment actions related to its real estate initiative. Specifically, the Company plans to further rightsize and consolidate its global corporate offices to better align with its current organizational profile and new ways of working. The Company also expects to close certain of its stores to improve overall profitability. Additionally, the Company plans to complete the consolidation of its existing North America distribution centers in order to drive greater efficiencies, improve sustainability, and deliver a better consumer experience.

In connection with ~~the Way Forward Plan,~~these collective realignment initiatives, the Company ~~currently~~now expects to incur total estimated pre-tax charges of approximately ~~$770~~$300 million to $350 million, comprised of cash-related restructuring charges of approximately ~~$450~~$185 million to $200 million and non-cash charges of approximately ~~$320 million. Cumulative cash and non-cash charges incurred since inception were $352.1~~$115 million and $293.3 million, respectively. Of the remaining charges yet to be incurred, the Company expects approximately $50 million will be recorded during the fourth quarter of Fiscal 2018 and approximately $75 million to $85 million will be recorded during Fiscal 2019.$150 million. In addition to these ~~charges,~~actions, the Company ~~also incurred an~~expects to execute additional ~~non-cash charge of $155.2 million during Fiscal 2017~~restructuring-related actions associated with ~~the destruction of inventory out of current liquidation channels~~its aforementioned initiatives in ~~line with its Way Forward Plan.~~

order to further support future growth and profitability.



			1720

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the charges recorded in connection with the ~~Way Forward~~Fiscal 2021 Strategic Realignment Plan during the ~~three-month~~fiscal periods presented (inclusive of immaterial other restructuring-related charges previously recorded during the first quarter of Fiscal 2021) is as follows:


	December 26, 2020
	Three Months Ended		Nine Months Ended
	(millions)
Cash-related restructuring charges:
Severance and benefit costs	$	3.1	$	159.4

Other cash charges	5.8		9.7
Total cash-related restructuring charges	8.9		169.1
Non-cash charges:
Impairment of assets (see Note 7)	2.6		26.9
Inventory-related charges(a)	7.0		8.3


Total non-cash charges	9.6		35.2
Total charges	$	18.5	$	204.3

(a)Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.

A summary of current period activity in the restructuring reserve related to the Fiscal 2021 Strategic Realignment Plan is as follows:


	Severance and Benefit Costs		Other Cash Charges		Total
	(millions)
Balance at March 28, 2020	$	0	$	0	$	0
Additions charged to expense	159.4		9.7		169.1
Cash payments charged against reserve	(18.6)		(7.9)		(26.5)
Non-cash adjustments	1.5		0		1.5
Balance at December 26, 2020	$	142.3	$	1.8	$	144.1


			21

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fiscal 2019 Restructuring Plan

On June 4, 2018, the Company's Board of Directors approved a restructuring plan associated with the Company's strategic objective of operating with discipline to drive sustainable growth (the "Fiscal 2019 Restructuring Plan"). The Fiscal 2019 Restructuring Plan included the following restructuring-related activities: (i) rightsizing and ~~nine-month~~consolidation of the Company's global distribution network and corporate offices; (ii) targeted severance-related actions; and (iii) closure of certain of its stores and shop-within-shops.

Actions associated with the Fiscal 2019 Restructuring Plan are complete and no additional charges are expected to be incurred in connection with this plan. A summary of the charges recorded in connection with the Fiscal 2019 Restructuring Plan during the fiscal periods ~~ended December 30, 2017 and December 31, 2016,~~presented, as well as the cumulative charges recorded since its inception, is as follows:


	December 28, 2019
	Three Months Ended		Nine Months Ended		Cumulative Charges
	(millions)
Cash-related restructuring charges:
Severance and benefit costs	$	3.0	$	17.9	$	90.3
Lease termination and store closure costs	0		0.5		2.3
Other cash charges	1.0		2.1		10.8
Total cash-related restructuring charges	4.0		20.5		103.4
Non-cash charges:
Impairment of assets (see Note 7)	3.0		6.5		19.0
Inventory-related charges(a)	0		1.0		8.2
Accelerated stock-based compensation expense(b)	0		3.6		3.6
Loss on sale of property(c)	0		0		11.6
Total non-cash charges	3.0		11.1		42.4
Total charges	$	7.0	$	31.6	$	145.8

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016 Cumulative Charges
(millions)
Cash-related restructuring charges:
Severance and benefit costs $ 7.4
$ 14.1
$ 25.3
$ 115.7
$ 208.0
Lease termination and store closure costs 10.9
49.5
28.5
64.2
115.8
Other cash charges 0.8
3.1
9.2
9.1
28.3
Total cash-related restructuring charges 19.1
66.7
63.0
189.0
352.1
Non-cash charges:
Impairment of assets (see Note 7) 2.2
10.3
14.0
56.7
248.6
Inventory-related charges^(a)
—
14.4
1.3
149.4
199.2
Accelerated stock-based compensation
expense^(b)
0.7
—
0.7
—
0.7
Total non-cash charges 2.9
24.7
16.0
206.1
448.5
Total charges $ 22.0
$ 91.4
$ 79.0
$ 395.1
$ 800.6

(a)Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.

^(a)

(b)Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.

(c)Loss on sale of property, which was recorded within restructuring and other charges in the consolidated statements of operations, was incurred in connection with the sale of one of the Company's distribution centers in North America.

Cumulative inventory-related charges include $155.2 million associated with the destruction of inventory out of current liquidation channels, of which $10.9 million and $124.7 million was recorded during the three-month and nine-month periods ended December 31, 2016, respectively. Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.


^(b)	Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.

A summary of current period activity in the restructuring reserve related to the ~~Way Forward~~Fiscal 2019 Restructuring Plan is as follows:

Severance and Benefit Costs
Lease Termination
and Store
Closure Costs
Other Cash Charges Total
(millions)
Balance at April 1, 2017 $ 94.3
$ 34.3
$ 6.6
$ 135.2
Additions charged to expense 25.3
28.5
9.2
63.0
Cash payments charged against reserve (74.7 ) (18.0 ) (9.0 ) (101.7 )
Non-cash adjustments 0.6
7.8
—
8.4
Balance at December 30, 2017 $ 45.5
$ 52.6
$ 6.8
$ 104.9


	Severance and Benefit Costs		Other Cash Charges		Total
	(millions)
Balance at March 28, 2020	$	23.5	$	0.6	$	24.1
Additions charged to expense	0		0		0
Cash payments charged against reserve	(18.2)		(0.6)		(18.8)

Balance at December 26, 2020	$	5.3	$	0	$	5.3



			1822

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Charges

~~Global Reorganization Plan~~

~~On May 12, 2015, the Company's Board~~The Company recorded other charges of ~~Directors approved a reorganization~~$1.0 million and restructuring plan comprised of the following major actions: (i) the reorganization of the Company's operating structure in order to streamline the Company's business processes to better align its cost structure with its long-term growth strategy; (ii) a strategic store and shop-within-shop performance review conducted by region and brand; (iii) a targeted corporate functional area review; and (iv) the consolidation of certain of the Company's luxury lines (collectively, the "Global Reorganization Plan"). The Global Reorganization Plan resulted in a reduction in workforce and the closure of certain stores and shop-within-shops.

Actions associated with the Global Reorganization Plan were completed by the end of the first quarter of Fiscal 2017 and no additional charges are expected to be incurred in relation to this plan. A summary of the charges recorded in connection with the Global Reorganization Plan$8.3 million during the three-month and nine-month periods ended December ~~31, 2016, as well as the cumulative charges recorded since its inception, is as follows:~~

December 31, 2016
Three Months Ended Nine Months Ended
Cumulative
Charges
(millions)
Cash-related restructuring charges:
Severance and benefit costs $ —
$ 4.7
$ 69.1
Lease termination and store closure costs —
0.2
8.0
Other cash charges —
—
13.8
Total cash-related restructuring charges —
4.9
90.9
Non-cash charges:
Impairment of assets —
—
27.2
Inventory-related charges^(a)
—
—
20.4
Accelerated stock-based compensation expense^(b)
—
—
8.9
Total non-cash charges —
—
56.5
Total charges $ —
$ 4.9
$ 147.4


^(a)	~~Inventory-related charges are recorded within cost of goods sold in the consolidated statements of operations.~~


^(b)	Accelerated stock-based compensation expense, which is recorded within restructuring and other charges in the consolidated statements of operations, was recorded in connection with vesting provisions associated with certain separation agreements.

~~A summary of current period activity in the restructuring reserve related to the Global Reorganization Plan is as follows:~~

Severance and Benefit Costs
Lease Termination
and Store
Closure Costs
Other Cash Charges Total
(millions)
Balance at April 1, 2017 $ 8.6
$ 3.4
$ 0.2
$ 12.2
Cash payments charged against reserve (4.6 ) (1.9 ) —
(6.5 )
Balance at December 30, 2017 $ 4.0
$ 1.5
$ 0.2
$ 5.7



	19

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~Other Charges~~

~~During the three-month~~26, 2020, respectively, and ~~nine-month periods ended December 30, 2017, the Company recorded other charges of $3.5~~$3.0 million and ~~$10.5~~$6.2 million respectively, related to depreciation expense associated with the Company's former Polo store at 711 Fifth Avenue in New York City, recorded after the store closed during the first quarter of Fiscal 2018 in connection with the Way Forward Plan. Although the Company is no longer generating revenue or has any other economic activity associated with its former Polo store, it continues to incur depreciation expense due to its involvement at the time of construction.

Additionally, during the first quarter of Fiscal 2018, the Company recorded other charges of $6.7 million (inclusive of accelerated stock-based compensation expense of $2.1 million), primarily related to the departure of Mr. Stefan Larsson as the Company's President and Chief Executive Officer and as a member of its Board of Directors, effective as of May 1, 2017. Refer to Note 10 of the Fiscal 2017 10-K for additional discussion regarding Mr. Larsson's departure.

These other charges were partially offset by the favorable impact of $2.2 million related to the reversal of reserves associated with the settlement of certain non-income tax issues during the second quarter of Fiscal 2018.


9.	~~Income Taxes~~

~~U.S. Tax Reform~~

On December 22, 2017, President Trump signed into law new tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA"), which became effective January 1, 2018. The TCJA significantly revises U.S. tax law by, among other provisions, lowering the U.S. federal statutory income tax rate from 35% to 21%, creating a territorial tax system that includes a mandatory one-time transition tax on previously deferred foreign earnings, and eliminating or reducing certain income tax deductions.

ASC Topic 740, "Income Taxes," requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the TCJA's provisions, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118") on December 22, 2017, which allows companies to record the tax effects of the TCJA on a provisional basis based on a reasonable estimate, and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information becomes available. The measurement period ends when a company has obtained, prepared, and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year from enactment.

During the third quarter of Fiscal 2018, the Company recorded one-time charges of $231.3 million within its income tax provision in connection with the TCJA, of which $215.5 million related to the mandatory transition tax, which it expects to pay over an eight-year period (see Note 13). The remaining charge of $15.8 million related to the revaluation of the Company's deferred tax assets and liabilities. Collectively, these one-time charges, which were recorded on a provisional basis, negatively impacted the Company's effective tax rate by 12,410 basis points and 4,980 basis points during the three-month and nine-month periods ended December ~~30, 2017,~~28, 2019, respectively, primarily related to rent and ~~lowered~~occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired.

The Company also recorded other charges of $20.8 million during the nine months ended December 28, 2019 related to the donation of net cash proceeds received from the sale of its ~~diluted earnings per share by $2.80 during each of these periods. The provisional amounts were based on~~corporate jet. This donation was made to the ~~Company's present interpretations of~~Ralph Lauren Corporate Foundation (formerly known as the TCJA and current available information, including assumptions and expectations about future events, such as its projected financial performance, and are subject to further refinement as additional information becomes available (including the Company's actual full Fiscal 2018 results of operations and financial condition, as well as potential new or interpretative guidance issued by the FASB or the Internal Revenue Service and other tax agencies) and further analyses are completed.Polo Ralph Lauren Foundation), a non-profit, charitable foundation that supports various philanthropic programs.

9. Income Taxes

Effective Tax Rate

The Company's effective tax rate, which is calculated by dividing each fiscal period's income tax ~~provision~~benefit (provision) by pretax income (loss), was ~~143.9%~~26.2% and ~~73.8%~~(18.9%) during the three-month and nine-month periods ended December ~~30, 2017,~~26, 2020, respectively, and ~~34.0%~~(45.1%) and ~~36.0%~~(3.2%) during the three-month and nine-month periods ended December ~~31, 2016,~~28, 2019, respectively.

The effective tax rate for the three months ended December 26, 2020 was higher than the U.S. federal statutory income tax rate of 21% primarily due to incremental tax expense resulting from new legislation enacted in connection with the European Union’s anti-tax avoidance directive (as discussed further below), valuation allowances recorded against certain deferred tax assets as a result of significant business disruptions attributable to COVID-19 that are expected to impact the ultimate realizability of such assets, and a decrease in the expected net operating loss carryback benefit allowed under the CARES Act (as defined further below). The effective tax rate for the nine months ended December 26, 2020 was lower than the U.S. federal statutory income tax rate of 21% primarily due to incremental tax expense resulting from new legislation enacted in connection with the European Union’s anti-tax avoidance directive, valuation allowances recorded against certain deferred tax assets as a result of significant business disruptions attributable to COVID-19, and tax impacts on stock based compensation and other permanent adjustments, partially offset by expected net operating loss carrybacks allowed under the CARES Act. The effective tax rates for the three-month and nine-month periods ended December ~~30, 2017~~28, 2019 were ~~higher~~lower than the U.S. federal statutory income tax rate of ~~35%~~21% primarily due to the one-time income tax benefit recorded in connection with Swiss tax reform (as discussed further below), lower income tax reserves largely associated with the settlement of certain international income tax audits, and the favorable impact of tax benefits associated with provision to tax return adjustments.

In response to the COVID-19 pandemic, various governments worldwide have enacted, or are in the process of enacting, measures to provide aid and economic relief to companies adversely impacted by the pandemic. For example, on March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The CARES Act includes various provisions, including the modification of net operating loss carryback periods and limitation, modification to interest deduction limitations, and creation of refundable employee retention tax credits, among other provisions. Certain of these provisions will favorably impact the Company's Fiscal 2021 operating results.

Swiss Tax Reform

In May 2019, a public referendum was held in Switzerland that approved the Federal Act on Tax Reform and AHV Financing (the "Swiss Tax Act"), which became effective January 1, 2020. The Swiss Tax Act eliminates certain preferential tax items at both the federal and cantonal levels for multinational companies, and provides the cantons with parameters for establishing local tax rates and regulations. The Swiss Tax Act also provides transitional provisions, one of which allows eligible companies to increase the tax basis of certain assets based on the value generated by their business in previous years, and amortize such adjustment as a tax deduction over a transitional period.

During the second quarter of Fiscal 2020, the Swiss Tax Act was enacted into law, resulting in an immaterial adjustment associated with the revaluation of the Company's Swiss deferred tax assets and liabilities and the then estimated annual effective tax rate. Subsequently, as a result of additional information received from the ~~one-time charges~~tax authorities and analyses performed related to the transitional provision noted above, the Company recorded ~~in connection with the TCJA, as previously discussed, partially offset by the favorable impact of the proportion of earnings generated in lower taxed foreign jurisdictions versus the U.S. and foreign~~a one-time income tax ~~reserve releases. Additionally,~~benefit and corresponding deferred tax asset of $134.1 million during the third quarter of Fiscal 2020. This one-time benefit decreased the Company's effective tax rate ~~for~~by 5,820 basis points and 2,180 basis points during the ~~nine months~~three-month and nine-month periods ended



			2023

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 28, 2019, respectively. During the fourth quarter of Fiscal 2020, the Company adjusted this one-time benefit to $122.9 million as a result of further analysis.

~~December 30, 2017 reflected~~Subsequently, during the ~~negative impact~~third quarter of Fiscal 2021, the ~~adoption of ASU 2016-09 (see Note 4), as well as~~Company reduced its one-time tax benefit by $14.2 million due to new legislation enacted in connection with the ~~unfavorable impact of additional income tax reserves associated with certain income tax audits.~~

~~The~~European Union's anti-tax avoidance directive, which increased the Company's effective tax ~~rates for~~rate by 870 basis points and 3,580 basis points during the three-month and nine-month periods ended December 31, 2016 reflected the favorable impact of the proportion of earnings generated in lower taxed foreign jurisdictions versus the U.S., partially offset by valuation allowances and adjustments recorded on deferred tax assets, certain nondeductible expenses, and unrecognized tax benefits recorded on current year tax positions. The effective tax rate for the nine months ended December 31, 2016 was also unfavorably impacted by additional tax reserves associated with an income tax settlement and certain income tax audits.26, 2020, respectively.

Uncertain Income Tax Benefits

The Company classifies interest and penalties related to unrecognized tax benefits as part of its income tax ~~provision.~~benefit (provision). The total amount of unrecognized tax benefits, including interest and penalties, was ~~$76.4~~$91.4 million and ~~$62.7~~$88.9 million as of December ~~30, 2017~~26, 2020 and ~~April 1, 2017,~~March 28, 2020, respectively, and is included within non-current liability for unrecognized tax benefits in the consolidated balance sheets. ~~The net addition of $13.7 million in unrecognized tax benefits, including interest and penalties, primarily related to additional unrecognized tax benefits recorded.~~

The total amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate was ~~$60.5~~$68.5 million and ~~$46.7~~$71.7 million as of December ~~30, 2017~~26, 2020 and ~~April 1, 2017,~~March 28, 2020, respectively.

Future Changes in Unrecognized Tax Benefits

The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future.

The Company files a consolidated U.S. federal income tax return, as well as tax returns in various state, local, and foreign jurisdictions. The Company is generally no longer subject to ~~income~~examinations by the relevant tax ~~examinations~~authorities for years prior to its fiscal year ended ~~April 3, 2010.~~March 30, 2013.


~~10.~~	~~Debt~~

10. Debt

Debt consists of the following:


	December 26, 2020		March 28, 2020
	(millions)
$300 million 2.625% Senior Notes(a)	$	0	$	299.6
$400 million 3.750% Senior Notes(b)	396.9		396.4
$500 million 1.700% Senior Notes(c)	498.0		0
$750 million 2.950% Senior Notes(d)	737.0		0
Borrowings outstanding under credit facilities	0		475.0
Total debt	1,631.9		1,171.0
Less: short-term debt and current portion of long-term debt	0		774.6
Total long-term debt	$	1,631.9	$	396.4

December 30,
2017 April 1,
2017
(millions)
$300 million 2.125% Senior Notes^(a)
$ 298.3
$ 298.1
$300 million 2.625% Senior Notes^(b)
290.3
290.1
Total debt 588.6
588.2
Less: current portion of long-term debt 298.3
—
Long-term debt $ 290.3
$ 588.2

(a)The carrying value of the 2.625% Senior Notes as of March 28, 2020 is presented net of unamortized debt issuance costs and original issue discount of $0.2 million and also reflects an adjustment of $0.2 million associated with a related interest rate swap contract (see Note 12).

^(a)

During its fiscal year ended April 2, 2016 ("Fiscal 2016"), the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.125% Senior Notes, as defined below (see Note 12). Accordingly, the carrying value of the 2.125% Senior Notes as of December 30, 2017 and April 1, 2017 reflects adjustments of $1.3 million and $1.2 million, respectively, for the change in fair value attributable to the benchmark interest rate. The carrying value of the 2.125% Senior Notes is also net of unamortized debt issuance costs and discount of $0.4 million and $0.7 million as of December 30, 2017 and April 1, 2017, respectively.


^(b)	During Fiscal 2016, the Company entered into an interest rate swap contract which it designated as a hedge against changes in the fair value of its fixed-rate 2.625% Senior Notes, as defined below (see Note 12). Accordingly, the carrying

(b)The carrying value of the 3.750% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $3.1 million and $3.6 million as of December 26, 2020 and March 28, 2020, respectively.

(c)The carrying value of the 1.700% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $2.0 million as of December 26, 2020.



			2124

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

value of the 2.625% Senior Notes as of December 30, 2017 and April 1, 2017 reflects adjustments of $8.4 million and $8.2 million, respectively, for the change in fair value attributable to the benchmark interest rate. (d)The carrying value of the ~~2.625%~~2.950% Senior Notes is ~~also~~presented net of unamortized debt issuance costs and original issue discount of ~~$1.3 million and $1.7~~$13.0 million as of December ~~30, 2017 and April 1, 2017, respectively.~~26, 2020.

Senior Notes

In ~~September 2013,~~August 2018, the Company completed a registered public debt offering and issued ~~$300~~$400 million aggregate principal amount of unsecured senior notes due September ~~26, 2018,~~15, 2025, which bear interest at a fixed rate of ~~2.125%~~3.750%, payable semi-annually (the ~~"2.125%~~"3.750% Senior Notes"). The ~~2.125%~~3.750% Senior Notes were issued at a price equal to ~~99.896%~~99.521% of their principal amount. The proceeds from this offering were used for general corporate purposes, including repayment of the Company's previously outstanding ~~€209~~$300 million principal amount of ~~4.5% Euro-denominated~~unsecured 2.125% senior notes ~~which~~that matured ~~on October 4, 2013.~~September 26, 2018 (the "2.125% Senior Notes").

In ~~August 2015,~~June 2020, the Company completed ~~a second~~another registered public debt offering and issued an additional ~~$300~~$500 million aggregate principal amount of unsecured senior notes due ~~August 18, 2020,~~June 15, 2022, which bear interest at a fixed rate of ~~2.625%~~1.700%, payable semi-annually (the "1.700% Senior Notes"), and $750 million aggregate principal amount of unsecured senior notes due June 15, 2030, which bear interest at a fixed rate of 2.950%, payable semi-annually (the "2.950% Senior Notes"). The 1.700% Senior Notes and 2.950% Senior Notes were issued at prices equal to 99.880% and 98.995% of their principal amounts, respectively. The proceeds from these offerings are being used for general corporate purposes, which included the repayment of $475 million previously outstanding under the Company's Global Credit Facility (as defined below) on June 3, 2020 and repayment of its previously outstanding $300 million principal amount of unsecured 2.625% senior notes that matured August 18, 2020 (the "2.625% Senior Notes"). ~~The 2.625% Senior Notes were issued at a price equal to 99.795% of their principal amount. The proceeds from this offering were used for general corporate purposes.~~

The Company has the option to redeem the ~~2.125%~~3.750% Senior Notes, 1.700% Senior Notes, and ~~2.625%~~2.950% Senior Notes (collectively, the "Senior Notes"), in whole or in part, at any time at a price equal to accrued and unpaid interest on the redemption date plus the greater of (i) 100% of the principal amount of the series of Senior Notes to be redeemed or (ii) the sum of the present value of Remaining Scheduled Payments, as defined in the supplemental indentures governing such Senior Notes (together with the indenture governing the Senior Notes, the "Indenture"). The Indenture contains certain covenants that restrict the Company's ability, subject to specified exceptions, to incur certain liens; enter into sale and leaseback transactions; consolidate or merge with another party; or sell, lease, or convey all or substantially all of the Company's property or assets to another party. However, the Indenture does not contain any financial covenants.

Commercial Paper

~~In May 2014, the~~The Company ~~initiated~~has a commercial paper borrowing program ~~(the "Commercial Paper Program")~~ that ~~allowed~~allows it to issue up to ~~$300~~$500 million of unsecured commercial paper notes through private placement using third-party ~~broker-dealers. In May 2015, the Company expanded its Commercial~~broker-dealers (the "Commercial Paper ~~Program to allow for a total issuance of up to $500 million of unsecured commercial paper notes.~~Program").

Borrowings under the Commercial Paper Program are supported by the Global Credit Facility, as defined below. Accordingly, the Company does not expect combined borrowings outstanding under the Commercial Paper Program and Global Credit Facility to exceed $500 million. Commercial Paper Program borrowings may be used to support the Company's general working capital and corporate needs. Maturities of commercial paper notes vary, but cannot exceed 397 days from the date of issuance. Commercial paper notes issued under the Commercial Paper Program rank equally with the Company's other forms of unsecured indebtedness. As of December ~~30, 2017~~,26, 2020, there were no0 borrowings outstanding under the Commercial Paper Program.

Revolving Credit Facilities

Global Credit Facility

In ~~February 2015,~~August 2019, the Company replaced its existing credit facility and entered into ~~an amended and restated~~a new credit facility ~~(which was further amended in March 2016)~~ that provides for a ~~$500~~$500 million senior unsecured revolving line of credit through ~~February 11, 2020~~August 12, 2024 (the "Global Credit Facility") under terms and conditions substantially similar to those ~~previously in effect.~~of the previous facility. The Global Credit Facility is also used to support the issuance of letters of credit and ~~the~~ maintenance of the Commercial Paper Program. Borrowings under the Global Credit Facility may be denominated in U.S. Dollars and certain other currencies, including Euros, Hong Kong Dollars, and Japanese ~~Yen. The~~Yen, and are guaranteed by all of the Company's domestic significant subsidiaries. In accordance with the terms of the agreement governing the Global Credit Facility, the Company has the ability to expand its borrowing availability under the Global Credit Facility to


			25

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

$~~750 million~~,1 billion, subject to the agreement of one or more new or existing lenders under the facility to increase their commitments. There are no mandatory reductions in borrowing ability throughout the term of the Global Credit Facility. As

Under the Global Credit Facility as originally implemented, U.S. Dollar-denominated borrowings bear interest, at the Company's option, either at (a) a base rate, by reference to the greatest of: (i) the annual prime commercial lending rate of ~~December 30, 2017, there were~~ noJPMorgan Chase Bank, N.A. in effect from time to time, (ii) the weighted-average overnight Federal funds rate plus 50 basis points, or (iii) one-month LIBOR plus 100 basis points; or (b) LIBOR, adjusted for the Federal Reserve Board's Eurocurrency liabilities maximum reserve percentage, plus a spread of 75 basis points, subject to adjustment based on the Company's credit ratings ("Adjusted LIBOR"). Foreign currency-denominated borrowings bear interest at Adjusted LIBOR. In addition to paying interest on any outstanding borrowings under the Global Credit Facility, ~~and~~ the Company ~~was contingently liable for~~ ~~$9.3 million~~is required to pay a commitment fee to the lenders under the Global Credit Facility relating to the unutilized commitments. The commitment fee rate of ~~outstanding letters of credit.~~6.5 basis points is subject to adjustment based on the Company's credit ratings. These provisions were amended in May 2020, as discussed further below.



	22

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The Global Credit Facility contains a number of covenants that, among other things, restrict the Company's ability, subject to specified exceptions, to incur additional debt; incur liens; sell or dispose of assets; merge with or acquire other companies; liquidate or dissolve itself; engage in businesses that are not in a related line of business; make loans, advances, or guarantees; engage in transactions with affiliates; and make certain investments. ~~The~~As originally implemented, the Global Credit Facility also ~~requires~~required the Company to maintain a maximum ratio of Adjusted Debt to Consolidated EBITDAR (the "leverage ratio") of no greater than ~~3.75~~4.25 as of the date of measurement for the ~~four~~4 most recent consecutive fiscal quarters. Adjusted Debt is defined generally as consolidated debt outstanding, including finance lease obligations, plus ~~four times consolidated rent expense for the four most recent consecutive fiscal quarters.~~all operating lease obligations. Consolidated EBITDAR is defined generally as consolidated net income plus (i) income tax expense, (ii) net interest expense, (iii) depreciation and amortization expense, (iv) ~~consolidated rent expense,~~operating lease cost, (v) restructuring and other non-recurring expenses, and (vi) acquisition-related costs. This requirement was amended in May 2020, as discussed below.

In May 2020, the Company entered into an amendment of its Global Credit Facility (the "Amendment"). Under the Amendment, until the earlier of (a) the date on which the Company provides the periodic reporting information required under the Global Credit Facility for the quarter ending September 30, 2021 and (b) the date on which the Company certifies that its leverage ratio as of the last day of the two most recent fiscal quarters was no greater than 4.25 (the "Ratings-Based Toggle Date"), for loans based on Adjusted LIBOR, the spread over Adjusted LIBOR will be increased to 187.5 basis points, the spread on loans based on the base rate will be 87.5 basis points and the commitment fee will be increased to 25 basis points, in each case with no adjustments based on the Company's credit ratings. The pricing will return to the original levels set forth in the Global Credit Facility on the Ratings-Based Toggle Date. Additionally, the leverage ratio requirements have been waived until the quarter ending September 30, 2021. The maximum permitted leverage ratio for that fiscal quarter would be 5.25. For the fiscal quarters ending December 31, 2021 and March 31, 2022, the maximum permitted leverage ratio would be 4.75. For each fiscal quarter ending on or after June 30, 2022, the leverage ratio test would return to 4.25. The Amendment also (a) imposes a new requirement that would remain in effect until the Ratings-Based Toggle Date that the aggregate amount of unrestricted cash of the Company and its subsidiaries plus the undrawn amounts available under the Global Credit Facility may not be less than $750 million, (b) restricts the amount of dividends and distributions on, or purchases, redemptions, repurchases, retirements or acquisitions of, the Company's stock until the Specified Period Termination Date (as defined below), (c) until March 31, 2021, amends the material adverse change representation to disregard pandemic-related impacts to the business, and (d) until the Specified Period Termination Date, adds certain other restrictions on indebtedness incurred by the Company and its subsidiaries and investments and acquisitions by the Company and its subsidiaries. The "Specified Period Termination Date" is the earlier of (i) the date on which the Company provides the periodic reporting information required under the Global Credit Facility for the quarter ending June 30, 2022 and (ii) the date on which the Company certifies that its leverage ratio as of the last day of the two most recent fiscal quarters was no greater than 4.25.

Upon the occurrence of an Event of Default under the Global Credit Facility, the lenders may cease making loans, terminate the Global Credit Facility, and declare all amounts outstanding to be immediately due and payable. The Global Credit Facility specifies a number of events of default (many of which are subject to applicable grace periods), including, among others, the failure to make timely principal, interest, and fee payments or to satisfy the covenants, including the financial covenant described above. Additionally, the Global Credit Facility provides that an Event of Default will occur if Mr. Ralph Lauren, the Company's Executive Chairman and Chief Creative Officer, and entities controlled by the Lauren family fail to maintain a specified minimum percentage of the voting power of the Company's common stock. As of December ~~30, 2017~~, 26, 2020, no Event of Default (as such term is defined pursuant to the Global Credit Facility) has occurred under the Company's Global Credit Facility.


			26

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In March 2020, the Company borrowed $475.0 million under the Global Credit Facility. as a preemptive action to preserve cash and strengthen its liquidity position in response to the COVID-19 pandemic. These borrowings were subsequently repaid in June 2020 with proceeds from the issuances of the 1.700% Senior Notes and 2.950% Senior Notes. As of December 26, 2020, there were 0 borrowings outstanding under the Global Credit Facility and the Company was contingently liable for $9.1 million of outstanding letters of credit.

364 Day Facility

In May 2020, the Company entered into a new credit facility with the same lenders that are parties to the Global Credit Facility (the "364 Day Facility") as a preemptive measure to strengthen its liquidity in response to the COVID-19 pandemic. The 364 Day Facility provided for a $500 million senior unsecured revolving line of credit through May 25, 2021, provided that the maturity date may be earlier if the Company issues senior notes other than to refinance the previously outstanding 2.625% Senior Notes. In connection with the issuances of the 1.700% Senior Notes and 2.950% Senior Notes in June 2020, the 364 Day Facility automatically terminated in accordance with its terms because the aggregate proceeds received upon issuance of these senior notes exceeded the amount necessary to refinance the 2.625% Senior Notes.

Pan-Asia ~~Credit~~Borrowing Facilities

Certain of the Company's subsidiaries in Asia have uncommitted credit facilities with regional branches of JPMorgan Chase ~~(the "Banks")~~ in China and South Korea (the "Pan-Asia Credit Facilities"). ~~These credit facilities~~Additionally, the Company's Japan subsidiary has an uncommitted overdraft facility with Sumitomo Mitsui Banking Corporation (the "Japan Overdraft Facility"). The Pan-Asia Credit Facilities and Japan Overdraft Facility (collectively, the "Pan-Asia Borrowing Facilities") are subject to annual renewal and may be used to fund general working capital ~~and corporate~~ needs of the Company's operations in the respective countries. Borrowings under the Pan-Asia ~~Credit~~Borrowing Facilities are guaranteed by the parent company and are granted at the sole discretion of the ~~Banks,~~respective banks, subject to availability of the ~~Banks'~~banks' funds and satisfaction of certain regulatory requirements. The Pan-Asia ~~Credit~~Borrowing Facilities do not contain any financial covenants. ~~The~~A summary of the Company's Pan-Asia ~~Credit~~Borrowing Facilities by country ~~are~~is as follows:

•China Credit Facility — provides Ralph Lauren Trading (Shanghai) Co., Ltd. with a revolving line of credit of up to 50 million Chinese Renminbi (approximately ~~$7 million~~)$8 million) through April ~~5, 2018, and may~~3, 2021, which is also able to be used to support bank guarantees.

•South Korea Credit Facility — provides Ralph Lauren ~~(Korea)~~Korea Ltd. with a revolving line of credit of up to 4730 billion South Korean Won (approximately ~~$44~~$27 million) through October ~~31, 2018.~~

29, 2021.

•Japan Overdraft Facility — provides Ralph Lauren Corporation Japan with an overdraft amount of up to 5 billion Japanese Yen (approximately $48 million) though April 30, 2021.

As of December ~~30, 2017~~,26, 2020, there were no0 borrowings outstanding under the Pan-Asia ~~Credit~~Borrowing Facilities.

Refer to Note 1211 of the Fiscal ~~2017~~2020 10-K for additional discussion of the terms and conditions of the Company's debt and credit facilities.


~~11.~~	~~Fair Value Measurements~~

11. Fair Value Measurements

U.S. GAAP establishes a three-level valuation hierarchy for disclosure of fair value measurements. The determination of the applicable level within the hierarchy for a particular asset or liability depends on the inputs used in its valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally-derived (unobservable). A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

•Level 1 — inputs to the valuation methodology based on quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2 — inputs to the valuation methodology based on quoted prices for similar assets or liabilities in active markets for substantially the full term of the financial instrument; quoted prices for identical or similar instruments


			27

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

in markets that are not active for substantially the full term of the financial instrument; and model-derived valuations whose inputs or significant value drivers are observable.

•Level 3 — inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement.



	23

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The following table summarizes the Company's financial assets and liabilities that are measured and recorded at fair value on a recurring basis, excluding accrued interest components:

December 30,
2017 April 1,
2017
(millions)
Investments in commercial paper^(a)(b)
$ 154.4
$ —
Derivative assets^(a)
6.9
32.6
Derivative liabilities^(a)
84.3
21.7


	December 26, 2020		March 28, 2020
	(millions)
Investments in commercial paper(a)(b)	$	0	$	243.6
Derivative assets(a)	2.9		62.3
Derivative liabilities(a)	60.6		6.9


^(a) (a)Based on Level 2 measurements. (b)Amounts are included within short-term investments in the consolidated balance sheet.	~~Based on Level 2 measurements.~~


^(b)	~~$25.0 million included within cash and cash equivalents and $129.4 million included within short-term investments in the consolidated balance sheets.~~

The Company's investments in commercial paper are classified as available-for-sale and recorded at fair value in its consolidated balance sheets using external pricing data, based on interest rates and credit ratings for similar issuances with the same remaining term as the Company's investments. To the extent the Company invests in bonds, such investments are also classified as available-for-sale and recorded at fair value in its consolidated balance sheets based on quoted prices in active markets.

The Company's derivative financial instruments are recorded at fair value in its consolidated balance sheets and are valued using pricing models that are primarily based on market observable external inputs, including spot and forward currency exchange rates, benchmark interest rates, and discount rates consistent with the instrument's tenor, and consider the impact of the Company's own credit risk, if any. Changes in counterparty credit risk are also considered in the valuation of derivative financial instruments.

The Company's cash and cash equivalents, restricted cash, and time deposits are recorded at carrying value, which generally approximates fair value based on Level 1 measurements.

The Company's debt instruments are recorded at their carrying values in its consolidated balance sheets, which may differ from their respective fair values. The fair values of the Senior Notes are estimated based on external pricing data, including available quoted market prices, and with reference to comparable debt instruments with similar interest rates, credit ratings, and trading frequency, among other factors. The fair values of the Company's commercial paper notes and borrowings outstanding under its credit facilities, if any, are estimated using external pricing data, based on interest rates and credit ratings for similar issuances with the same remaining term as the Company's outstanding borrowings. Due to their short-term nature, the fair values of the Company's commercial paper notes and borrowings outstanding under its credit facilities, if any, generally approximate their carrying values.

The following table summarizes the carrying values and the estimated fair values of the Company's debt instruments:


	December 26, 2020				March 28, 2020
	Carrying Value(a)		Fair Value(b)		Carrying Value(a)		Fair Value(b)
	(millions)
$300 million 2.625% Senior Notes	$	0	$	0	$	299.6	$	299.8
$400 million 3.750% Senior Notes	396.9		452.1		396.4		415.1
$500 million 1.700% Senior Notes	498.0		509.3		0		0
$750 million 2.950% Senior Notes	737.0		812.3		0		0
Borrowings outstanding under credit facilities	0		0		475.0		473.0

December 30, 2017 April 1, 2017

Carrying Value^(a)

Fair Value^(b)

Carrying Value^(a)

Fair Value^(b)
(millions)
$300 million 2.125% Senior Notes $ 298.3
$ 300.2
$ 298.1
$ 302.2
$300 million 2.625% Senior Notes 290.3
302.2
290.1
302.8


			28

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a)See Note 10 for discussion of the carrying values of the Company's senior notes.


^(a) (b)Based on Level 2 measurements.	~~See Note 10 for discussion of the carrying values of the Company's Senior Notes.~~


^(b)	~~Based on Level 2 measurements.~~

Unrealized gains or losses resulting from changes in the fair value of the Company's debt instruments do not result in the realization or expenditure of cash, unless the debt is retired prior to its maturity.



	24

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

Non-financial Assets and Liabilities

The Company's non-financial assets, which primarily consist of goodwill, other intangible assets, ~~and~~ property and equipment, and lease-related right-of-use ("ROU") assets, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying ~~value.~~value in its consolidated balance sheet. However, on a periodic basis or whenever events or changes in circumstances indicate that ~~their carrying value~~they may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), the respective carrying value of non-financial ~~instruments~~assets are assessed for impairment and, if ~~applicable,~~ultimately considered impaired, are adjusted and written down to ~~and recorded at~~their fair value, ~~considering~~as estimated based on consideration of external market participant assumptions.

During the three-month and nine-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016,~~28, 2019, the Company recorded non-cash impairment charges ~~of $24.8 million and $56.7 million, respectively,~~ to ~~fully write off~~reduce the carrying values of certain long-lived assets ~~based upon~~to their ~~assumed~~estimated fair ~~values of zero.~~values. The fair values of these assets were determined based on Level 3 ~~measurements. Inputs to these fair value~~ measurements, the related inputs of which included estimates of the amount and timing of the assets' net future discounted cash flows (including any potential sublease income for lease-related ROU assets), based on historical experience and consideration of current trends, market conditions, and ~~market conditions. See Note 7 for further discussion of the~~comparable sales, as applicable.

The following tables summarize non-cash impairment charges recorded by the Company during the fiscal periods presented in order to reduce the carrying values of certain long-lived assets to their estimated fair values as of the assessment date:


	Three Months Ended
	December 26, 2020				December 28, 2019
Long-Lived Asset Category	Fair Value as of Impairment Date		Total Impairments		Fair Value as of Impairment Date		Total Impairments
	(millions)
Property and equipment, net	$	0	$	2.2	$	0	$	11.0
Operating lease right-of-use assets	0		0.4		13.2		3.4


	Nine Months Ended
	December 26, 2020				December 28, 2019
Long-Lived Asset Category	Fair Value as of Impairment Date		Total Impairments		Fair Value as of Impairment Date		Total Impairments
	(millions)
Property and equipment, net	$	0	$	13.0	$	0	$	13.6
Operating lease right-of-use assets(a)	33.9		22.7		109.6		233.2

(a)Total impairment charges for the nine months ended December 28, 2019 includes $225.1 million recorded in connection with the Company's adoption of ASU No. 2016-02, "Leases" as of the beginning of Fiscal 2020 which, net of related income tax benefits, reduced its opening retained earnings balance by $169.4 million.

See Note 7 for additional discussion regarding non-cash impairment charges recorded by the Company within the consolidated statements of operations during the fiscal periods presented.


			29

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NaN impairment charges associated with goodwill ~~impairment charges~~or other intangible assets were recorded during either of the nine-month periods ended December ~~30, 2017~~26, 2020 or December ~~31, 2016.~~28, 2019. The Company performed its annual goodwill impairment assessment using a qualitative approach as of the beginning of the second quarter of Fiscal ~~2018.~~2021. In performing the assessment, the Company identified and considered the significance of relevant key factors, events, and circumstances that affected the fair values and/or carrying amounts of its reporting units with allocated goodwill. These factors included external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as the Company's actual and expected financial performance. Additionally, the Company also considered the results of ~~the Company's~~its most recent quantitative goodwill impairment test, which was performed as of the end of Fiscal 2020 and incorporated assumptions related to COVID-19 business disruptions, the results of which indicated that the fair values of these reporting units significantly exceeded their respective carrying values. Based on the results of its qualitative goodwill impairment assessment, the Company concluded that it is not more likely than not that the fair values of its reporting units are less than their respective carrying values and there were no reporting units at risk of impairment.


~~12.~~	~~Financial Instruments~~

12. Financial Instruments

Derivative Financial Instruments

The Company is exposed to changes in foreign currency exchange rates, primarily relating to certain anticipated cash flows and the value of the reported net assets of its international operations, as well as changes in the fair value of its fixed-rate debt obligations attributed to changes in ~~the~~a benchmark interest rate. ~~Consequently,~~Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not ~~enter into derivative transactions~~use derivatives for speculative or trading purposes.

The following table summarizes the Company's outstanding derivative instruments ~~on a gross basis as~~ recorded inon its consolidated balance sheets as of December ~~30, 2017~~26, 2020 and ~~April 1, 2017~~:March 28, 2020:


	Notional Amounts				Derivative Assets						Derivative Liabilities
Derivative Instrument(a)	December 26, 2020		March 28, 2020		December 26, 2020			March 28, 2020			December 26, 2020			March 28, 2020
					Balance Sheet Line(b)	Fair Value		Balance Sheet Line(b)	Fair Value		Balance Sheet Line(b)	Fair Value		Balance Sheet Line(b)	Fair Value
	(millions)
Designated Hedges:
FC — Cash flow hedges	$	50.1	$	229.0	PP	$	0.1	PP	$	7.4	AE	$	2.4	AE	$	0.4
IRS — Fixed-rate debt	0		300.0			0			0			0		AE	0.2
Net investment hedges(c)	747.7		683.6		ONCA	2.7		ONCA	48.6		ONCL	57.3		AE	4.0
Total Designated Hedges	797.8		1,212.6			2.8			56.0			59.7			4.6
Undesignated Hedges:
FC — Undesignated hedges(d)	244.1		473.5		PP	0.1		PP	6.3		AE	0.9		AE	2.3
Total Hedges	$	1,041.9	$	1,686.1		$	2.9		$	62.3		$	60.6		$	6.9

Notional Amounts Derivative Assets Derivative Liabilities
Derivative Instrument^(a)
December 30,
2017 April 1,
2017 December 30,
2017 April 1,
2017 December 30,
2017 April 1,
2017

Balance
Sheet
Line^(b)

Fair
Value

Balance
Sheet
Line^(b)

Fair
Value

Balance
Sheet
Line^(b)

Fair
Value

Balance
Sheet
Line^(b)

Fair
Value
(millions)
Designated Hedges:
FC — Cash flow hedges $ 509.2
$ 533.2

^(d)
$ 3.0
PP $ 17.7

^(e)
$ 8.5
AE $ 3.7
IRS — Fixed-rate debt 600.0
600.0
—
—

^(f)
9.8
ONCL 9.4
CCS — NI 658.4
591.2
—
ONCA 9.6

^(g)
65.2
—
Total Designated Hedges 1,767.6
1,724.4
3.0
27.3
83.5
13.1
Undesignated Hedges:
FC — Undesignated hedges^(c)
455.8
375.1
PP 3.9
PP 5.3
AE 0.8
AE 8.6
Total Hedges $ 2,223.4
$ 2,099.5
$ 6.9
$ 32.6
$ 84.3
$ 21.7

(a)FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts.

(b)PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities.

(c)Includes cross-currency swaps designated as hedges of the Company's net investment in certain foreign operations.

(d)Relates to third-party and intercompany foreign currency-denominated exposures and balances.



			2530

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


^(a)	~~FC = Forward foreign currency exchange contracts; IRS = Interest rate swap contracts; CCS = Cross-currency swap contracts; NI = Net investment hedges.~~


^(b)	~~PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities.~~


^(c)	~~Primarily includes undesignated hedges of foreign currency-denominated intercompany loans and other intercompany balances.~~


^(d)	~~$2.8 million included within prepaid expenses and other current assets and $0.2 million included within other non-current assets.~~


^(e)	~~$8.2 million included within accrued expenses and other current liabilities and $0.3 million included within other non-current liabilities.~~


^(f)	~~$1.4 million included within accrued expenses and other current liabilities and $8.4 million included within other non-current liabilities.~~


^(g)	~~$36.1 million included within accrued expenses and other current liabilities and $29.1 million included within other non-current liabilities.~~

The Company ~~records and~~ presents the fair values ~~of all~~ of its derivative assets and liabilities inrecorded on its consolidated balance sheets on a gross basis, even when they are subject to master netting arrangements. However, if the Company were to offset and record the asset and liability balances of all of its derivative instruments on a net basis in accordance with the terms of each of its master netting arrangements, spread across ~~eight~~10 separate counterparties, the amounts presented in the consolidated balance sheets as of December ~~30, 2017~~26, 2020 and ~~April 1, 2017~~March 28, 2020 would be adjusted from the current gross presentation as detailed in the following table:


	December 26, 2020						March 28, 2020
	Gross Amounts Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements		Net Amount		Gross Amounts Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements		Net Amount
	(millions)
Derivative assets	$	2.9	$	(0.5)	$	2.4	$	62.3	$	(6.1)	$	56.2
Derivative liabilities	60.6		(0.5)		60.1		6.9		(6.1)		0.8

December 30, 2017 April 1, 2017
Gross Amounts Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements
Net
Amount
Gross Amounts Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements
Net
Amount
(millions)
Derivative assets $ 6.9
$ (3.1 ) $ 3.8
$ 32.6
$ (18.3 ) $ 14.3
Derivative liabilities 84.3
(3.1 ) 81.2
21.7
(18.3 ) 3.4

The Company's master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. See Note 3 for further discussion of the Company's master netting arrangements.

The following tables summarize the pretax impact ~~of the effective portion~~ of gains and losses from the Company's designated derivative instruments on its consolidated financial statements for the three-month and nine-month periods endedDecember ~~30, 2017~~26, 2020 and December ~~31, 2016~~:28, 2019:


	Gains (Losses) Recognized in OCI
	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Designated Hedges:
FC — Cash flow hedges	$	(2.4)	$	(2.4)	$	(9.0)	$	13.2
Net investment hedges — effective portion	(35.7)		(14.7)		(60.0)		2.4
Net investment hedges — portion excluded from assessment of hedge effectiveness	(14.7)		2.1		(36.0)		7.3
Total Designated Hedges	$	(52.8)	$	(15.0)	$	(105.0)	$	22.9

Gains (Losses)
Recognized in OCI

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Designated Hedges:
FC — Cash flow hedges $ (2.9 ) $ 58.2
$ (28.8 ) $ 46.7

CCS — NI^(a)
(10.4 ) 38.1
(73.1 ) 45.2

Total Designated Hedges $ (13.3 ) $ 96.3
$ (101.9 ) $ 91.9


	Location and Amount of Gains (Losses) from Cash Flow Hedges Reclassified from AOCI to Earnings
	Three Months Ended								Nine Months Ended
	December 26, 2020				December 28, 2019				December 26, 2020				December 28, 2019
	Cost of goods sold		Other income (expense), net		Cost of goods sold		Other income (expense), net		Cost of goods sold		Other income (expense), net		Cost of goods sold		Other income (expense), net
	(millions)
Total amounts presented in the consolidated statements of operations in which the effects of related cash flow hedges are recorded	$	(502.4)	$	1.6	$	(661.6)	$	2.9	$	(1,035.3)	$	5.5	$	(1,826.8)	$	(2.9)
Effects of cash flow hedging:
FC — Cash flow hedges	5.2		0		7.1		(0.1)		11.7		(0.3)		17.7		0.3



			2631

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Gains (Losses) Reclassified
from AOCI to Earnings

Location of Gains (Losses)
Reclassified from
AOCI to Earnings
Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Designated Hedges:
FC — Cash flow hedges $ (5.9 ) $ (2.7 ) $ (4.3 ) $ (4.2 ) Cost of goods sold
FC — Cash flow hedges 0.6
9.3
(0.4 ) 3.3
Foreign currency gains (losses)
Total Designated Hedges $ (5.3 ) $ 6.6
$ (4.7 ) $ (0.9 )


	Gains (Losses) from Net Investment Hedges Recognized in Earnings								Location of Gains (Losses) Recognized in Earnings
	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Net Investment Hedges
Net investment hedges — portion excluded from assessment of hedge effectiveness(a)	$	2.9	$	4.7	$	8.5	$	14.5	Interest expense
Total Net Investment Hedges	$	2.9	$	4.7	$	8.5	$	14.5


^(a) (a)Amounts recognized in other comprehensive income (loss) ("OCI") relating to the effective portion of the Company's net investment hedges would be recognized in earnings only upon the sale or liquidation of the hedged net investment.	~~Amounts recognized in other comprehensive income (loss) ("OCI") would be recognized in earnings only upon the sale or liquidation of the hedged net investment.~~

As of December ~~30, 2017,~~26, 2020, it is ~~expected~~estimated that ~~$8.0~~$0.3 million of pretax net ~~losses~~gains on both outstanding and matured derivative instruments designated and qualifying as cash flow hedges deferred in AOCI will be recognized in earnings over the next twelve months. ~~The amounts~~Amounts ultimately recognized in earnings will depend on exchange rates in effect when outstanding derivative instruments are settled. ~~No material gains or losses relating to ineffective cash flow hedges were recognized during any of the fiscal periods presented.~~

The following table summarizes the pretax impact of gains and losses from the Company's undesignated derivative instruments on its consolidated financial statements for the three-month and nine-month periods endedDecember ~~30, 2017~~26, 2020 and December ~~31, 2016~~:28, 2019:


	Gains (Losses) Recognized in Earnings									Location of Gains (Losses) Recognized in Earnings		Gains (Losses) Recognized in Earnings								Location of Gains (Losses) Recognized in Earnings
	Three Months Ended					Nine Months Ended						Three Months Ended				Nine Months Ended
	December 30, 2017			December 31, 2016		December 30, 2017		December 31, 2016				December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)											(millions)
Undesignated Hedges:											Undesignated Hedges:
FC — Undesignated hedges	$	(1.9	)	$	14.2	$	0.2	$	2.9	Foreign currency gains (losses)	FC — Undesignated hedges	$	(4.2)	$	(2.7)	$	(0.3)	$	2.4	Other income (expense), net
Total Undesignated Hedges	$	(1.9	)	$	14.2	$	0.2	$	2.9		Total Undesignated Hedges	$	(4.2)	$	(2.7)	$	(0.3)	$	2.4

Risk Management Strategies

Forward Foreign Currency Exchange Contracts

The Company uses forward foreign currency exchange contracts to ~~reduce~~mitigate its risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency, ~~intercompany royalty payments made by certain of its international operations, and~~ the settlement of foreign currency-denominated ~~balances.~~balances, and the translation of certain foreign operations' net assets into U.S. dollars. As part of its overall strategy ~~to manage~~for managing the level of exposure to ~~the risk of foreign currency~~such exchange rate ~~fluctuations,~~risk, relating primarily to ~~changes in the value of~~ the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, the Swiss Franc, ~~the Swedish Krona,~~and the Chinese ~~Yuan,~~Renminbi, the ~~New Taiwan Dollar, and the Hong Kong Dollar, the~~ Company generally hedges a portion of its ~~foreign currency~~related exposures anticipated over a ~~two-year period. In doing so,~~ the ~~Company uses~~next twelve months using forward foreign currency exchange contracts ~~that generally have~~with maturities of two months to ~~two years~~one year to provide continuing coverage ~~throughout~~over the ~~hedging~~ period of the respective exposure.

Interest Rate Swap Contracts

~~During Fiscal 2016, the~~The Company ~~entered into two~~periodically designates pay-floating rate, receive-fixed rate interest rate swap contracts ~~which it designated~~ as hedges against changes in the ~~respective~~ fair ~~values~~value of its fixed-rate ~~2.125% Senior Notes and its~~debt attributed to changes in a benchmark interest rate. To the extent of their notional amount, such contracts effectively swap the fixed interest rate on certain of the Company's fixed-rate ~~2.625% Senior Notes~~senior notes for a variable interest rate based on the 3-month LIBOR plus a fixed spread. Changes in the fair value of the Company's interest rate swap contracts were offset by changes in the fair value of the corresponding senior notes attributed to changes in the benchmark interest rate, (the "Interest Rate Swaps"). The Interest Rate Swaps, which mature on September 26, 2018 and August 18, 2020, respectively, both have notional amounts of $300 million and swap the fixed interest rates on the Company's 2.125% Senior Notes and 2.625% Senior Notes for variable interest rates based on the 3-month London Interbank Offered Rate ("LIBOR") plus a fixed spread. Changeswith 0 resulting net impact reflected in ~~the fair values~~earnings during any of the ~~Interest Rate Swaps were offset~~

fiscal periods presented. The following table



			2732

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~by changes in~~summarizes the ~~fair values~~carrying value of the ~~2.125% Senior Notes~~hedged senior notes and the impacts of the related fair value hedging adjustments as of December 26, 2020 and March 28, 2020:

Carrying Value of
the Hedged Item

Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Item

Hedged Item

Balance Sheet Line in which the Hedged Item is Included

December 26,
2020

March 28,
2020

December 26,
2020

March 28,
2020

(millions)

$300 million 2.625% Senior Notes(a)

Current portion of long-term debt

N/A

299.6

N/A

(0.2)

(a)The interest rate swap contract designated as a fair value hedge of the Company's 2.625% Senior Notes ~~attributed to changes in~~was settled during the ~~benchmark interest rate, with no resulting ineffectiveness recognized in earnings during any~~nine months ended December 26, 2020 at a loss of ~~the fiscal periods presented.~~$0.3 million.

Cross-Currency Swap Contracts

~~During Fiscal 2016, the~~The Company ~~entered into two~~periodically designates (i) pay-floating rate, receive-floating rate cross-currency swap contracts ~~with notional amounts of €280 million and €274 million, which it designated~~or (ii) pay-fixed rate, receive fixed-rate cross-currency swap contracts as hedges of its net investment in certain of its European ~~subsidiaries (the "Cross-Currency Swaps").~~ subsidiaries.

The ~~Cross-Currency Swaps, which mature on September 26, 2018 and August 18, 2020, respectively,~~Company's pay-floating rate, receive-floating rate cross-currency swap ~~the~~contracts swap U.S. Dollar-denominated variable interest rate payments based on the contract's notional amount and 3-month LIBOR plus a fixed spread (as paid under ~~the Interest Rate Swaps described~~a corresponding interest rate swap contract discussed above) for Euro-denominated variable interest rate payments based on ~~the~~ 3-month Euro Interbank Offered Rate ("EURIBOR") plus a fixed ~~spread. As a result, the Cross-Currency Swaps,~~spread, which, in ~~conjunction~~combination with the ~~Interest Rate Swaps,~~corresponding interest rate swap contract, economically ~~convert~~converts a portion of the Company's ~~$300 million~~ fixed-rate ~~2.125% and $300 million fixed-rate 2.625%~~US-denominated senior note obligations to ~~€280 million and €274 million~~ floating-rate Euro-denominated ~~liabilities, respectively. No material gains or losses related to~~obligations.

The Company's pay-fixed rate, receive-fixed rate cross-currency swap contracts swap U.S. Dollar-denominated fixed interest rate payments based on the ~~ineffective portion, or~~contract's notional amount and the ~~amount excluded from effectiveness testing, were recognized in~~fixed rate of interest ~~expense within the consolidated statements of operations during any~~payable on certain of the ~~fiscal periods presented.~~Company's senior notes for Euro-denominated fixed interest rate payments, thereby economically converting a portion of its fixed-rate US-denominated senior note obligations to fixed rate Euro-denominated obligations.

See Note 3 for further discussion of the Company's accounting policies relating to its derivative financial instruments.

Investments

As of December ~~30, 2017,~~26, 2020, the Company's investments were all classified as short-term ~~investments~~and consisted of ~~$732.9~~$165.7 million of time deposits. The Company's investments as of March 28, 2020 were also all classified as short-term and consisted of $252.3 million of time deposits and ~~$129.4~~$243.6 million of commercial paper, and its non-current investments consisted of $83.3 million of time deposits. As of April 1, 2017, the Company held short-term investments of $684.7 million and non-current investments of $21.4 million, both consisting of time deposits.paper.

No significant realized or unrealized gains or losses on available-for-sale investments or ~~other-than-temporary~~ impairment charges were recorded during any of the fiscal periods presented.

Refer to Note 3 of the Fiscal ~~2017~~2020 10-K for further discussion of the Company's accounting policies relating to its investments.


~~13.~~	13. Commitments and Contingencies

~~U.S. Tax Reform~~

In connection with the TCJA's provision that subjects previously deferred foreign earnings to a one-time mandatory transition tax (as described in Note 9), the Company recorded a charge of $215.5 million within its income tax provision during the third quarter of Fiscal 2018, together with a corresponding current and non-current income tax payable obligation within its consolidated balance sheets based upon the estimated timing of payments. This obligation, which was recorded on a provisional basis and is subject to change, is expected to be paid over an eight-year period as follows:

Mandatory Transition
Tax Payments^(a)
(millions)
Fiscal 2019 $ 27.3
Fiscal 2020 14.0
Fiscal 2021 14.0
Fiscal 2022 14.0
Fiscal 2023 23.2
Fiscal 2024 and thereafter 85.5
Total mandatory transition tax payments $ 178.0



	28

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~


^(a)	The expected mandatory transition tax payments have been presented net of previously available foreign tax credit carryovers of $37.5 million, which the Company expects to utilize to partially reduce this tax obligation.

~~See Note 9 for further discussion of the TCJA and its enactment-related impacts on the Company's consolidated financial statements.~~

~~Customs Audit~~

In September 2014, one of the Company's international subsidiaries received a pre-assessment notice from the relevant customs officials concerning the method used to determine the dutiable value of imported inventory. The notice communicated the customs officials' assertion that the Company should have applied an alternative duty method, which could result in up to $46 million in incremental duty and non-creditable value-added tax, including $11 million in interest and penalties. The Company believes that the alternative duty method claimed by the customs officials is not applicable to the Company's facts and circumstances and is vigorously contesting their asserted methodology.

In October 2014, the Company filed an appeal of the pre-assessment notice in accordance with the standard procedures established by the relevant customs authorities. In response to the filing of the Company's appeal of the pre-assessment notice, the review committee instructed the customs officials to reconsider their assertion of the alternative duty method and conduct a re-audit to evaluate the facts and circumstances noted in the pre-assessment notice. In December 2015, the Company received the results of the re-audit conducted and a customs audit assessment notice in the amount of $34.1 million, which the Company recorded within restructuring and other charges in its consolidated statements of operations during the third quarter of Fiscal 2016. Although the Company disagrees with the assessment notice, in order to secure the Company's rights, the Company was required to pay the assessment amount and then subsequently file an appeal with the customs authorities. In October 2017, the tax tribunal presiding over the Company's appeal instructed the customs officials to reconsider their assertions under the alternative duty method and conduct a second re-audit to evaluate the facts and circumstances noted in the pre-assessment notice.

The Company continues to maintain its original filing position and will vigorously contest any other proposed methodology asserted by the customs officials. Should the Company be successful in its merits, a full refund for the amounts paid plus interest will be required to be paid by the customs authorities. If the Company is unsuccessful in its current appeal with the customs authorities, it may further appeal this decision within the courts. At this time, while the Company believes that the customs officials' claims are not meritorious and that the Company should prevail, the outcome of the appeals process is subject to risk and uncertainty.

~~Other Matters~~

The Company is involved, from time to time, in litigation, other legal claims, and proceedings involving matters associated with or incidental to its business, including, among other things, matters involving credit card fraud, trademark and other intellectual property, licensing, importation and exportation of its products, taxation, unclaimed property, and employee relations. The Company believes at present that the resolution of currently pending matters will not individually or in the aggregate have a material adverse effect on its consolidated financial statements. However, the Company's assessment of any current litigation or other legal claims could potentially change in light of the discovery of facts not presently known or


			33

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

determinations by judges, juries, or other finders of fact which are not in accord with management's evaluation of the possible liability or outcome of such litigation or claims.

In the normal course of business, the Company enters into agreements that provide general indemnifications. The Company has not made any significant indemnification payments under such agreements in the past and does not currently anticipate incurring any material indemnification payments.



	29

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~


14.	~~Equity~~

~~Summary of Changes in~~ Equity

Class B Common Stock Conversion

During the nine months ended December 28, 2019, the Lauren Family, L.L.C., a limited liability company managed by the children of Mr. Ralph Lauren, converted 1.0 million shares of Class B common stock into an equal number of shares of Class A ~~reconciliation~~common stock pursuant to the terms of the ~~beginning~~security. These conversions occurred in advance of a sales plan providing for the sale of such shares of Class A common stock pursuant to Rule 10b5-1 subject to the conditions set forth therein. These transactions resulted in a reclassification within equity and ~~ending amounts of equity is presented below:~~

Nine Months Ended
December 30,
2017 December 31,
2016
(millions)
Balance at beginning of period $ 3,299.6
$ 3,743.5
Comprehensive income 189.3
63.2
Dividends declared (121.9 ) (123.2 )
Repurchases of common stock, including shares surrendered for tax withholdings (15.9 ) (115.0 )
Stock-based compensation 56.3
46.4
Shares issued and tax benefits (shortfalls) recognized pursuant to stock-based compensation arrangements 0.1
(4.3 )
Balance at end of period $ 3,407.5
$ 3,610.6
had no effect on the Company's consolidated balance sheet.

Common Stock Repurchase Program

In June 2016, as part of its common stock repurchase program, the Company entered into an accelerated share repurchase program with a third-party financial institution under which it made an upfront payment of $100 million in exchange for an initial delivery of 0.9 million shares of its Class A common stock, representing 90% of the total shares that were ultimately expected to be delivered over the program's term (the "ASR Program"). The initial shares received, which had an aggregate cost of $90 million based on the June 20, 2016 closing share price, were immediately retired and recorded as an increase to treasury stock.

In September 2016, at the ASR Program's conclusion, the Company received 0.1 million additional shares and accordingly recorded a related $10 million increase to treasury stock. The number of additional shares delivered was based on the volume-weighted average price per share of the Company's Class A common stock over the term of the ASR Program, less an agreed upon discount. The average price per share paid for all of the shares delivered under the ASR Program was $98.48.

A summary of the Company's repurchases of Class A common stock under its common stock repurchase program ~~including the ASR Program,~~ is as follows:


	Nine Months Ended
	December 26, 2020		December 28, 2019
	(millions)
Cost of shares repurchased	$	0	$	498.3
Number of shares repurchased	0		4.9

Nine Months Ended
December 30,
2017 December 31,
2016
(millions)
Cost of shares repurchased $ —
$ 100.0
Number of shares repurchased —
1.0

On May 13, 2019, the Company's Board of Directors approved an expansion of the Company's existing common stock repurchase program that allowed it to repurchase up to an additional $600 million of Class A common stock. As of December ~~30, 2017,~~26, 2020, the remaining availability under the Company's Class A common stock repurchase program was approximately ~~$100~~$580 million. Repurchases of shares of Class A common stock are subject to certain restrictions under the Company's Global Credit Facility and more generally overall business and market conditions. Accordingly, as a result of current business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal 2021 the Company temporarily suspended its common stock repurchase program as a preemptive action to preserve cash and strengthen its liquidity position.

In addition, during ~~each of~~ the nine-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016,~~ ~~0.2~~28, 2019, 0.5 million and 0.4 million shares of Class A common stock, respectively, at a cost of ~~$15.9~~$36.1 million and ~~$15.0~~$43.8 million,, respectively, were surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards under the Company's ~~1997 Long-Term Stock Incentive Plan, as amended (the "1997 Incentive Plan"), and its Amended and Restated 2010 Long-Term Stock Incentive Plan (the "2010 Incentive Plan").~~long-term stock incentive plans.

Repurchased and surrendered shares are accounted for as treasury stock at cost and held in treasury for future use.



	30

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

Dividends

~~Since 2003,~~Except as discussed below, the Company has maintained a regular quarterly cash dividend program on its common ~~stock. The third~~stock since 2003. On May 13, 2019, the Company's Board of Directors approved an increase to the Company's quarterly cash dividend on its common stock from $0.625 to $0.6875 per share.

As a result of current business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal ~~2018~~2021 the Company temporarily suspended its quarterly cash dividend of ~~$0.50~~ ~~per share was declared on December 14, 2017, was payable~~program as a preemptive action to ~~stockholders of record~~preserve cash and strengthen its liquidity position. Any decision to declare and pay dividends in the future will be made at the ~~close~~discretion of ~~business~~the Company's Board of Directors and will depend on ~~December 29, 2017,~~the Company's results of operations, cash requirements, financial condition, and ~~was paid on January 12, 2018. Dividends paid amounted to $121.7 million~~other factors that the Board of Directors may deem relevant, including economic and ~~$123.7 million during the nine-month periods ended December 30, 2017 and December 31, 2016, respectively.~~market conditions.


~~15.~~			~~Accumulated Other Comprehensive Income (Loss)~~34

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Accumulated Other Comprehensive Income (Loss)

The following table presents OCI activity, net of tax, accumulated in equity:

Foreign Currency Translation Gains (Losses)^(a)

Net Unrealized Gains (Losses) on Cash Flow Hedges^(b)

Net Unrealized Gains (Losses) on Defined
Benefit Plans^(c)
Total Accumulated Other Comprehensive Income (Loss)
(millions)
Balance at April 2, 2016 $ (157.6 ) $ (12.0 ) $ (11.9 ) $ (181.5 )
Other comprehensive income (loss), net of tax:
OCI before reclassifications (86.7 ) 42.1
1.0
(43.6 )
Amounts reclassified from AOCI to earnings —
1.1
1.0
2.1
Other comprehensive income (loss), net of tax (86.7 ) 43.2
2.0
(41.5 )
Balance at December 31, 2016 $ (244.3 ) $ 31.2
$ (9.9 ) $ (223.0 )

Balance at April 1, 2017 $ (206.2 ) $ 14.6
$ (6.8 ) $ (198.4 )
Other comprehensive income (loss), net of tax:
OCI before reclassifications 90.7
(26.4 ) (1.0 ) 63.3
Amounts reclassified from AOCI to earnings —
4.4
0.1
4.5
Other comprehensive income (loss), net of tax 90.7
(22.0 ) (0.9 ) 67.8
Balance at December 30, 2017 $ (115.5 ) $ (7.4 ) $ (7.7 ) $ (130.6 )


	Foreign Currency Translation Gains (Losses)(a)		Net Unrealized Gains (Losses) on Cash Flow Hedges(b)		Net Unrealized Gains (Losses) on Defined Benefit Plans(c)		Total Accumulated Other Comprehensive Income (Loss)
	(millions)
Balance at March 28, 2020	$	(130.4)	$	18.0	$	(5.8)	$	(118.2)
Other comprehensive income (loss), net of tax:
OCI before reclassifications	46.0		(7.8)		(0.5)		37.7
Amounts reclassified from AOCI to earnings	0		(10.0)		(0.1)		(10.1)
Other comprehensive income (loss), net of tax	46.0		(17.8)		(0.6)		27.6
Balance at December 26, 2020	$	(84.4)	$	0.2	$	(6.4)	$	(90.6)

Balance at March 30, 2019	$	(118.5)	$	20.2	$	(5.1)	$	(103.4)
Other comprehensive income (loss), net of tax:
OCI before reclassifications	(5.5)		11.5		0		6.0
Amounts reclassified from AOCI to earnings	(4.9)		(16.2)		(0.1)		(21.2)
Other comprehensive income (loss), net of tax	(10.4)		(4.7)		(0.1)		(15.2)
Balance at December 28, 2019	$	(128.9)	$	15.5	$	(5.2)	$	(118.6)

^(a)

OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes an income tax benefit of $23.4 million for the nine months ended December 30, 2017, and is presented net of an income tax provision of $19.1 million for the nine months ended December 31, 2016. OCI before reclassifications to earnings for the nine-month periods ended December 30, 2017 and December 31, 2016 include a loss of $45.5 million (net of a $27.6 million income tax benefit) and a gain of $27.8 million (net of a $17.4 million income tax provision), respectively, related to the effective portion of changes in the fair values of the Cross-Currency Swaps designated as hedges of the Company's net investment in certain of its European subsidiaries (see Note 12).


^(b)	OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges are presented net of an income tax benefit of $2.4 million and an income tax provision of $4.6 million for the nine-month periods ended December 30, 2017 and December 31, 2016, respectively. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below.


^(c)	~~Activity is presented net of taxes, which were immaterial for both periods presented.~~



			31

(a)OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes an income tax benefit of $22.7 million and an income tax provision of $1.8 million for the nine-month periods ended December 26, 2020 and December 28, 2019, respectively. OCI before reclassifications to earnings for the nine-month periods ended December 26, 2020 and December 28, 2019 include a loss of $72.7 million (net of a $23.3 million income tax benefit) and a gain of $7.4 million (net of a $2.3 million income tax provision), respectively, related to changes in the fair values of instruments designated as hedges of the Company's net investment in certain foreign operations (see Note 12). Amounts reclassified from AOCI to earnings related to foreign currency translation gains (losses) for the nine months ended December 28, 2019 relate to the reclassification to retained earnings of income tax effects stranded in AOCI.

~~RALPH LAUREN CORPORATION~~(b)OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges are presented net of an income tax benefit of $1.2 million and an income tax provision of $1.7 million for the nine-month periods ended December 26, 2020 and December 28, 2019, respectively. The tax effects on amounts reclassified from AOCI to earnings are presented in a table below.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

(c)Activity is presented net of taxes, which were immaterial for both periods presented.

The following table presents reclassifications from AOCI to earnings for cash flow hedges, by component:


	Three Months Ended						Nine Months Ended						Location of Gains (Losses) Reclassified from AOCI to Earnings		Three Months Ended				Nine Months Ended				Location of Gains (Losses) Reclassified from AOCI to Earnings
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016					December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)														(millions)
Gains (losses) on cash flow hedges^(a):														Gains (losses) on cash flow hedges(a):
FC — Cash flow hedges	$	(5.9	)	$	(2.7	)	$	(4.3	)	$	(4.2	)	Cost of goods sold	FC — Cash flow hedges	$	5.2	$	7.1	$	11.7	$	17.7	Cost of goods sold
FC — Cash flow hedges	0.6			9.3			(0.4		)	3.3			Foreign currency gains (losses)	FC — Cash flow hedges	0		(0.1)		(0.3)		0.3		Other income (expense), net
Tax effect	0.5			(1.4		)	0.3			(0.2		)	Income tax benefit (provision)	Tax effect	(0.7)		(0.7)		(1.4)		(1.8)		Income tax benefit (provision)
Net of tax	$	(4.8	)	$	5.2		$	(4.4	)	$	(1.1	)		Net of tax	$	4.5	$	6.3	$	10.0	$	16.2

(a)FC = Forward foreign currency exchange contracts.


^(a)			~~FC = Forward foreign currency exchange contracts.~~

35
~~16.~~	~~Stock-based Compensation~~

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Stock-based Compensation

The Company's stock-based compensation awards are currently issued under the ~~2010~~2019 Incentive Plan, which was approved by its stockholders on August ~~5, 2010.~~1, 2019. However, any prior awards granted under either the Company's 2010 Incentive Plan or 1997 Incentive Plan remain subject to the terms of ~~that plan.~~those plans as applicable. Any awards that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes are available for issuance under the ~~2010~~2019 Incentive Plan.

Refer to Note 18 of the Fiscal ~~2017~~2020 10-K for a detailed description of the Company's stock-based compensation awards, including information related to vesting terms, service, performance, and ~~performance~~market conditions and payout percentages.

Impact on Results

A summary of total stock-based compensation expense and the related income tax benefits recognized during the three-month and nine-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016~~28, 2019 is as follows:

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Compensation expense $ 16.9
^(a)
$ 14.5
$ 56.3
^(a)
$ 46.4
Income tax benefit (6.3 ) (5.3 ) (20.9 ) (17.0 )


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Compensation expense	$	19.8	$	22.1	$	54.4	$	72.9	(a)
Income tax benefit	(3.2)		(3.4)		(9.9)		(11.1)


^(a) (a)Includes $3.6 million of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations during the second quarter of Fiscal 2020 (see Note 8). All other stock-based compensation expense was recorded within SG&A expenses.	The three-month and nine-month periods ended December 30, 2017 include $0.7 million and $2.8 million, respectively, of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations (see Note 8). All other stock-based compensation expense was recorded within SG&A expenses.

The Company issues its annual grants of stock-based compensation awards in the first half of each fiscal year. Due to the timing of the annual grants and other factors, including the timing and magnitude of forfeiture and performance goal achievement adjustments, as well as changes to the size and composition of the eligible employee population, stock-based compensation expense recognized during any given fiscal period is not indicative of the level of compensation expense expected to be incurred in future periods.



	32

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~Stock Options~~

~~A summary of stock option activity under all plans during the~~ ~~nine months endedDecember 30, 2017~~ ~~is as follows:~~



	~~Number of Options~~
	~~(thousands)~~
~~Options outstanding at April 1, 2017~~	~~1,720~~
~~Granted~~	—
~~Exercised~~	—
~~Cancelled/Forfeited~~	~~(537~~	)
~~Options outstanding at December 30, 2017~~	~~1,183~~

Restricted Stock Awards and Service-based RSUs

Restricted stock awards were granted to non-employee directors prior to Fiscal 2019. Effective beginning Fiscal 2019, non-employee directors are now granted service-based RSUs in lieu of restricted shares.

The fair values of ~~restricted stock awards~~service-based RSUs granted to certain of the Company's senior executives and other employees, as well as non-employee directors, are ~~determined~~ based on the fair value of the Company's Class A common stock on the date of ~~grant. No such~~grant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not accrue while outstanding and unvested. The weighted-average grant date fair values of service-based RSU awards granted were ~~granted~~$63.98 and $102.96 per share during the nine-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016.~~28, 2019, respectively.

A summary of restricted stock and service-based RSU activity during the nine months ended December 26, 2020 is as follows:


	Number of Shares/Units
	Restricted Stock	Service-based RSUs
	(thousands)
Unvested at March 28, 2020	4	1,094
Granted	0	1,337
Vested	(4)	(466)
Forfeited	0	(100)
Unvested at December 26, 2020	0	1,865


			36

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Performance-based RSUs

The fair values of ~~service-based~~the Company's performance-based RSUs granted to ~~certain of the Company's~~its senior executives ~~as well as to certain of its~~and other key employees are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not ~~entitled to~~ accrue ~~dividend equivalents~~ while ~~outstanding. The weighted-average grant date fair values of service-based RSU awards granted were $73.32~~outstanding and ~~$83.92 per share during the nine-month periods ended December 30, 2017 and December 31, 2016, respectively.~~

~~A summary of restricted stock and service-based RSU activity during the~~ ~~nine months ended December 30, 2017~~ ~~is as follows:~~

Number of Shares
Restricted Stock Service-based RSUs
(thousands)
Nonvested at April 1, 2017 19
922
Granted —
695
Vested —
(325 )
Forfeited —
(140 )
Nonvested at December 30, 2017 19
1,152

~~Performance-based RSUs~~

The fair values of the Company's performance-based RSUs that are not subject to a market condition in the form of a total shareholder return ("TSR") modifier are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards not entitled to accrue dividend equivalents while outstanding.unvested. The weighted-average grant date fair values of performance-based RSUs ~~that do not contain a TSR modifier~~ granted was $83.16 per share during the ~~nine-month periods~~nine months ended December ~~30, 2017 and December 31, 2016 were $69.40 and $86.15 per share, respectively.~~

The fair values of the Company's performance-based RSUs with a TSR modifier are determined on the date of grant using a Monte Carlo simulation valuation model. This pricing model uses multiple simulations to evaluate the probability of the Company achieving various stock price levels to determine its expected TSR performance ranking.28, 2019. No such awards were granted during the ~~nine-month periods~~nine months ended December ~~30, 2017~~26, 2020 as the Company has elected to temporarily issue service-based RSUs in lieu of performance-based RSUs as a result of business disruptions and ~~December 31, 2016.~~



	33

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

uncertainty created by the COVID-19 pandemic.

A summary of performance-based RSU activity during the nine months ended December ~~30, 2017~~26, 2020 is as follows:

Number of Shares

Performance-based
RSUs — without
TSR Modifier

Performance-based
RSUs — with
TSR Modifier
(thousands)
Nonvested at April 1, 2017 788
61
Granted 585
—
Change due to performance/market condition achievement (12 ) (21 )
Vested (149 ) (40 )
Forfeited (28 ) —
Nonvested at December 30, 2017 1,184
—


~~17.~~	~~Segment Information~~	Number of Performance-based RSUs
		(thousands)
Unvested at March 28, 2020		934
Granted		0
Change due to performance condition achievement		185
Vested		(720)
Forfeited		(27)
Unvested at December 26, 2020		372

Market-based RSUs

The Company grants market-based RSUs, which are based on TSR performance, to its senior executives and other key employees. The Company estimates the fair value of its TSR awards on the date of grant using a Monte Carlo simulation, which models multiple stock price paths of the Company's Class A common stock and that of its peer group to evaluate and determine its ultimate expected relative TSR performance ranking. Compensation expense, net of estimated forfeitures, is recorded regardless of whether, and the extent to which, the market condition is ultimately satisfied.

The weighted-average grant date fair values of market-based RSUs granted was $90.59 per share during the nine months ended December 28, 2019. No such awards were granted during the nine months ended December 26, 2020 as the Company has elected to temporarily issue service-based RSUs in lieu of market-based RSUs as a result of business disruptions and uncertainty created by the COVID-19 pandemic. The assumptions used to estimate the fair value of TSR awards granted during the nine months ended December 28, 2019 were as follows:


	Nine Months Ended
	December 28, 2019
Expected term (years)	2.6
Expected volatility	31.4	%
Expected dividend yield	3.2	%
Risk-free interest rate	1.4	%


			37

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of market-based RSU activity during the nine months ended December 26, 2020 is as follows:


						Number of Market-based RSUs
						(thousands)
Unvested at March 28, 2020						234
Granted						0
Change due to market condition achievement						0
Vested						0
Forfeited						0
Unvested at December 26, 2020						234

Stock Options

A summary of stock option activity under all plans during the nine months ended December 26, 2020 is as follows:


						Number of Options
						(thousands)
Options outstanding at March 28, 2020						518
Granted						0
Exercised						0
Cancelled/Forfeited						(247)
Options outstanding at December 26, 2020						271

17. Segment Information

The Company has ~~three~~3 reportable segments based on its business activities and organization:

•North America — The North America segment primarily consists of sales of Ralph Lauren branded apparel, footwear, accessories, home furnishings, and related products made through the Company's ~~wholesale~~retail and ~~retail~~wholesale businesses in the U.S. and Canada, excluding Club Monaco. In North America, the Company's retail business is primarily comprised of its Ralph Lauren stores, its factory stores, and its digital commerce site, www.RalphLauren.com. The Company's wholesale business in North America is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. ~~The Company's retail business in North America is comprised of its Ralph Lauren stores, its factory stores, and its e-commerce site, www.RalphLauren.com.~~

•Europe — The Europe segment primarily consists of sales of Ralph Lauren branded apparel, footwear, accessories, home furnishings, and related products made through the Company's ~~wholesale~~retail and ~~retail~~wholesale businesses in Europe, ~~and~~ the Middle East, and Latin America, excluding Club Monaco. In Europe, the Company's retail business is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various digital commerce sites. The Company's wholesale business in Europe is comprised of a varying mix of sales to both department stores and specialty stores, depending on the ~~country.~~country, as well as to various third-party digital partners.

•Asia — The Asia segment primarily consists of sales of Ralph Lauren branded apparel, footwear, accessories, home furnishings, and related products made through the Company's retail and wholesale businesses in Asia, Australia, and New Zealand. The Company's retail business in ~~Europe~~Asia is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various ~~e-commerce sites.~~

~~Asia~~ ~~— The Asia segment primarily consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company's wholesale and retail businesses~~digital commerce sites, including its new Hong Kong site, www.RalphLauren.hk, which launched in ~~Asia, Australia, and New Zealand. The Company's retail business in Asia is comprised of its Ralph Lauren stores, its factory stores, and its concession-based shop-within-shops.~~October 2020. In addition, the Company sells its products online through various third-party digital partner ~~e-commerce~~commerce sites. ~~In Asia, the~~The Company's wholesale business in Asia is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.


			38

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

No operating segments were aggregated to form the Company's reportable segments. In addition to these reportable segments, the Company also has other non-reportable segments, which primarily consist of (i) sales of Club Monaco branded products made through its retail and wholesale businesses in the U.S., Canada, and Europe, and its licensing alliances in Europe and Asia, ~~(ii) sales of Ralph Lauren branded products made through its wholesale business in Latin America,~~ and ~~(iii)~~(ii) royalty revenues earned through its global licensing alliances, excluding Club Monaco.

The Company's segment reporting structure is consistent with how it establishes its overall business strategy, allocates resources, and assesses performance of its business. The accounting policies of the Company's segments are consistent with those described in Notes 2 and 3 of the Fiscal ~~2017~~2020 10-K. Sales and transfers between segments are generally recorded at cost and treated as transfers of inventory. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Each segment's performance is evaluated based upon net revenues and operating income before ~~restructuring~~restructuring-related charges, impairment of assets, and certain other one-time items, ~~such as legal charges,~~ if any. Certain corporate overhead expenses related to global functions, most notably the Company's executive office, information technology, finance and accounting, human resources, and legal departments, largely remain at corporate. Additionally, other costs that cannot be allocated to the segments based on specific usage are also maintained at corporate, including corporate advertising and marketing expenses, depreciation and amortization of corporate assets, and other general and administrative expenses resulting from corporate-level activities and projects.



	34

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

During the fourth quarter of Fiscal 2017, the Company realigned its segment reporting structure as a result of significant organizational changes implemented in connection with the Way Forward Plan. Refer to Note 20 of the Company's Fiscal 2017 Form 10-K for further discussion. All prior period segment information has been recast to reflect the realignment of the Company's segment reporting structure on a comparative basis.

Net revenues and operating income (loss) for each of the Company's segments are as follows:


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Net revenues:
North America	$	715.4	$	910.6	$	1,423.4	$	2,511.2
Europe	315.6		437.8		795.8		1,278.8
Asia	329.6		289.6		738.1		803.5
Other non-reportable segments	72.2		112.7		156.5		292.2
Total net revenues	$	1,432.8	$	1,750.7	$	3,113.8	$	4,885.7

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Net revenues:
North America $ 886.4
$ 1,000.8
$ 2,471.7
$ 2,901.2
Europe 378.5
349.2
1,165.0
1,172.6
Asia 251.0
235.2
676.9
662.8
Other non-reportable segments 125.9
129.4
339.5
350.8
Total net revenues $ 1,641.8
$ 1,714.6
$ 4,653.1
$ 5,087.4

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Operating income (loss)^(a):

North America $ 196.6
$ 206.4
$ 549.3
$ 574.6
Europe 81.0
63.8
273.6
239.2
Asia 44.3
23.3
101.0
(80.3 )
Other non-reportable segments 37.1
33.2
96.9
91.0
359.0
326.7
1,020.8
824.5
Unallocated corporate expenses (146.5 ) (131.7 ) (469.3 ) (457.2 )
Unallocated restructuring and other charges^(b)
(23.3 ) (66.7 ) (78.7 ) (193.9 )
Total operating income $ 189.2
$ 128.3
$ 472.8
$ 173.4


^(a)	Segment operating income (loss) and unallocated corporate expenses during the three-month and nine-month periods ended December 30, 2017 and December 31, 2016 included certain restructuring-related inventory charges (see Note 8) and asset impairment charges (see Note 7), which are detailed below:

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Restructuring-related inventory charges:
North America $ —
$ (0.6 ) $ (0.8 ) $ (25.4 )
Europe —
(1.3 ) (0.1 ) (13.8 )
Asia —
(12.4 ) —
(106.5 )
Other non-reportable segments —
(0.1 ) (0.4 ) (3.7 )
Total restructuring-related inventory charges $ —
$ (14.4 ) $ (1.3 ) $ (149.4 )


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Operating income (loss)(a):
North America	$	166.1	$	193.1	$	264.6	$	535.6
Europe	54.1		111.9		120.8		331.9
Asia	69.4		46.6		120.6		135.6
Other non-reportable segments	21.5		29.5		37.6		85.2
	311.1		381.1		543.6		1,088.3
Unallocated corporate expenses	(130.8)		(149.7)		(384.1)		(436.4)
Unallocated restructuring and other charges(b)	(9.9)		(7.0)		(177.4)		(51.1)
Total operating income (loss)	$	170.4	$	224.4	$	(17.9)	$	600.8



			3539

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Asset impairment charges:
North America $ (1.7 ) $ (1.7 ) $ (2.6 ) $ (9.4 )
Europe —
(0.3 ) (1.2 ) (1.9 )
Asia (0.2 ) (2.6 ) (1.1 ) (38.1 )
Other non-reportable segments (0.1 ) (5.5 ) (8.7 ) (6.5 )
Unallocated corporate expenses (1.9 ) (0.2 ) (11.2 ) (0.8 )
Total asset impairment charges $ (3.9 ) $ (10.3 ) $ (24.8 ) $ (56.7 )


^(b)			~~The three-month and nine-month periods ended December 30, 2017 and December 31, 2016 included certain unallocated restructuring and other charges (see Note 8), which are detailed below:~~

(a)Segment operating income (loss) during the three months ended December 26, 2020 reflects bad debt expense of $6.5 million and $1.0 million related to North America and Asia, respectively, and net bad debt expense reversals of $2.1 million and $0.3 million related to Europe and other non-reportable segments, respectively, primarily related to adjustments to reserves previously established in connection with COVID-19 business disruptions. During the nine months ended December 26, 2020, segment operating income (loss) reflects net bad debt expense reversals of $14.3 million, $6.1 million, and $0.9 million related to North America, Europe, and other non-reportable segments, respectively, primarily related to adjustments to reserves previously established in connection with COVID-19 business disruptions, and bad debt expense of $1.0 million related to Asia. Segment operating income (loss) and unallocated corporate expenses during the three-month and nine-month periods ended December 26, 2020 and December 28, 2019 also included asset impairment charges (see Note 7), which are detailed below:


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Asset impairment charges:
North America	$	(2.0)	$	(0.4)	$	(11.9)	$	(0.4)
Europe	(0.1)		0		(21.3)		0
Asia	(0.1)		(2.4)		(1.4)		(2.4)
Other non-reportable segments	0		(8.6)		(0.7)		(12.4)
Unallocated corporate expenses	(0.4)		(3.0)		(0.4)		(6.5)
Total asset impairment charges	$	(2.6)	$	(14.4)	$	(35.7)	$	(21.7)

(b)The three-month and nine-month periods ended December 26, 2020 and December 28, 2019 included certain unallocated restructuring and other charges (see Note 8), which are detailed below:


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Unallocated restructuring and other charges:
North America-related	$	(0.7)	$	0	$	(42.0)	$	(0.7)
Europe-related	(5.9)		(0.1)		(32.2)		(3.2)
Asia-related	0		(0.1)		(9.9)		(0.9)
Other non-reportable segment-related	(1.6)		(0.1)		(3.4)		(0.8)
Corporate operations-related	(0.7)		(3.7)		(81.6)		(18.5)
Unallocated restructuring charges	(8.9)		(4.0)		(169.1)		(24.1)
Other charges (see Note 8)	(1.0)		(3.0)		(8.3)		(27.0)
Total unallocated restructuring and other charges	$	(9.9)	$	(7.0)	$	(177.4)	$	(51.1)

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Unallocated restructuring and other charges:
North America-related $ (1.3 ) $ (5.3 ) $ (14.5 ) $ (27.8 )
Europe-related (0.5 ) (1.1 ) (5.6 ) (17.5 )
Asia-related 0.1
(49.2 ) 1.0
(57.5 )
Other non-reportable segment-related —
0.2
(6.8 ) (2.9 )
Corporate-related (18.1 ) (11.3 ) (37.8 ) (88.2 )
Unallocated restructuring charges (19.8 ) (66.7 ) (63.7 ) (193.9 )
Other charges (see Note 8) (3.5 ) —
(15.0 ) —
Total unallocated restructuring and other charges $ (23.3 ) $ (66.7 ) $ (78.7 ) $ (193.9 )


			40

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Depreciation and amortization expense for the Company's segments is as follows:

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Depreciation and amortization:
North America $ 19.5
$ 27.8
$ 61.1
$ 84.0
Europe 9.1
8.6
25.7
23.5
Asia 12.1
11.3
35.7
36.8
Other non-reportable segments 2.6
3.5
8.2
11.1
Unallocated corporate expenses 25.9
26.7
78.2
76.5
Unallocated restructuring and other charges (see Note 8) 3.5
—
10.5
—
Total depreciation and amortization $ 72.7
$ 77.9
$ 219.4
$ 231.9



	36

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Depreciation and amortization expense:
North America	$	17.0	$	18.9	$	52.7	$	56.4
Europe	7.7		8.4		23.5		23.7
Asia	14.5		14.9		43.1		44.6
Other non-reportable segments	1.1		1.4		3.2		4.2
Unallocated corporate	20.0		24.6		63.0		72.1

Total depreciation and amortization expense	$	60.3	$	68.2	$	185.5	$	201.0

Net revenues by geographic location of the reporting subsidiary are as follows:


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Net revenues(a):
The Americas(b)	$	788.6	$	1,025.4	$	1,581.1	$	2,808.4
Europe(c)	314.4		435.5		794.1		1,273.0
Asia(d)	329.8		289.8		738.6		804.3
Total net revenues	$	1,432.8	$	1,750.7	$	3,113.8	$	4,885.7

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Net revenues^(a):

The Americas^(b)
$ 1,009.5
$ 1,126.7
$ 2,801.8
$ 3,242.4
Europe^(c)
381.0
352.3
1,173.3
1,181.0
Asia^(d)
251.3
235.6
678.0
664.0
Total net revenues $ 1,641.8
$ 1,714.6
$ 4,653.1
$ 5,087.4

(a)Net revenues for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.

(b)Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. during the three-month and nine-month periods ended December 26, 2020 were $749.5 million and $1.503 billion, respectively, and $966.0 million and $2.637 billion during the three-month and nine-month periods ended December 28, 2019, respectively.

(c)Includes the Middle East.

(d)Includes Australia and New Zealand.


^(a)			~~Net revenues for certain of the Company's licensed operations are included within the geographic location of the reporting subsidiary which holds the respective license.~~

41
^(b)

RALPH LAUREN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. Additional Financial Information

Includes the U.S., Canada, and Latin America. Net revenues earned in the U.S. during the three-month and nine-month periods ended December 30, 2017 were $946.3 million and $2.629 billion, respectively, and $1.064 billion and $3.066 billion during the three-month and nine-month periods ended December 31, 2016, respectively.


^(c)	~~Includes the Middle East.~~


^(d)	~~Includes Australia and New Zealand.~~


~~18.~~	~~Additional Financial Information~~

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

A reconciliation of cash, cash equivalents, and restricted cash as of December ~~30, 2017~~26, 2020 and ~~April 1, 2017~~March 28, 2020 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:


	December 26, 2020		March 28, 2020
	(millions)
Cash and cash equivalents	$	2,621.5	$	1,620.4
Restricted cash included within prepaid expenses and other current assets	1.6		1.4
Restricted cash included within other non-current assets	8.4		8.0
Total cash, cash equivalents, and restricted cash	$	2,631.5	$	1,629.8

December 30,
2017 April 1,
2017
(millions)
Cash and cash equivalents $ 1,175.7
$ 668.3
Restricted cash included within prepaid expenses and other current assets 13.4
9.8
Restricted cash included within other non-current assets 34.1
33.7
Total cash, cash equivalents, and restricted cash $ 1,223.2
$ 711.8

~~Amounts included in restricted~~Restricted cash ~~relate~~relates to cash ~~placed~~held in escrow with certain banks as collateral, primarily to secure guarantees in connection with certain international tax ~~matters.~~matters and real estate leases.

Cash Interest and Taxes

Cash paid for interest and income taxes is as follows:

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
(millions)
Cash paid for interest $ 3.6
$ 2.9
$ 9.2
$ 9.7
Cash paid for income taxes 19.4
19.2
47.7
69.5



	37

~~RALPH LAUREN CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)
Cash paid for interest	$	16.6	$	2.5	$	27.7	$	10.3
Cash paid for income taxes, net of refunds	15.0		32.8		42.9		114.9

Non-cash Transactions

Operating and finance lease ROU assets recorded in connection with the recognition of new lease liabilities were $61.5 million and $131.8 million during the nine months ended December 26, 2020, respectively, and $326.6 million and $64.0 million, respectively, during the nine months ended December 28, 2019, respectively. Additionally, $55.7 million of operating lease ROU assets were reclassified and reflected as finance lease ROU assets as a result of certain lease amendments executed during the nine months ended December 26, 2020.

Non-cash investing activities also included capital expenditures incurred but not yet paid of ~~$33.9~~$26.0 million and ~~$55.9~~$56.6 million for the nine-month periods ended December ~~30, 2017~~26, 2020 and December ~~31, 2016,~~28, 2019, respectively. ~~Additionally, the Company recorded capital lease assets and corresponding capital lease obligations of $3.3 million and $5.5 million within its consolidated balance sheet~~

Non-cash financing activities during the ~~nine-month periods~~nine months ended December ~~30, 2017 and December 31, 2016, respectively.~~28, 2019 included the conversion of 1.0 million shares of Class B common stock into an equal number of shares of Class A common stock, as discussed in Note 14.

There were no other significant non-cash investing or financing activities for any of the fiscal periods presented.



			3842

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.


~~Item 2.~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations.~~

Special Note Regarding Forward-Looking Statements

Various statements in this Form 10-Q, or incorporated by reference into this Form 10-Q, in future filings by us with the Securities and Exchange Commission (the "SEC"), in our press releases, and in oral statements made from time to time by us or on our behalf constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding our future operating results and sources of liquidity (especially in light of the COVID-19 pandemic), the impact of our strategic plans, initiatives and capital expenses, and our ability to meet environmental, social, and governance goals. Forward-looking statements are based on current expectations and are indicated by words or phrases such as "anticipate," "outlook," "estimate," "expect," "project," ~~"we believe,~~"believe," ~~"is or remains optimistic,~~"envision," ~~"currently envisions,~~"goal," "target," "can," "will," and similar words or phrases and involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed in or implied by such forward-looking statements. These risks, uncertainties, and other factors include, among others:

•the loss of key personnel, including Mr. Ralph Lauren, or other changes in our executive and senior management team or to our operating structure, including those resulting from our decision to significantly reduce our global workforce by the end of Fiscal 2021, and our ability to effectively transfer knowledge and maintain adequate controls and procedures during periods of transition;

•the ~~potential~~ impact to our business ~~and future strategic direction~~ resulting from the COVID-19 pandemic, including periods of reduced operating hours and capacity limits and/or temporary closure of our ~~transition~~stores, distribution centers, and corporate facilities, as well as those of our wholesale customers, licensing partners, suppliers, and vendors, and potential changes to ~~our new Chief Executive Officer;~~consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations;

•our ability to ~~successfully implement our long-term growth strategy and~~ achieve anticipated operating enhancements and cost reductions from our restructuring ~~plans;~~

plans, as well as the impact to our business resulting from ~~investments and other costs incurred in connection with the execution of our long-term growth strategy, including~~ restructuring-related charges, which may be dilutive to our earnings in the short term;

•the impact to our business resulting from potential costs and obligations related to the early or temporary closure of our stores or termination of our long-term, non-cancellable leases;

•our ability to access capital markets and maintain compliance with covenants associated with our existing debt instruments;

•our ability to maintain adequate levels of liquidity to provide for our cash needs, including our debt obligations, tax obligations, capital expenditures, and potential payment of dividends and repurchases of our Class A common stock, as well as the ability of our customers, suppliers, vendors, and lenders to access sources of liquidity to provide for their own cash needs;

•the impact to our business resulting from changes in consumers' ability, willingness, or preferences to purchase discretionary items and luxury retail products, which tends to decline during recessionary periods, and our ability to accurately forecast consumer demand, the failure of which could result in either a build-up or shortage of inventory;

•the impact of economic, political, and other conditions on us, our customers, suppliers, vendors, and lenders, including business disruptions related to pandemic diseases such as COVID-19, civil and political unrest such as the recent protests in the U.S., and escalating diplomatic tensions between the U.S. and China;

•the potential impact to our business resulting from the financial difficulties of certain of our large wholesale customers, which may result in consolidations, liquidations, restructurings, and other ownership changes in the retail industry, as well as other changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors;

•our ability to successfully implement our long-term growth strategy;

•our ability to continue to expand and grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result, as well as our ability to accelerate growth in certain product categories;


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•our ability to open new retail stores and concession shops, as well as enhance and expand our digital footprint and capabilities, all in an effort to expand our direct-to-consumer presence;

•our ability to respond to constantly changing fashion and retail trends and consumer demands in a timely manner, develop products that resonate with our existing customers and attract new customers, and execute marketing and advertising programs that appeal to consumers;

•our ability to effectively manage inventory levels and the increasing pressure on our margins in a highly promotional retail environment;

~~the impact to our business resulting from potential costs and obligations related to the early closure of our stores or termination of our long-term, non-cancellable leases;~~

~~our efforts to successfully enhance, upgrade, and/or transition our global information technology systems and e-commerce platform;~~

•our ability to ~~secure~~continue to maintain our ~~facilities~~brand image and ~~systems~~reputation and ~~those of~~protect our ~~third-party service providers from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, or similar Internet or email events;~~trademarks;

~~the impact~~•our ability to competitively price our ~~business resulting from the recently enacted U.S. tax legislation commonly referred to as the Tax Cuts~~products and Jobs Act, including related changes to our tax obligations and effective tax rate in future periods, as well as the one-time enactment-related charges that were recorded during the third quarter of Fiscal 2018 on a provisional basis based on a reasonable estimate and are subject to change, all of which could differ materially from our current expectations and/or investors' expectations;create an acceptable value proposition for consumers;

changes in our tax obligations and effective tax rate due to a variety of other factors, including potential additional changes in U.S. or foreign tax laws and regulations, accounting rules, or the mix and level of earnings by jurisdiction in future periods that are not currently known or anticipated;

•a variety of legal, regulatory, tax, political, and economic risks, including risks related to the importation and exportation of products ~~tariffs, and other trade barriers~~ which our operations are currently subject to, or may become subject to as a result of potential changes in legislation, and other risks associated with our international operations, such as compliance with the Foreign Corrupt Practices Act or violations of other anti-bribery and corruption laws prohibiting improper payments, and the burdens of complying with a variety of foreign laws and regulations, including tax laws, trade and labor restrictions, and related laws that may reduce the flexibility of our business;

•the potential impact to our ~~exposure~~business resulting from the imposition of additional duties, tariffs, taxes, and other charges or barriers to ~~currency exchange rate fluctuations~~trade, including those resulting from ~~both a transactional~~trade developments between the U.S. and ~~translational perspective;~~China, as well as the trade agreement reached in December 2020 between the United Kingdom and the European Union, and any related impact to global stock markets, as well as our ability to implement mitigating sourcing strategies;

•the impact to our business resulting from increases in the costs of raw materials, transportation, and ~~labor;~~labor, including wages, healthcare, and other benefit-related costs;

•our ability and the ability of our third-party service providers to secure our respective facilities and systems from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, ransomware, or similar Internet or email events;

•our efforts to successfully enhance, upgrade, and/or transition our global information technology systems and digital commerce platforms;



	39

•the potential impact to our business ~~resulting from the financial difficulties of certain~~if any of our large wholesale customers, which may result in consolidations, liquidations, restructurings, and other ownership changes in the retail industry, as well as other changes in the competitive marketplace, including the introduction of new productsdistribution centers were to become inoperable or ~~pricing changes by our competitors;~~inaccessible;

the impact to our business resulting from changes in consumers' ability or preferences to purchase premium lifestyle products that we offer for sale and our ability to forecast consumer demand, which could result in either a build-up or shortage of inventory;

~~our ability to maintain our credit profile and ratings within the financial community;~~

our ability to access sources of liquidity to provide for our cash needs, including our debt obligations, tax obligations, payment of dividends, capital expenditures, and potential repurchases of our Class A common stock, as well as the ability of our customers, suppliers, vendors, and lenders to access sources of liquidity to provide for their own cash needs;

•the potential impact ~~to the trading prices of~~on our ~~securities if~~operations and on our ~~Class A common stock share repurchase activity and/~~suppliers and customers resulting from man-made or ~~cash dividend payments differ from investors' expectations;~~

~~the impact of the volatile state of the global economy, stock markets,~~natural disasters, including pandemic diseases such as COVID-19, severe weather, geological events, and other ~~global economic conditions on us,~~catastrophic events;

•changes in our ~~customers, suppliers, vendors,~~tax obligations and ~~lenders;~~effective tax rate due to a variety of other factors, including potential changes in U.S. or foreign tax laws and regulations, accounting rules, or the mix and level of earnings by jurisdiction in future periods that are not currently known or anticipated;

•our exposure to currency exchange rate fluctuations from both a transactional and translational perspective;

•the impact to our business of events of unrest and instability that are currently taking place in certain parts of the world, as well as from any terrorist action, retaliation, and the threat of further action or retaliation;

•the potential impact to the trading prices of our securities if our Class A common stock share repurchase activity and/or cash dividend payments differ from investors' expectations;

•our ability to ~~open new retail stores, concession shops, and e-commerce sites in an effort to expand our direct-to-consumer presence;~~

~~our ability to continue to expand or grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result;~~

~~our ability to continue to~~ maintain our ~~brand image~~credit profile and ~~reputation and protect our trademarks;~~ratings within the financial community;

•our intention to introduce new products or brands, or enter into or renew ~~alliances and exclusive relationships;~~alliances;

•changes in the business of, and our relationships with, major ~~department store~~wholesale customers and licensing partners;

~~the potential impact on~~ •our ~~operations~~ability to achieve our goals regarding environmental, social, and ~~on our suppliers~~governance practices; and ~~customers resulting from natural or man-made disasters;~~

the impact to our business resulting from the United Kingdom's decision to exit the European Union and the uncertainty surrounding the terms and conditions of such a withdrawal, as well as the related impact to global stock markets and currency exchange rates; and


			44

•our ability to make certain strategic acquisitions and successfully integrate the acquired businesses into our existing operations.

These forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. A detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations is included in our Annual Report on Form 10-K for the fiscal year ended ~~April 1, 2017~~March 28, 2020 (the "Fiscal ~~2017~~2020 10-K"). There are no material changes to such risk factors, ~~other than~~nor have we identified any previously undisclosed risks that could materially adversely affect our business, operating results, and/or financial condition, as set forth in Part II, Item 1A — "Risk Factors" of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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 ~~2018~~2021 will end on March ~~31, 2018~~27, 2021 and will be a 52-week period ("Fiscal ~~2018"~~2021"). Fiscal year ~~2017~~2020 ended on ~~April 1, 2017~~March 28, 2020 and was also a 52-week period ("Fiscal ~~2017"~~2020"). The third quarter of Fiscal ~~2018~~2021 ended on December ~~30, 2017~~26, 2020 and was a 13-week period. The third quarter of Fiscal ~~2017~~2020 ended on December ~~31, 2016~~28, 2019 and was also a 13-week period.



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INTRODUCTION

Management's discussion and analysis of financial condition and results of operations ("MD&A") is provided as a supplement to the accompanying consolidated financial statements and notes thereto to help provide an understanding of our results of operations, financial condition, and liquidity. MD&A is organized as follows:

•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 ~~30, 2017.~~26, 2020. 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.

•Results of operations. This section provides an analysis of our results of operations for the three-month and nine-month periods ended December ~~30, 2017~~26, 2020 as compared to the three-month and nine-month periods ended December ~~31, 2016.~~

28, 2019.

•Financial condition and liquidity. This section provides a discussion of our financial condition and liquidity as of December ~~30, 2017~~,26, 2020, 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 ~~30, 2017~~26, 2020 as compared to the nine months ended December ~~31, 2016;~~28, 2019; (iii) an analysis of our liquidity, including the availability under our commercial paper borrowing program and credit facilities, ~~common stock repurchases, payments of dividends, and~~ our outstanding debt and covenant ~~compliance;~~compliance, common stock repurchases, and payments of dividends; and (iv) a description of any material changes in our contractual and other obligations since ~~April 1, 2017.~~

March 28, 2020.

•Market risk management. This section discusses any significant changes in our risk exposures related to foreign currency exchange rates, interest rates, and our investments since ~~April 1, 2017.~~

March 28, 2020.

•Critical accounting policies. This section discusses any significant changes in our critical accounting policies since ~~April 1, 2017.~~March 28, 2020. Critical accounting policies typically require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 of the Fiscal ~~2017~~2020 10-K.

•Recently issued accounting standards. This section discusses the potential impact on our reported results of operations and financial condition of certain accounting standards that have been recently ~~issued or proposed.~~issued.


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OVERVIEW

Our Business

Our Company is a global leader in the design, marketing, and distribution of premium lifestyle products, including apparel, footwear, accessories, home furnishings, fragrances, and ~~other licensed product categories.~~hospitality. Our long-standing reputation and distinctive image have been developed across an expanding number of products, brands, sales channels, and international markets. Our brand names include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, Chaps, and Club Monaco, among others.

We diversify our business by geography (North America, Europe, and Asia, among other regions) and ~~channels~~channel of distribution ~~(wholesale, retail,~~(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. ~~Our wholesale sales are made principally to major department stores and specialty stores around the world.~~ We ~~also~~ sell directly to consumers through our integrated retail channel, which includes our retail stores, concession-based shop-within-shops, and ~~e-commerce~~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 ~~unrelated~~ third parties for specified periods the right to ~~operate retail stores and/or to use~~access our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings.



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We organize our business into the following three reportable segments:

•North America — Our North America segment, representing approximately ~~57%~~51% of our Fiscal ~~2017~~2020 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our ~~wholesale~~retail and ~~retail~~wholesale businesses in the U.S. and Canada, excluding Club Monaco. In North America, our retail business is primarily comprised of our Ralph Lauren stores, our factory stores, and our digital commerce site, www.RalphLauren.com. Our wholesale business in North America is comprised primarily of sales to department stores, and to a lesser extent, specialty stores. ~~Our retail business in North America is comprised of our Ralph Lauren stores, our factory stores, and our e-commerce site, www.RalphLauren.com.~~

•Europe — Our Europe segment, representing approximately ~~23%~~26% of our Fiscal ~~2017~~2020 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our ~~wholesale~~retail and ~~retail~~wholesale businesses in Europe, ~~and~~ the Middle East, and Latin America, excluding Club Monaco. In Europe, our retail business is primarily comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our various digital commerce sites. Our wholesale business in Europe is comprised of a varying mix of sales to both department stores and specialty stores, depending on the ~~country.~~country, as well as to various third-party digital partners.

•Asia — Our Asia segment, representing approximately 17% of our Fiscal 2020 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 ~~Europe~~Asia is primarily comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our various ~~e-commerce sites.~~

~~Asia~~ ~~— Our Asia segment, representing approximately 13% of~~digital commerce sites, including our ~~Fiscal 2017 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses~~new Hong Kong site, www.RalphLauren.hk, which launched in ~~Asia, Australia, and New Zealand. Our retail business in Asia is comprised of our Ralph Lauren stores, our factory stores, and our concession-based shop-within-shops.~~October 2020. In addition, we sell our products online through various third-party digital partner ~~e-commerce~~commerce sites. ~~In Asia, our~~Our wholesale business in Asia is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.

No operating segments were aggregated to form our reportable segments. In addition to these reportable segments, we also have other non-reportable segments, representing approximately 7%6% of our Fiscal ~~2017~~2020 net revenues, which primarily consist of (i) sales of ~~our~~ Club Monaco branded products made through our retail and wholesale businesses in the U.S., Canada, and Europe, and our licensing alliances in Europe and Asia, ~~(ii) sales of our Ralph Lauren branded products made through our wholesale business in Latin America,~~ and ~~(iii)~~(ii) royalty revenues earned through our global licensing alliances, excluding Club Monaco.

During the fourth quarter of Fiscal 2017, we realigned our segment reporting structure as a result of significant organizational changes implemented in connection with the Way Forward Plan, as defined within "~~Recent Developments~~"~~below. Refer to Note 20~~Approximately 46% of our Fiscal ~~2017 Form 10-K for further discussion. All prior period segment information has been recast to reflect the realignment of our segment reporting structure on a comparative basis.~~

~~Approximately 40% of our Fiscal 2017~~2020 net revenues were earned outside of the U.S. See Note 17 to the accompanying consolidated financial statements for ~~a summary~~further discussion of ~~net revenues and operating income (loss) by~~our segment ~~as well as net revenues by geographic location.~~reporting structure.

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 and higher retail sales in our second and third~~ fiscal quarters. These trends result primarily from the timing of ~~seasonal wholesale shipments and~~ key vacation travel, back-to-school, and holiday shopping periods impacting our retail ~~business.~~business and the timing of seasonal wholesale shipments. As a result of changes in our business, consumer spending patterns, and the macroeconomic environment, including those resulting from disease pandemics and other catastrophic events, historical quarterly operating trends and working capital requirements may not be indicative of our future performance. In addition, fluctuations in net sales, operating


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income (loss), and cash flows in any fiscal quarter may be affected by other events impacting retail sales, such as changes in weather patterns. Accordingly, our operating results and cash flows for the three-month and nine-month periods endedDecember ~~30, 2017~~26, 2020 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal 2021.

Recent Developments

COVID-19 Pandemic

A novel strain of coronavirus commonly referred to as COVID-19 has spread rapidly across the globe, including throughout all major geographies in which we operate (North America, Europe, and Asia), resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. Such factors, among others, have resulted in a significant decline in retail traffic, tourism, and consumer spending on discretionary items. Additionally, during this period of uncertainty, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances, including work furloughs, reduced pay, and severance actions, which could lower consumers' disposable income levels or willingness to purchase discretionary items. Further, even after such government restrictions and company initiatives are lifted, consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations, could be adversely affected.

In connection with the COVID-19 pandemic, we have experienced varying degrees of business disruptions and periods of closure of our stores, distribution centers, and corporate facilities, as have our wholesale customers, licensing partners, suppliers, and vendors. During the first quarter of Fiscal 2021, the majority of our stores in key markets were closed for an average of 8 to 10 weeks, resulting in significant adverse impacts to our operating results. Resurgences in certain parts of the world have resulted in further shutdowns and business disruptions periodically throughout Fiscal 2021. Most recently, during the third quarter of Fiscal 2021, a significant number of our stores in Europe were closed for approximately one month during the holiday period due to government-mandated lockdowns and other restrictions, with such disruptions continuing into the fourth quarter of Fiscal 2021. Further, the majority of our stores that are able to remain open have been operating at limited hours and/or customer capacity levels in accordance with local health guidelines, with traffic remaining challenged. Our wholesale and licensing businesses have also been adversely affected, particularly in North America and Europe, as a result of store closures and lower traffic and consumer demand.

Throughout the pandemic, our priority has been to ensure the safety and well-being of our employees, consumers, and the communities in which we operate around the world. We continue to take into account the guidance of local governments and global health organizations and have implemented new health and safety protocols in our stores, distribution centers, and corporate facilities. We have also taken various preemptive actions to preserve cash and strengthen our liquidity position, including:

•amending our Global Credit Facility in May 2020 to temporarily waive our leverage ratio requirement (see Note 10 to the accompanying consolidated financial statements);

•issuing $1.250 billion of unsecured senior notes in June 2020, the proceeds of which are being used for general corporate purposes, including repayment of certain of our outstanding borrowings (see Note 10 to the accompanying consolidated financial statements);

•temporarily suspending our quarterly cash dividend and common stock repurchase program, effective beginning in the first quarter of Fiscal 2021 (see Note 14 to the accompanying consolidated financial statements);

•temporarily reducing the base compensation of our executives and senior management team, as well as our Board of Directors, for the first quarter of Fiscal 2021;

•furloughing or reducing work hours for a significant portion of our employees during the first half of Fiscal 2021;

•carefully managing our expense structure across all key areas of spend, including aligning inventory levels with anticipated demand, negotiating rent abatements with certain of our landlords, and postponing non-critical capital build-out and other investments and activities;


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•pursuing relevant government subsidy programs related to COVID-19 business disruptions; and

•improving upon our cash conversion cycle largely driven by our accounts receivable collection efforts and extended vendor payment terms.

Despite the recent introduction of vaccinations, the COVID-19 pandemic remains highly volatile and continues to evolve. Accordingly, we cannot predict for how long and to what extent the pandemic will impact our business operations or the global economy as a whole. We will continue to assess our operations location-by-location, taking into account the guidance of local governments and global health organizations to determine when our operations can begin returning to normal levels of business. See Item 1A — "Risk Factors — Infectious disease outbreaks, such as the recent COVID-19 pandemic, could have a material adverse effect on our business" in the Fiscal 2020 10-K for additional discussion regarding risks to our business associated with the COVID-19 pandemic.

Fiscal 2021 Strategic Realignment Plan

We have begun efforts to realign our resources to support future growth and profitability, and to create a sustainable cost structure. The key areas of our evaluation include our: (i) team organizational structures and ways of working; (ii) real estate footprint and related costs across corporate offices, distribution centers, and direct-to-consumer retail and wholesale doors; and (iii) brand portfolio.

In connection with the first initiative, on September 17, 2020, our Board of Directors approved a restructuring plan (the "Fiscal 2021 Strategic Realignment Plan") to reduce our global workforce by the end of Fiscal 2021. Additionally, during our preliminary review of our store portfolio during the second quarter of Fiscal 2021, we made the decision to close our Polo store on Regent Street in London.

On October 29, 2020, we announced the planned transition of our Chaps brand to a fully licensed business model, consistent with our long-term brand elevation strategy in connection with our third initiative (see "Transition of Chaps Brand to a Licensing Model" further below for additional discussion).

Additionally, on February 3, 2021, our Board of Directors approved additional realignment actions related to our real estate initiative. Specifically, we plan to further rightsize and consolidate our global corporate offices to better align with our current organizational profile and new ways of working. We also expect to close certain of our stores to improve overall profitability. Additionally, we plan to complete the consolidation of our existing North America distribution centers in order to drive greater efficiencies, improve sustainability, and deliver a better consumer experience.

In connection with these collective realignment initiatives, we now expect to incur total estimated pre-tax charges of approximately $300 million to $350 million, comprised of cash-related restructuring charges of approximately $185 million to $200 million and non-cash charges of approximately $115 million and $150 million. When substantially completed by the end of our fiscal year ending April 2, 2022 ("Fiscal 2022"), these actions are expected to result in gross annualized pre-tax expense savings of approximately $200 million to $240 million, a portion of which will be reinvested back into the business.

In addition to these actions, we expect to execute additional restructuring-related actions associated with our aforementioned initiatives in order to further support future growth and profitability.

See Note 8 to our accompanying consolidated financial statements for additional discussion regarding charges recorded in connection with the Fiscal 2021 Strategic Restructuring Plan.

Transition of Chaps Brand to a Licensing Model

On October 29, 2020, we announced the planned transition of our Chaps brand to a fully licensed business model, consistent with our long-term brand elevation strategy. Specifically, we have entered into a multi-year licensing partnership, taking effect on August 1, 2021 after a transition period, with an affiliate of 5 Star Apparel LLC, a division of the OVED Group, to manufacture, market, and distribute Chaps menswear and womenswear. The products will be sold at existing channels of distribution with opportunities for expansion into additional channels and markets globally.

This agreement is expected to create incremental value for the Company by enabling an even greater focus on elevating our core brands in the marketplace, reducing our direct exposure to the North America department store channel, and setting up Chaps to deliver on its potential with an experienced partner that is focused on nurturing the brand.


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Fiscal 2019 Restructuring Plan

On June 4, 2018, our Board of Directors approved a restructuring plan associated with our strategic objective of operating with discipline to drive sustainable growth (the "Fiscal 2019 Restructuring Plan"). The Fiscal 2019 Restructuring Plan included the following restructuring-related activities: (i) rightsizing and consolidation of our global distribution network and corporate offices; (ii) targeted severance-related actions; and (iii) closure of certain of our stores and shop-within-shops. Actions associated with the Fiscal 2019 Restructuring Plan resulted in gross annualized expense savings of approximately $80 million.

In connection with the Fiscal 2019 Restructuring Plan, we have recorded cumulative charges of approximately $146 million since its inception. Actions associated with the Fiscal 2019 Restructuring Plan are complete and no additional charges are expected to be incurred in connection with this plan.

See Note 8 to our accompanying consolidated financial statements for additional discussion regarding charges recorded in connection with the Fiscal 2019 Restructuring Plan.

Global Economic Conditions and Industry Trends

The global economy and ~~our~~retail industry are impacted by many different ~~influences. Most recently, the U.S. enacted new tax legislation known as the TCJA (as defined~~factors. The COVID-19 pandemic has resulted in "~~Recent Developments~~" below), which is intended to stimulate economic growth and capital investment in the U.S. by, among its other provisions, lowering tax rates for both corporations and individuals alike. Certain other worldwide events, including political unrest, acts of terrorism, monetary policy changes, and currency and commodity price changes, increase volatility in the global economy. In addition, the current domestic and international political environment, including potential changes to other U.S. policies related to global trade, immigration, and healthcare, have also resulted inheightened uncertainty surrounding the future state of the global economy, as well as significant volatility in global financial markets. As discussed in "Recent Developments," governments worldwide have imposed varying degrees of preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. Such actions, together with changes in consumers' willingness to congregate in populated areas and lower levels of disposal income due to high unemployment rates, have resulted in significant business disruptions across a wide array of industries and an overall decline of the global economy. ~~As our~~Despite the recent introduction of COVID-19 vaccinations, it is not clear at this time how much longer the pandemic will last.

The global economy has also been impacted by the domestic and international ~~business~~political environment, including volatile international trade relations and civil and political unrest taking place in certain parts of the world. The U.S. in particular continues to ~~grow,~~experience civil unrest centered around political allegiances and ~~because~~racial inequality. Additionally, the ~~majority of our products are produced outside of~~United Kingdom recently withdrew from the ~~U.S., major changes in global tax policies or trade relations could have a material adverse effect on our business or operating results. Our results also have been, and are expected~~European Union, commonly referred to ~~continue~~as "Brexit," whereby it ceased to be ~~impacted by foreign exchange rate fluctuations.~~a member effective January 31, 2020. In December 2020, the United Kingdom and the European Union entered into an agreement that defines their future relationship, including terms of trade, that among its provisions will result in new tariffs on goods imported to the United Kingdom from the European Union that were manufactured elsewhere, as well as require additional administrative effort to import and export goods, adding friction and cost to transportation. Further, certain other worldwide events, including escalating diplomatic tensions between the U.S. and China, acts of terrorism, taxation or monetary policy changes, fluctuations in commodity prices, and rising healthcare costs, also increase volatility in the global economy.



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~~In addition, the~~The retail landscape in which we operate ~~is evolving, with~~has been significantly disrupted by the COVID-19 pandemic, including widespread temporary closures of stores and distribution centers and declines in retail traffic, tourism, and consumer spending on discretionary items. Prior to the COVID-19 pandemic, consumers ~~continuing to diversify the channels in which they transact and~~had been increasingly shifting their shopping preference from physical stores to online. This ~~along with other factors,~~shift in preference has ~~resulted~~accelerated during the pandemic and could be further amplified in the future as consumers may continue to prefer to avoid populated locations, such as shopping centers, in fear of exposing themselves to infectious diseases. Even before the pandemic, many retailers, including certain of our large wholesale customers, ~~becoming~~have been highly promotional and have aggressively ~~marking~~marked down their merchandise on a periodic basis in an attempt to offset declines in physical store traffic. The retail industry, particularly in the U.S., has also experienced numerous bankruptcies, restructurings, and ownership changes in recent years. ~~Certain~~The COVID-19 pandemic could exacerbate these trends if companies do not have adequate financial resources and/or access to additional capital to withstand prolonged periods of ~~our operations, including our North America wholesale business, have been negatively impacted by these dynamics.~~adverse economic conditions. The continuation of these industry trends could further impact consumer spending and consumption behavior in our industry, which could have a material adverse effect on our business or operating results. Additionally, changes in economic conditions, including those that may result from the TCJA, can further impact consumer discretionary income levels and spending. While we are optimistic that the TCJA will stimulate economic growth, it is still too early to determine the resulting impact on consumer spending and consumption behavior.

We have implemented various ~~operating~~ strategies globally to help address many of these current challenges and continue to build a foundation for long-term profitable growth centered around strengthening our consumer-facing areas of product, stores, and marketing across channels and driving a more efficient operating model. In ~~connection with these strategies,~~response to the COVID-19 pandemic, we ~~are taking~~have taken preemptive actions to preserve cash and strengthen our liquidity position, as described in "Recent Developments." Investing in our digital ecosystem remains a primary focus and is a key component of our integrated global omni-channel strategy, particularly in light of the current COVID-19 pandemic, which has and could continue to reshape consumer shopping preferences. We continue to expand our offering of Connected Retailing capabilities to enhance the consumer experience, which now include virtual clienteling, Buy Online-Ship to Store, Buy Online-Pick Up in Store, curbside pickup, appointment


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scheduling, and mobile checkout and contactless payments. Further, in October 2020, we launched our new digital flagship in Hong Kong, www.RalphLauren.hk. We also continue to take deliberate actions to ensure promotional consistency across channels and to enhance the overall brand and shopping experience, including ~~reducing~~better aligning shipments ~~to better align~~and inventory levels with underlying ~~demand and lower inventory levels. Additionally, we are~~demand. We also remain committed to optimizing our wholesale distribution channel ~~by closing 20% to 25% of~~and enhancing our ~~underperforming U.S.~~ department store ~~points of distribution by~~consumer experience. We are closely monitoring the ~~end of Fiscal 2018. Further, in October 2017, we began~~latest Brexit developments, including the December 2020 trade agreement, and are assessing risks and opportunities and developing strategies to ~~shift to a more cost-effective and flexible e-commerce platform for~~mitigate our directly operated digital businesses, which is expected to deliver a more brand-enhancing and consistent customer experience across our global digital ecosystem. See our restructuring activities as described within "~~Recent Developments~~" below for further discussion. Although the investments that we are making in our business and our quality of sales initiatives may create operating profit pressure in the near-term, we expect that these initiatives will create longer-term shareholder value.exposure.

We will continue to monitor these conditions and trends and will evaluate and adjust our operating strategies and foreign currency and cost management opportunities to help mitigate the related ~~impact~~impacts on our results of operations, while remaining focused on the long-term growth of our business and protecting and elevating the value of our brand.

For a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations, see Part I, Item 1A — "Risk Factors" in our Fiscal ~~2017 10-K, as well as Part II, Item 1A — "Risk Factors" of this Form 10-Q.~~2020 10-K.

Summary of Financial Performance

Operating Results

During the three months ended December ~~30, 2017,~~26, 2020, we reported net revenues of ~~$1.642~~$1.433 billion, net income of $119.8 million, and net income per diluted share of $1.61, as compared to net revenues of $1.751 billion, net income of $334.1 million, and net income per diluted share of $4.41 during the three months ended December 28, 2019. During the nine months ended December 26, 2020, we reported net revenues of $3.114 billion, a net loss of ~~$81.8~~$47.0 million, and net loss per diluted share of ~~$1.00,~~$0.64, as compared to net revenues of ~~$1.715~~$4.886 billion, net income of ~~$81.3~~$633.3 million, and net income per diluted share of $0.98 during the three months ended December 31, 2016. During the nine months ended December 30, 2017, we reported net revenues of $4.653 billion, net income of $121.5 million, and net income per diluted share of $1.47, as compared to net revenues of $5.087 billion, net income of $104.7 million, and net income per diluted share of $1.25$8.13 during the nine months ended December ~~31, 2016.~~28, 2019. The comparability of our operating results has been affected by ~~one-time charges recorded during the third quarter of Fiscal 2018 in connection with the TCJA,~~net adverse impacts related to COVID-19 business disruptions, as well as restructuring-related charges, impairment of assets, and certain other ~~charges,~~benefits (charges), including one-time income tax events, as discussed further below.

Our operating performance for the three-month and nine-month periods ended December ~~30, 2017~~26, 2020 reflected revenue declines ~~in net revenues~~ of ~~4.2%~~18.2% and ~~8.5%~~36.3%, respectively, on a reported basis and ~~6.1%~~19.9% and ~~8.9%~~36.9%, respectively, on a constant currency basis, as defined within "Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition"below. The ~~declines~~decreases in ~~reported~~ net revenues ~~for the~~during three-month and nine-month periods ended December ~~30, 2017 were primarily due to lower sales from our North America segment~~26, 2020 reflected declines across all regions driven by COVID-19 business disruptions, with the ~~impact~~exception of our ~~quality of distribution and sales initiatives, including lower levels of promotional activity and a strategic reduction in shipments, as well as brand discontinuances and lower consumer demand.~~Asia business which returned to growth during the three months ended December 26, 2020.

Our gross profit as a percentage of net revenues increased by ~~340~~270 basis points to ~~60.7%~~64.9% during the three months ended December ~~30, 2017,~~26, 2020 and increased by ~~540~~410 basis points to ~~61.1%~~66.7% during the nine months ended December ~~30, 2017. These increases were~~26, 2020, both primarily driven by improved pricing and lower levels of promotional activity, ~~in connection with our long-term growth strategy,~~as well as favorable geographic and channel ~~mix, and lower sourcing costs, as well as lower non-cash inventory-related charges recorded in connection with the Way Forward Plan.~~



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mix.

Selling, general, and administrative ("SG&A") expenses as a percentage of net revenues ~~increased by 210 basis points to 47.1%~~ during the three months ended December ~~30, 2017, and~~26, 2020 increased by ~~130~~400 basis points to ~~48.3%~~52.2% and increased by 1,170 basis points to 60.5% during the nine months ended December ~~30, 2017. These increases were~~26, 2020, both primarily ~~due to~~driven by operating deleverage on lower net revenues, and the unfavorable impact attributable to geographic and channel mix, as a greater portion of our revenue was generated by our international retail businesses (which typically carry higher operating expense margins). These increases were largelypartially offset by ~~our operational discipline and cost~~expense savings ~~associated with our restructuring activities.~~across various categories.

Net income decreased by ~~$163.1~~$214.3 million to $119.8 million during the three months ended December ~~30, 2017 to a loss of $81.8 million~~26, 2020 as compared to the three months ended December ~~31, 2016,~~28, 2019, primarily due to a ~~$226.3~~$146.1 million increase in our income tax provision largely driven by one-time ~~charges recorded in connection with the TCJA, partially offset by~~income tax events (including COVID-19-related business disruption impacts and new international tax laws) and a ~~$60.9~~$54.0 million ~~increase~~decline in operating ~~income.~~income driven by COVID-19 business disruptions. Net income ~~increased~~decreased by ~~$16.8~~$680.3 million to a loss of $47.0 million during the nine months ended December ~~30, 2017 to $121.5 million~~26, 2020 as compared to the nine months ended December ~~31, 2016,~~28, 2019, primarily due to a ~~$299.4~~$618.7 million ~~increase~~decline in operating income ~~partially offset~~driven by COVID-19 business disruptions and higher net restructuring-related charges, impairment of assets, and certain other charges, as well as a ~~$283.9~~$27.2 million increase in our income tax provision largely driven by one-time ~~charges recorded in connection with the TCJA.~~

income tax events (including COVID-19-related business disruption impacts and new international tax laws). Net income per diluted share ~~declined~~decreased by ~~$1.98~~$2.80 to ~~a loss of $1.00~~$1.61 per share during the three months ended December ~~30, 2017, due~~26, 2020, and decreased by $8.77 to ~~the lower level~~a loss of ~~net income and lower weighted-average diluted shares outstanding. Net income per diluted share increased by $0.22 to $1.47~~$0.64 per share during the nine months ended December ~~30, 2017,~~26, 2020, primarily due to the ~~higher~~lower level of net ~~income and lower weighted-average diluted shares outstanding.~~income.

~~Net income for the three-month and nine-month periods ended December 30, 2017 reflected one-time charges of $231.3 million, or $2.80 per diluted share, recorded in connection with the TCJA.~~


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Our operating results during the three-month ~~and nine-month~~ periods ended December ~~30, 2017~~26, 2020 and December 28, 2019 were ~~also~~ negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges totaling ~~$27.2~~$19.5 million and ~~$104.8~~$21.4 million, respectively, which had an after-tax effect of reducing net income by ~~$17.9~~$16.6 million, or ~~$0.23~~$0.22 per diluted share, and ~~$69.8~~$16.8 million or ~~$0.85~~$0.22 per diluted share, respectively. ~~Our operating results~~Net income during the three-month ~~and nine-month~~ periods ended December ~~31, 2016~~26, 2020 and December 28, 2019 also reflected incremental net tax expense of $11.8 million, or $0.15 per diluted share, and an income tax benefit of $134.1 million, or $1.77 per diluted share, respectively, recorded in connection with one-time income tax events.

During the nine months ended December 26, 2020 and December 28, 2019, our operating results were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges totaling ~~$91.4~~$184.6 million and ~~$400.0~~$73.8 million, respectively, which had an after-tax effect of reducing net income by ~~$73.6~~$151.6 million, or ~~$0.88~~$2.03 per diluted share, and ~~$298.0~~$57.5 million, or ~~$3.57~~$0.74 per diluted share, respectively. Net income (loss) during the nine-month periods ended December 26, 2020 and December 28, 2019 also reflected incremental net tax expense of $5.9 million, or $0.08 per diluted share, and an income tax benefit of $134.1 million, or $1.72 per diluted share, respectively, recorded in connection with non-recurring income tax events.

Financial Condition and Liquidity

We ended the third quarter of Fiscal ~~2018~~2021 in a net cash and investments position (cash and cash equivalents plus ~~short-term and non-current~~ investments, less total debt) of ~~$1.533~~$1.155 billion, as compared to ~~$786.2~~$945.3 million as of the end of Fiscal ~~2017.~~2020. The increase in our net cash and investments position at December ~~30, 2017~~26, 2020 as compared to ~~April 1, 2017~~March 28, 2020 was primarily due to ~~our~~ operating cash flows of ~~$951.1~~$334.6 million, partially offset by our use of cash to to invest in our business through ~~$123.0~~$80.8 million in capital expenditures and to make dividend payments of ~~$121.7 million.~~

~~We generated $951.1~~$49.8 million ~~of cash from operations~~(which had been previously declared during the ~~nine months ended December 30, 2017, compared to $850.7~~fourth quarter of Fiscal 2020).

Net cash provided by operating activities was $334.6 million during the nine months ended December ~~31, 2016.~~26, 2020, compared to $748.0 million during the nine months ended December 28, 2019. The ~~increase~~decrease in ~~our~~cash provided by operating ~~cash flows~~activities was due to a decrease in net income before non-cash charges, partially offset by a net favorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year ~~period, partially offset by a decline in net income before non-cash charges.~~period.

Our equity ~~increased~~decreased slightly to ~~$3.408~~$2.692 billion as of December ~~30, 2017~~26, 2020 compared to ~~$3.300~~$2.693 billion as of ~~April 1, 2017, primarily attributable~~March 28, 2020, due to our comprehensive ~~income and~~loss largely offset by the net impact of stock-based compensation arrangements ~~partially offset by our dividends declared~~ during the nine months ended December ~~30, 2017.~~

~~Recent Developments~~

~~U.S. Tax Reform~~

During the third quarter of Fiscal 2018, we recorded one-time charges of $231.3 million within our income tax provision in connection with the TCJA, of which $215.5 million related to the mandatory transition tax, which we expect to pay over an



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eight-year period. The remaining charge of $15.8 million related to the revaluation of our deferred tax assets and liabilities. Collectively, these one-time charges, which were recorded on a provisional basis as permitted by SEC Staff Accounting Bulletin No. 118 ("SAB 118"), negatively impacted our effective tax rate by 12,410 basis points and 4,980 basis points during the three-month and nine-month periods ended December 30, 2017, respectively, and lowered our diluted earnings per share by $2.80 during each of these periods. The provisional amounts were based on our present interpretations of the TCJA and current available information, including assumptions and expectations about future events, such as our projected financial performance, and are subject to further refinement as additional information becomes available (including our actual full Fiscal 2018 results of operations and financial condition, as well as potential new or interpretative guidance issued by the Financial Accounting Standards Board or the Internal Revenue Service and other tax agencies) and further analyses are completed.

Despite these one-time charges, we expect the TCJA will ultimately benefit our results of operations and financial condition in future periods, primarily due to the lower U.S. federal statutory income tax rate.

~~See Note 9 to the accompanying consolidated financial statements and Part II, Item 1A — "Risk Factors" of this Form 10-Q for additional discussion.~~

~~Change in Chief Executive Officer~~

Consistent with our announcement on February 2, 2017, Mr. Stefan Larsson departed as the Company's President and Chief Executive Officer and as a member of our Board of Directors, effective as of May 1, 2017. In connection with Mr. Larsson's departure, we recorded cumulative other charges of $17.0 million, of which $5.6 million and $11.4 million was recorded during the first quarter of Fiscal 2018 and fourth quarter of Fiscal 2017, respectively. We do not expect to incur additional charges related to Mr. Larsson's departure. See Note 8 to our accompanying consolidated financial statements for further discussion of the charges recorded in connection with Mr. Larsson's departure.

~~Subsequent to Mr. Larsson's departure, Mr. Patrice Louvet was appointed as the Company's new President and Chief Executive Officer and as a member of our Board of Directors, effective in July 2017.~~

~~Way Forward Plan~~

On June 2, 2016, our Board of Directors approved a restructuring plan with the objective of delivering sustainable, profitable sales growth and long-term value creation for shareholders (the "Way Forward Plan"). We are refocusing on our core brands and evolving our product, marketing, and shopping experience to increase desirability and relevance. We are also evolving our operating model to enable sustainable, profitable sales growth by significantly improving quality of sales, reducing supply chain lead times, improving our sourcing, and executing a disciplined multi-channel distribution and expansion strategy. As part of the Way Forward Plan, we are rightsizing our cost structure and implementing a return on investment-driven financial model to free up resources to invest in the brand and drive high-quality sales. The Way Forward Plan includes strengthening our leadership team and creating a more nimble organization by moving from an average of nine to six layers of management. The Way Forward Plan also includes the discontinuance of our Denim & Supply brand and the integration of our denim product offerings into our Polo Ralph Lauren brand. Collectively, these actions, which were substantially completed during Fiscal 2017, resulted in a reduction in workforce and the closure of certain stores and shop-within-shops, and are expected to result in gross annualized expense savings of approximately $180 million to $220 million.

On March 30, 2017, our Board of Directors approved the following additional restructuring-related activities associated with the Way Forward Plan: (i) the restructuring of our in-house global e-commerce platform which was in development and shifting to a more cost-effective, flexible e-commerce platform through a new agreement with Salesforce's Commerce Cloud, formerly known as Demandware; (ii) the closure of our Polo store at 711 Fifth Avenue in New York City; and (iii) the further streamlining of the organization and the execution of other key corporate actions in line with the Way Forward Plan. These actions, which are expected to result in additional gross annualized expense savings of approximately $140 million, are an important part of our efforts to achieve our stated objective to return to sustainable, profitable growth and invest in the future. These additional restructuring-related activities will result in a further reduction in workforce and the closure of certain corporate office and store locations, and are expected to be largely completed by the end of Fiscal 2018. The remaining activities, which are primarily lease-related, are expected to shift into Fiscal 2019.

In connection with the Way Forward Plan, we currently expect to incur total estimated charges of approximately $770 million, comprised of cash-related restructuring charges of approximately $450 million and non-cash charges of approximately $320 million. Cumulative charges incurred since inception were $645.4 million, of which $22.0 million and $79.0 million were recorded during the three-month and nine-month periods ended December 30, 2017, respectively. Of the remaining charges yet



	45

to be incurred, we expect approximately $50 million will be recorded during the fourth quarter of Fiscal 2018 and approximately $75 million to $85 million will be recorded during Fiscal 2019. In addition to these charges, we also incurred an additional non-cash charge of $155.2 million during Fiscal 2017 associated with the destruction of inventory out of current liquidation channels in line with our Way Forward Plan. See Notes 7 and 8 to our accompanying consolidated financial statements for detailed discussions of the charges recorded in connection with the Way Forward Plan.26, 2020.

Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition

The comparability of our operating results for the three-month and nine-month periods endedDecember ~~30, 2017~~26, 2020 and December ~~31, 2016~~28, 2019 has been affected by ~~restructuring-related~~certain events, including:

•pretax charges ~~impairment of assets, and~~incurred in connection with our restructuring activities, as well as certain other ~~charges,~~asset impairments and other benefits (charges), including those related to COVID-19 business disruptions, as summarized below (references to "Notes" are to the notes to the accompanying consolidated financial statements):


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	December 30, 2017			December 31, 2016			December 30, 2017			December 31, 2016				December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
	(millions)													(millions)
Impairment of assets (see Note 7)	$	(3.9	)	$	(10.3	)	$	(24.8	)	$	(56.7	)	Impairment of assets (see Note 7)	$	(2.6)	$	(14.4)	$	(35.7)	$	(21.7)
Restructuring and other charges (see Note 8)	(23.3		)	(66.7		)	(78.7		)	(193.9		)	Restructuring and other charges (see Note 8)	(9.9)		(7.0)		(177.4)		(51.1)
Restructuring-related inventory charges (see Note 8)^(a)	—			(14.4		)	(1.3		)	(149.4		)
Non-routine inventory charges(a)													Non-routine inventory charges(a)	(7.0)		—		(2.9)		(1.0)
COVID-19-related bad debt expense adjustments(b)													COVID-19-related bad debt expense adjustments(b)	—		—		31.4		—
Total charges	$	(27.2	)	$	(91.4	)	$	(104.8	)	$	(400.0	)	Total charges	$	(19.5)	$	(21.4)	$	(184.6)	$	(73.8)

(a)Non-routine inventory charges are recorded within cost of goods sold in the consolidated statements of operations.

(b)COVID-19-related bad debt expense adjustments are recorded within SG&A expenses in the consolidated statements of operations.


^(a)			~~Non-cash restructuring-related inventory charges are recorded within cost of goods sold in the consolidated statements of operations.~~51

Nine Months Ended
December 30,
2017 December 31,
2016 $
Change
(millions)
Net cash provided by operating activities $ 951.1
$ 850.7
$ 100.4
Net cash provided by (used in) investing activities (317.8 ) 16.3
(334.1 )
Net cash used in financing activities (158.7 ) (369.5 ) 210.8
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 36.8
(29.0 ) 65.8
Net increase in cash, cash equivalents, and restricted cash $ 511.4
$ 468.5
$ 42.9


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Net Cash Provided by Operating Activities. Net cash provided by operating activities ~~increased to $951.1~~was $334.6 million during the nine months ended December ~~30, 2017,~~26, 2020, as compared to ~~$850.7~~$748.0 million during the nine months ended December ~~31, 2016.~~28, 2019. The ~~$100.4~~$413.4 million net ~~increase~~decrease in cash provided by operating activities was due to a decrease in net income before non-cash charges, partially offset by a net favorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year ~~period, partially offset by a decline in~~period.

The net income before non-cash charges. The decline in net income before non-cash charges reflected a one-time charge of $215.5 million recorded in connection with the TCJA's mandatory transition tax. This charge, which is expected to be paid over an eight-year period net of previously available foreign tax credit carryovers (see "~~Contractual and Other Obligations" below), did not impact our cash flows from operating activities during the nine months ended December 30, 2017 as reflected in the offsetting~~ favorable change ~~in our income taxes payable. Excluding the impact of this one-time charge, our operating assets and liabilities, including working capital, increased primarily due to:~~

favorable changes in our (i) other income tax receivables and payables (excluding the impact of the one-time mandatory transition tax) and (ii) prepaid expenses and other current assets, both largely driven by the timing of cash collections and payments; and

~~a decline in our inventory levels, largely driven by our inventory management initiatives, lower sourcing costs, and the timing of inventory receipts.~~

~~These increases~~ related to our operating assets and liabilities, ~~were~~including our working capital, was primarily driven by a favorable change in our accrued liabilities, primarily driven by the increase in our restructuring reserve related to charges recorded in connection with the Fiscal 2021 Strategic Realignment Plan, partially offset by an unfavorable change inrelated to our accounts receivable, largely driven by an increase in wholesale revenue over the ~~timing~~course of ~~cash collections.~~Fiscal 2021.

Net Cash Provided by ~~(Used in)~~ Investing Activities. Net cash ~~used in~~provided by investing activities was ~~$317.8~~$256.6 million during the nine months ended December ~~30, 2017,~~26, 2020, as compared to ~~net cash provided by investing activities of $16.3~~$425.9 million during the nine months ended December ~~31, 2016.~~28, 2019. The ~~$334.1~~$169.3 million net ~~increase~~decrease in cash ~~used in~~provided by investing activities was primarily driven by:

•a ~~$434.5~~$284.5 million ~~increase~~decrease in ~~purchases of investments, less~~ proceeds from sales and maturities of investments, less purchases of investments. During the nine months ended December ~~30, 2017,~~26, 2020, we ~~made~~received net ~~investment purchases~~proceeds from sales and maturities of ~~$190.2~~investments of $335.7 million, as compared to ~~net investment sales of $244.3~~$620.2 million during the nine months ended December ~~31, 2016.~~28, 2019; and

~~This increase~~•a $20.8 million decrease in cash ~~used in investing activities~~proceeds from the sale of property. No property was ~~partially offset by:~~

~~a $102.5 million decline in capital expenditures. During the nine months ended December 30, 2017, we spent $123.0 million on capital expenditures, as compared to $225.5 million~~sold during the nine months ended December ~~31, 2016. Our capital expenditures during the nine months ended December 30, 2017 primarily related to our global retail and~~



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~~department store renovations, new store openings, and the continued enhancements to our global information technology systems.~~

We currently expect to spend approximately $200 million in capital expenditures during Fiscal 2018, lower than our previous estimate of $225 million, as we shift certain capital investments into Fiscal 2019 and focus on consumer-facing initiatives that have demonstrated a proof of concept and healthy rates of return.

~~Net Cash Used in Financing Activities.~~ Net cash used in financing activities was $158.7 million during the nine months ended December 30, 2017, as compared to $369.5 million during the nine months ended December 31, 2016. The $210.8 million net decrease in cash used in financing activities was primarily driven by:

~~a $116.1 million decline in cash used to repay debt, less proceeds from debt issuances. We did not issue or repay any debt during the nine months ended December 30, 2017.~~26, 2020. On a comparative basis, during the nine months ended December ~~31, 2016,~~28, 2019, we ~~made $90.0~~received net cash proceeds of $20.8 million from the sale of our corporate jet. These proceeds were donated to the Ralph Lauren Corporate Foundation (formerly known as the Polo Ralph Lauren Foundation), which is reflected within cash flows from operating activities for the nine months ended December 28, 2019.

These decreases in ~~net repayments~~cash provided by investing activities were partially offset by:

•a $135.2 million decrease in capital expenditures. During the nine months ended December 26, 2020, we spent $80.8 million on capital expenditures, as compared to $216.0 million during the nine months ended December 28, 2019. This decline reflects the temporary postponement of non-critical capital expenditures as a preemptive action to preserve cash and strengthen our liquidity position in response to current business disruptions related to the COVID-19 pandemic. Our capital expenditures during the nine months ended December 26, 2020 primarily related to international store openings and renovations, as well as enhancements to our ~~commercial paper note issuances and repayments and repaid $26.1~~information technology systems.

Net Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities was $363.7 million during the nine months ended December 26, 2020, as compared to net cash used in financing activities of ~~borrowings previously outstanding under our credit facilities; and~~$706.8 million during the nine months ended December 28, 2019. The $1.071 billion net increase in cash provided by financing activities was primarily driven by:

•a ~~$99.1~~$506.0 million ~~decline~~decrease in cash used to repurchase shares of our Class A common stock. During the nine months ended December ~~30, 2017, $15.9~~26, 2020, $36.1 million in shares of Class A common stock were surrendered or withheld in satisfaction of withholding taxes in connection with the vesting of awards under our long-term stock incentive ~~plans.~~plans, and no shares of Class A common stock were repurchased pursuant to our common stock repurchase program, which we have temporarily suspended as a preemptive action to preserve cash and strengthen our liquidity position in response to current business disruptions related to the COVID-19 pandemic. On a comparative basis, during the nine months ended December ~~31, 2016,~~28, 2019, we used ~~$100.0~~$498.3 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional ~~$15.0~~$43.8 million in shares of Class A common stock were surrendered or withheld for ~~taxes.~~taxes;

•a $466.9 million increase in cash proceeds from the issuance of debt, less debt repayments. During the nine months ended December 26, 2020, we received $1.242 billion in proceeds from our issuance of 1.700% unsecured notes and 2.950% unsecured senior notes, a portion of which was used to repay $475.0 million of borrowings previously outstanding under our credit facilities and our previously outstanding $300 million principal amount of unsecured 2.625% senior notes that matured August 18, 2020. On a comparative basis, during the nine months ended December 28, 2019, we did not issue or repay any debt; and


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•a $103.4 million decrease in payments of dividends, driven by the temporary suspension of our quarterly cash dividend program as a preemptive action to preserve cash and strengthen our liquidity position, as discussed in "Dividends" below.

Sources of Liquidity

Our primary sources of liquidity are the cash flows generated from our operations, our available cash and cash equivalents and short-term investments, availability under our credit and overdraft facilities ~~our issuances of~~and commercial paper ~~notes,~~program, and other available financing options.

During the nine months ended December ~~30, 2017,~~26, 2020, we generated ~~$951.1~~$334.6 million of net cash flows from our operations. As of December ~~30, 2017,~~26, 2020, we had ~~$2.038~~$2.787 billion in cash, cash equivalents, and short-term investments, of which ~~$1.203 billion~~$906.7 million were held by our subsidiaries domiciled outside the U.S. We are not dependent on foreign cash to fund our domestic operations. ~~Given recent changes~~Undistributed foreign earnings that were subject to the ~~taxation~~Tax Cuts and Jobs Act's one-time mandatory transition tax as of December 31, 2017 are not considered to be permanently reinvested and may be repatriated to the U.S. in the future with minimal or no additional U.S. taxation. We intend to permanently reinvest undistributed foreign earnings ~~in connection with~~generated after December 31, 2017 that were not subject to the ~~TCJA (as discussed within "Recent Developments"), we are exploring repatriation possibilities. If~~one-time mandatory transition tax. However, if our plans change and we choose to repatriate ~~any funds~~post-2017 earnings to the U.S. in the future, we ~~could potentially~~would be subject to applicable ~~state, local, and/or~~U.S. and foreign taxes. Any further changes in tax regulations could potentially change our future intentions regarding the reinvestment of our foreign earnings and we continue to monitor governing tax rules, as well as our cash needs.

The following table presents our total availability, borrowings outstanding, and remaining availability under our credit and overdraft facilities and Commercial Paper Program as of December ~~30, 2017:~~26, 2020:

December 30, 2017
Description^(a)

Total
Availability

Borrowings
Outstanding

Remaining
Availability
(millions)
Global Credit Facility and Commercial Paper Program^(b)
$ 500
$ 9
^(c)
$ 491
Pan-Asia Credit Facilities 51
—
51


	December 26, 2020
Description(a)	Total Availability		Borrowings Outstanding			Remaining Availability
	(millions)
Global Credit Facility and Commercial Paper Program(b)	$	500	$	9	(c)	$	491
Pan-Asia Credit Facilities	35		—			35
Japan Overdraft Facility	48		—			48


^(a)	~~As defined in Note 10 to the accompanying consolidated financial statements.~~


^(b)	Borrowings under the Commercial Paper Program are supported by the Global Credit Facility. Accordingly, we do not expect combined borrowings outstanding under the Commercial Paper Program and the Global Credit Facility to exceed $500 million.


^(c)	~~Represents outstanding letters of credit for which we were contingently liable under the Global Credit Facility as of December 30, 2017.~~



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(a)As defined in Note 10 to the accompanying consolidated financial statements.

(b)Borrowings under the Commercial Paper Program are supported by the Global Credit Facility. Accordingly, we do not expect combined borrowings outstanding under the Commercial Paper Program and the Global Credit Facility to exceed $500 million.

(c)Represents outstanding letters of credit for which we were contingently liable under the Global Credit Facility as of December 26, 2020.

We believe that ~~our~~the Global Credit Facility is adequately diversified with no undue concentration in any one financial institution. In particular, as of December ~~30, 2017,~~26, 2020, there were ~~nine~~eight financial institutions participating in the Global Credit Facility, with no one participant maintaining a maximum commitment percentage in excess of 20%. In accordance with the terms of the agreement, we have the ability to expand our borrowing availability under the Global Credit Facility to $1 billion through the full term of the facility, subject to the agreement of one or more new or existing lenders under the facility to increase their commitments.

Borrowings under the Pan-Asia Credit Facilities and Japan Overdraft Facility (collectively, the "Pan-Asia Borrowing Facilities") are guaranteed by the parent company and are granted at the sole discretion of the participating ~~regional branches of JPMorgan Chase (the "Banks")~~banks (as described within Note 10 to the accompanying consolidated financial statements), subject to availability of the ~~Banks'~~respective banks' funds and satisfaction of certain regulatory requirements. We have no reason to believe that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the Global Credit Facility and the Pan-Asia ~~Credit~~Borrowing Facilities in the event of our election to draw additional funds in the foreseeable future.

Our sources of liquidity are used to fund our ongoing cash requirements, including working capital requirements, global retail store and ~~e-commerce~~digital commerce expansion, construction and renovation of shop-within-shops, investment in infrastructure, including technology, acquisitions, joint ventures, payment of dividends, debt repayments, Class A common stock repurchases, settlement of contingent liabilities (including uncertain tax positions), and other corporate activities, including our restructuring actions. We believe that our existing sources of cash, the availability under our credit facilities, and our ability to access capital markets will be sufficient to support our operating, capital, and debt service requirements for the foreseeable future, the ongoing


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development of our businesses, and our plans for further business expansion. However, prolonged periods of adverse economic conditions or business disruptions in any of our key regions, or a combination thereof, such as those resulting from the COVID-19 pandemic, could impede our ability to pay our obligations as they become due or return value to our shareholders, as well as delay previously planned expenditures related to our operations.

See Note 10 to the accompanying consolidated financial statements and Note 1211 of the Fiscal ~~2017~~2020 10-K for detailed disclosure of the terms and conditions of our credit facilities.

~~Common Stock Repurchase Program~~

As of December 30, 2017, the remaining availability under our Class A common stock repurchase program was approximately $100 million. Repurchases of shares of Class A common stock are subject to overall business and market conditions. We currently do not expect to repurchase shares under our Class A common stock repurchase program during Fiscal 2018, as we evaluate the cash needs of our business, the sector dynamics, and recent changes to U.S. tax law.

~~See Note 14 to the accompanying consolidated financial statements for additional information relating to our Class A common stock repurchase program.~~

~~Dividends~~

Since 2003, we have maintained, and intend to continue to maintain, a regular quarterly cash dividend program on our common stock. However, any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, cash requirements, financial condition, and other factors that the Board of Directors may deem relevant.

~~See Note 14 to the accompanying consolidated financial statements for additional information relating to our quarterly cash dividend program.~~

Debt and Covenant Compliance

In ~~September 2013,~~August 2018, we completed a registered public debt offering and issued ~~$300~~$400 million aggregate principal amount of unsecured senior notes due September ~~26, 2018,~~15, 2025, which bear interest at a fixed rate of ~~2.125%~~3.750%, payable semi-annually (the ~~"2.125%~~"3.750% Senior Notes"). In ~~August 2015,~~June 2020, we completed ~~a second~~another registered public debt offering and issued an additional ~~$300~~$500 million aggregate principal amount of unsecured senior notes due ~~August 18, 2020,~~June 15, 2022, which bear interest at a fixed rate of ~~2.625%~~1.700% payable semi-annually (the "1.700% Senior Notes"), and $750 million aggregate principal amount of unsecured senior notes due June 15, 2030, which bear interest at a fixed rate of 2.950%, payable semi-annually (the ~~"2.625%~~"2.950% Senior Notes").

The indenture and supplemental indentures governing the ~~2.125%~~3.750% Senior Notes, 1.700% Senior Notes, and ~~2.625%~~2.950% Senior Notes (as supplemented, the "Indenture") contain certain covenants that restrict our ability, subject to specified exceptions, to incur certain liens; enter into sale and leaseback transactions; consolidate or merge with another party; or sell, lease, or convey all or substantially all of our property or assets to another party. However, the Indenture does not contain any financial covenants.

We have a credit facility that provides for a $500 million senior unsecured revolving line of credit through August 12, 2024, which is also used to support the issuance of letters of credit and the maintenance of the Commercial Paper Program (the "Global Credit Facility"). Borrowings under the Global Credit Facility may be denominated in U.S. Dollars and other currencies, including Euros, Hong Kong Dollars, and Japanese Yen. We have the ability to expand the borrowing availability under the Global Credit Facility to $1 billion, subject to the agreement of one or more new or existing lenders under the facility to increase their commitments. There are no mandatory reductions in borrowing ability throughout the term of the Global Credit Facility. In March 2020, we borrowed $475.0 million under the Global Credit Facility as a preemptive action to preserve cash and strengthen our liquidity position in response to the COVID-19 pandemic, which was subsequently repaid in June 2020 using a portion of the proceeds from our issuances of the 1.700% Senior Notes and 2.950% Senior Notes.

The Global Credit Facility contains a number of covenants, as described in Note 10 to the accompanying consolidated financial statements. As of December ~~30, 2017,~~26, 2020, no Event of Default (as such term is defined pursuant to the Global Credit Facility) has occurred under our Global Credit Facility. The Pan-Asia ~~Credit~~Borrowing Facilities do not contain any financial covenants.



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See Note 10 to the accompanying consolidated financial statements and Note 1211 of the Fiscal ~~2017~~2020 10-K for additional information relating to our debt and covenant compliance.

Common Stock Repurchase Program

On May 13, 2019, our Board of Directors approved an expansion of our existing common stock repurchase program that allowed us to repurchase up to an additional $600 million of Class A common stock. As of December 26, 2020, the remaining availability under our Class A common stock repurchase program was approximately $580 million. Repurchases of shares of Class A common stock are subject to certain restrictions under our Global Credit Facility and more generally overall business and market conditions. Accordingly, as a result of current business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal 2021 we temporarily suspended our common stock repurchase program as a preemptive action to preserve cash and strengthen our liquidity position.

See Note 14 to the accompanying consolidated financial statements for additional information relating to our Class A common stock repurchase program.

Dividends

Except as discussed below, we have maintained a regular quarterly cash dividend program on our common stock since 2003. On May 13, 2019, our Board of Directors approved an increase to the quarterly cash dividend on our common stock from $0.625 to $0.6875 per share.


			67

As a result of current business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal 2021 we temporarily suspended our quarterly cash dividend program as a preemptive action to preserve cash and strengthen our liquidity position. Any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, cash requirements, financial condition, and other factors that the Board of Directors may deem relevant, including economic and market conditions.

See Note 14 to the accompanying consolidated financial statements for additional information relating to our quarterly cash dividend program.

Contractual and Other Obligations

~~In connection with~~There have been no material changes to our contractual and other obligations as disclosed in our Fiscal 2020 10-K, other than those which occur in the ~~TCJA's provision that subjects previously deferred foreign earnings to a one-time mandatory transition tax (as described in "Recent Developments"), we recorded a charge~~ordinary course of $215.5 million within our income tax provision during the third quarter of Fiscal 2018, together with a corresponding current and non-current income tax payable obligation within our consolidated balance sheets based upon the estimated timing of payments. This obligation, which was recorded on a provisional basis and is subject to change, is expected to be paid over an eight-year period as follows:


^(a)	The expected mandatory transition tax payments have been presented net of previously available foreign tax credit carryovers of $37.5 million, which we expect to utilize to partially reduce this tax obligation.

business. Refer to the"Financial Condition and Liquidity — Contractual and Other Obligations"section of the MD&A in our Fiscal ~~2017~~2020 10-K for detailed disclosure of our ~~other commitments~~contractual and ~~contractual~~other obligations as of ~~April 1, 2017.~~March 28, 2020.

MARKET RISK MANAGEMENT

As discussed in Note 1413 of the Fiscal ~~2017~~2020 10-K and Note 12 to the accompanying consolidated financial statements, we are exposed to a variety of risks, including the impact of changes in ~~foreign~~ currency exchange rates ~~relating to~~on foreign currency-denominated balances, certain anticipated cash flows ~~from~~of our international operations, and ~~possible declines in~~ the value of reported net assets of our foreign operations, as well as changes in the fair value of our fixed-rate debt obligations relating to ~~changes~~fluctuations in benchmark interest rates. ~~Consequently,~~Accordingly, at times, in the normal course of business, we employ established policies and procedures to manage such risks, including the use of derivative financial ~~instruments, to manage such risks.~~instruments. We do not ~~enter into derivative transactions~~use derivatives for speculative or trading purposes.

~~As a result of the~~Given our use of derivative instruments, we are exposed to the risk that the counterparties to ~~our~~such contracts will fail to meet their contractual obligations. To mitigate ~~this~~such counterparty credit risk, ~~we have a~~it is our policy ofto only ~~entering~~enter into contracts with carefully selected financial institutions based upon an evaluation of their credit ratings and certain other factors, adhering to established limits for credit exposure. Our established policies and procedures for mitigating credit risk ~~from derivative transactions~~ include ongoing review and assessment of the creditworthiness of our counterparties. We also enter into master netting arrangements with counterparties, when possible, to further mitigate credit ~~risk associated with our derivative instruments.~~risk. As a result of the above considerations, we do not believe that we are exposed to ~~any~~ undue concentration of counterparty risk with respect to our derivative contracts as of December ~~30, 2017.~~26, 2020. However, we do have in aggregate ~~$4.2~~$5.1 million of derivative instruments in net asset positions with three creditworthy financial institutions.

Foreign Currency Risk Management

We manage our exposure to changes in foreign currency exchange rates ~~through the use of~~using forward foreign currency exchange and cross-currency swap contracts. ~~See~~ Refer to Note 12 to the accompanying consolidated financial statements for a summary of the notional amounts and fair values of our outstanding forward foreign currency exchange and cross-currency swap contracts, ~~outstanding~~as well as the impact on earnings and other comprehensive income of such instruments as of December ~~30, 2017~~.



	62

26, 2020.

Forward Foreign Currency Exchange Contracts

We enter into forward foreign currency exchange contracts ~~as hedges~~ to ~~reduce our~~mitigate risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency, ~~intercompany royalty payments made by certain of our international operations, and~~ the settlement of foreign currency-denominated ~~balances.~~balances, and the translation of certain foreign operations' net assets into U.S. Dollars. As part of our overall strategy ~~to manage~~for managing the level of exposure to ~~the risk of foreign currency~~such exchange rate ~~fluctuations,~~risk, relating primarily to ~~changes in the value of~~ the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, the Swiss Franc, ~~the Swedish Krona,~~and the Chinese ~~Yuan, the New Taiwan Dollar, and the Hong Kong Dollar,~~Renminbi, we generally hedge a portion of our ~~foreign currency~~related exposures anticipated over ~~a two-year period. In doing so, we use~~the next twelve months using forward foreign currency exchange contracts ~~that generally have~~with maturities of two months to ~~two years~~one year to provide continuing coverage ~~throughout~~over the ~~hedging~~ period of the respective exposure.

Our foreign exchange risk management activities are governed by ~~our Company's~~ established policies and procedures. These policies and procedures provide a framework that allows for the management of currency exposures while ensuring the activities are conducted within our established guidelines. Our policies include guidelines for the organizational structure of our risk management function and for internal controls over foreign exchange risk management activities, including, but not limited to, authorization levels, transaction limits, and credit quality controls, as well as various measurements for monitoring compliance. We monitor foreign exchange risk using different techniques, including a periodic review of market values and performance of sensitivity analyses.


			68

Our forward foreign currency exchange contracts are recorded at fair value in our consolidated balance sheets. To the extent such contracts are designated as qualifying cash flow hedges of inventory transactions, related gains or losses are initially deferred in equity as a component of accumulated other comprehensive income ("AOCI") and are subsequently recognized within cost of goods sold in our consolidated statements of operations when the related inventory is sold.

Cross-Currency Swap Contracts

~~During our fiscal year ended April 2, 2016 ("Fiscal 2016"), we entered into two~~We periodically designate (i) pay-floating rate, receive-floating rate cross-currency ~~swaps, with notional amounts of €280 million and €274 million, which we designated~~swap contracts or (ii) pay-fixed rate, receive fixed-rate cross-currency swap contracts as hedges of our net investment in certain ~~of our~~ European ~~subsidiaries (the "Cross-Currency Swaps"). The Cross-Currency Swaps, which mature on September 26, 2018 and August 18, 2020, respectively,~~subsidiaries.

Our pay-floating rate, receive-floating rate cross-currency swap ~~the~~contracts swap U.S. Dollar-denominated variable interest rate payments based on the contract's notional amount and 3-month London Interbank Offered Rate ("LIBOR") plus a fixed spread (as paid under a corresponding interest rate swap contract discussed below) for Euro-denominated variable interest rate payments based on ~~the~~ 3-month Euro Interbank Offered Rate ("EURIBOR") plus a fixed ~~spread. As~~spread, which, in combination with a ~~result, the Cross-Currency Swaps, in conjunction with the Interest Rate Swaps (as defined below),~~corresponding interest rate swap contract, economically ~~convert~~converts a portion of our ~~$300 million~~ fixed-rate ~~2.125% and $300 million fixed-rate 2.625%~~US-denominated senior note obligations to ~~€280 million and €274 million~~ floating-rate Euro-denominated ~~liabilities, respectively.~~obligations.

Our pay-fixed rate, receive-fixed rate cross-currency swap contracts swap U.S. Dollar-denominated fixed interest rate payments based on the contract's notional amount and the fixed rate of interest payable on certain of our senior notes for Euro-denominated fixed interest rate payments, thereby economically converting a portion of our fixed-rate US-denominated senior note obligations to fixed rate Euro-denominated obligations.

See Note 3 to the accompanying consolidated financial statements for further discussion of our foreign currency exposures, and the types of derivative instruments used to hedge those exposures.

Interest Rate Risk Management

~~During Fiscal 2016, we entered into two~~We periodically designate pay-floating rate, receive-fixed rate interest rate swap contracts ~~which we designated~~ as hedges against changes in the ~~respective~~ fair ~~values~~value of certain of our fixed-rate ~~2.125% Senior Notes and our fixed-rate 2.625% Senior Notes~~debt attributed to changes in ~~the~~a benchmark interest ~~rate (the "Interest Rate Swaps"). The Interest Rate Swaps, which mature on September 26, 2018 and August 18, 2020, respectively, both have~~rate. To the extent of their notional ~~amounts of $300 million and~~amount, such contracts effectively swap the fixed interest ~~rates~~rate on certain of our ~~2.125% Senior Notes and 2.625% Senior Notes~~fixed-rate senior notes for a variable interest ~~rates~~rate based on 3-month LIBOR plus a fixed spread.

Investment Risk Management

As of December ~~30, 2017,~~26, 2020, we had cash and cash equivalents on-hand of ~~$1.176~~$2.622 billion, consisting of deposits in interest bearing accounts, investments in money market deposit accounts, and investments in time deposits ~~and commercial paper~~ with original maturities of 90 days or less. Our other significant investments included ~~$862.3~~$165.7 million of short-term investments, consisting of investments in time deposits ~~and commercial paper~~ with original maturities greater than 90 days; ~~$47.5~~and $10.0 million of restricted cash ~~placed~~held in escrow with certain banks as collateral, primarily to secure guarantees in connection with certain international tax ~~matters;~~matters and ~~$83.3 million of investments with maturities greater than one year, consisting of time deposits.~~real estate leases.

We actively monitor our exposure to changes in the fair value of our global investment portfolio in accordance with our established policies and procedures, which include monitoring both general and issuer-specific economic conditions, as discussed ~~further below.~~in Note 3 to the accompanying consolidated financial statements. Our investment objectives include capital preservation, maintaining adequate liquidity, diversification to minimize liquidity and credit risk, and achievement of maximum returns within the guidelines set forth in our investment policy. See Note 12 to the accompanying consolidated financial statements for further detail of the composition of our investment portfolio as of December ~~30, 2017~~.26, 2020.



	63

We evaluate investments held in unrealized loss positions, if any, for other-than-temporary impairment on a quarterly basis. This evaluation involves a variety of considerations, including assessments of risks and uncertainties associated with general economic conditions and distinct conditions affecting specific issuers. We consider the following factors: (i) the length of time and the extent to which the fair value has been below cost, (ii) the financial condition, credit worthiness, and near-term prospects of the issuer, (iii) the length of time to maturity, (iv) anticipated future economic conditions and market forecasts, (v) our intent and ability to retain our investment for a period of time sufficient to allow for recovery of market value, and (vi) an assessment of whether it is more likely than not that we will be required to sell our investment before recovery of market value. No material realized or unrealized gains or losses on available-for-sale investments or other-than-temporary impairment charges were recorded in any of the fiscal periods presented.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in Note 3 of the Fiscal ~~2017~~2020 10-K. Our estimates are often based on complex judgments, assessments of probability, and assumptions that management believes to be reasonable, but that are inherently uncertain and unpredictable. It is also possible that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts. For a complete discussion of our critical accounting policies, ~~see~~refer to the "Critical Accounting Policies" section of the MD&A in our Fiscal ~~2017~~2020 10-K.

There have been no significant changes in the application of our critical accounting policies since ~~April 1, 2017~~.March 28, 2020.


			69

Goodwill Impairment Assessment

We performed our annual goodwill impairment assessment using a qualitative approach as of the beginning of the second quarter of Fiscal ~~2018.~~2021. In performing the assessment, we identified and considered the significance of relevant key factors, events, and circumstances that affected the fair values and/or carrying amounts of our reporting units with allocated goodwill. These factors included external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as our actual and expected financial performance. Additionally, we also considered the results of our most recent quantitative goodwill impairment test, which was performed as of the end of Fiscal 2020 and incorporated assumptions related to COVID-19 business disruptions, the results of which indicated that the fair values of these reporting units significantly exceeded their respective carrying values. Based on the results of our qualitative goodwill impairment assessment, we concluded that it is not more likely than not that the fair values of our reporting units are less than their respective carrying values, and there were no reporting units at risk of impairment.

RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 4 to the accompanying consolidated financial statements for a description of certain recently issued ~~or proposed~~ accounting standards which have impacted our consolidated financial statements, or may impact our consolidated financial statements in future reporting periods.


~~Item 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk.~~

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

For a discussion of the Company's exposure to market risk, see "Market Risk Management" presented in Part I, Item 2 — MD&A of this Form 10-Q and incorporated herein by reference.


~~Item 4.~~	~~Controls and Procedures.~~

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

We carried out an evaluation based on criteria established in the Internal Control -— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) under the supervision and with the participation of management, including our principal executive and principal financial officers, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities



	64

Exchange Act of 1934. Based on that evaluation, our principal executive and principal financial officers have concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of December ~~30, 2017. Except as discussed below, there~~26, 2020. There has been no change in the Company's internal control over financial reporting during the fiscal quarter ended December ~~30, 2017~~26, 2020 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

~~Operating and Financial Reporting System Implementation~~

~~During~~Although there have been no material changes in the ~~first quarter of Fiscal 2018, we completed the migration of our European operations to an operating and~~Company's internal control over financial reporting, ~~information technology system, SAP, as part of a multi-year plan to integrate and upgrade our global systems and processes.~~

~~As a result of the implementation of this system,~~ we have experienced ~~certain changes~~varying degrees of business disruptions related to the COVID-19 pandemic, including periods of closure of our stores, distribution centers, and corporate facilities, as described within "Recent Developments." In response to the COVID-19 pandemic, we have taken various preemptive actions to preserve cash and strengthen our liquidity position, including furloughing and/or reducing work hours for a significant portion of both our store and corporate employees during the first half of Fiscal 2021, with those corporate employees not furloughed in affected regions working remotely. Additionally, our Board of Directors recently approved a restructuring plan, as described within "Recent Developments," which is expected to result in a significant reduction to our ~~processes and procedures which, in turn, resulted in~~global workforce during the second half of Fiscal 2021. Despite such cumulative actions, we have not experienced any material changes to our internal ~~control~~controls over financial reporting. ~~While we expect SAP to strengthen our internal financial controls by automating certain manual processes and standardizing business processes and reporting across our organization, management~~We will continue to evaluate and monitor the impact of the COVID-19 pandemic and our restructuring activities on our internal ~~controls as processes and procedures in each of the affected areas evolve. For a discussion of risks related to the implementation of new systems, see~~controls. See Item 1A — "Risk ~~Factors~~ — ~~Risks and uncertainties~~Factors" in the Fiscal 2020 10-K for additional discussion regarding risks to our business associated with the ~~implementation of information systems may negatively impact~~COVID-19 pandemic and our ~~business" in the Fiscal 2017 10-K.~~restructuring plans.


			70

PART II. OTHER INFORMATION


~~Item 1.~~	~~Legal Proceedings.~~

Item 1. Legal Proceedings.

Reference is made to the information disclosed under Item 3 — "Legal Proceedings" in the Fiscal ~~2017~~2020 10-K.


~~Item 1A.~~	~~Risk Factors.~~

Item 1A. Risk Factors.

Reference is made to the information disclosed under Part I, Item 1A — "Risk Factors" in the Fiscal ~~2017~~2020 10-K, which contains a detailed discussion of certain risk factors that could materially adversely affect the Company's business, operating results, and/or financial condition. ~~The following information amends, updates, and should be read in conjunction with~~There are no material changes to the risk factors ~~and information~~previously disclosed, innor has the ~~Fiscal 2017 10-K.~~

~~The impact to our~~Company identified any previously undisclosed risks that could materially adversely affect the Company's business, ~~of recently enacted U.S. tax legislation could differ materially from our current estimates.~~

~~Although we expect the TCJA will ultimately benefit our~~operating results, of operations and financial condition in future periods, primarily due to it reducing the U.S. federal statutory income tax rate from 35% to 21%, its enactment resulted in the recognition of one-time charges of $231.3 million within our income tax provision during the third quarter of Fiscal 2018. These charges were recorded on a provisional basis, as permitted by SEC Staff Accounting Bulletin No. 118 ("SAB 118"), based on our present interpretations of the TCJA and current available information, including assumptions and expectations about future events, such as our projected financial performance. Although we believe these provisional amounts represent a reasonable estimate of the ultimate enactment-related impact the TCJA will have on our consolidated financial statements, the amounts could be adjusted materially as additional information becomes available (including our actual full Fiscal 2018 results of operations and financial condition, which were projected for purposes of calculating the provisional amounts) and further analyses are completed. The impact of the TCJA to our business in future periods is also subject to a variety of factors beyond our control including, but not limited to, (i) potential amendments to the TCJA; (ii) potential changes to state, local, and foreign tax laws in response to the TCJA; and (iii) potential new or interpretative guidance issued by the Financial Accounting Standards Board or the Internal Revenue Service and other tax agencies. Any of these factors could cause our actual results to differ materiality from our current expectations and/or ~~investors' expectations~~financial condition.

Item 2. Unregistered Sales of Equity Securities and ~~there can be no assurance that the TCJA will ultimately benefit our results~~Use of ~~operations and financial condition in future periods.~~Proceeds.



	65

~~For further discussion~~(a)Sales of ~~risks related to the potential imposition of additional regulations and laws and changes to our tax obligations and effective tax rate, refer to Part I, Item 1A — "Risk Factors — Our ability to conduct business globally may be affected by a variety of legal, regulatory, political, and economic risks" and "Risk Factors — Fluctuations in our tax obligations and effective tax rate may result in volatility of our operating results" in the Fiscal 2017 10-K.~~Unregistered Securities

~~See Note 9 to the accompanying consolidated financial statements for further discussion of the TCJA.~~


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds.~~


~~(a)~~	~~Sales of Unregistered Securities~~

Shares of the Company's Class B Common Stock may be converted immediately into Class A Common Stock on a one-for-one basis by the holder. There is no cash or other consideration paid by the holder converting the shares and, accordingly, there is no cash or other consideration received by the Company. The shares of Class A Common Stock issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended.

No shares of the Company's Class B common stock were converted into Class A common stock during the three months ended December ~~30, 2017.~~26, 2020.


~~(b)~~	~~Not Applicable~~


~~(c)~~	~~Stock Repurchases~~

(b) Not Applicable

(c)Stock Repurchases

The following table sets forth the repurchases of shares of the Company's Class A common stock during the three months ended December ~~30, 2017:~~26, 2020:

Total Number of Shares Purchased^(a)
Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs^(b)
(millions)
October 1, 2017 to October 28, 2017 11,257
$ 88.92
—
$ 100
October 29, 2017 to December 2, 2017 —
—
—
100
December 3, 2017 to December 30, 2017 3,238

101.38
—
100
14,495
—


	Total Number of Shares Purchased(a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs(b)
					(millions)
September 27, 2020 to October 24, 2020	6,513	$	71.26	—	$	580
October 25, 2020 to November 28, 2020	—	—		—	580
November 29, 2020 to December 26, 2020	—	—		—	580
	6,513			—


^(a)	~~Represents shares surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under its long-term stock incentive plans.~~


^(b)	~~Repurchases of shares of Class A common stock are subject to overall business and market conditions.~~

(a)Represents shares surrendered to or withheld by the Company in satisfaction of withholding taxes in connection with the vesting of awards issued under its long-term stock incentive plans.

(b)Repurchases of shares of Class A common stock are subject to certain restrictions under the Company's Global Credit Facility and more generally overall business and market conditions. Accordingly, as a result of current business disruptions related to the COVID-19 pandemic, we have temporarily suspended our common stock repurchase program as a preemptive action to preserve cash and strengthen our liquidity position.



			6671

Item 5. Other Information.

As previously announced, the Company has begun efforts to realign its resources to support future growth and profitability, and to create a sustainable cost structure (the “Fiscal 2021 Strategic Realignment Plan”). The key areas of the Company's evaluation include its: (i) team organizational structures and ways of working; (ii) real estate footprint and related costs across corporate offices, distribution centers, and direct-to-consumer retail and wholesale doors; and (iii) brand portfolio.

Previously announced actions related to the Fiscal 2021 Strategic Realignment Plan included a reduction of the Company's global workforce by the end of its Fiscal 2021, transitioning the Chaps brand to a fully licensed business model, and closing the Company's Polo store on Regent Street in London.

On February 3, 2021, the Company’s Board of Directors approved additional realignment actions related to its real estate initiative. Specifically, the Company plans to further rightsize and consolidate its global corporate offices to better align with its current organizational profile and new ways of working. The Company also expects to close certain of its stores to improve overall profitability. Additionally, the Company plans to complete the consolidation of its existing North America distribution centers in order to drive greater efficiencies, improve sustainability, and deliver a better consumer experience.

In connection with these collective realignment initiatives, including previously announced actions, the Company now expects to incur total estimated pre-tax charges of approximately $300 million to $350 million, comprised of cash-related restructuring charges of approximately $185 million to $200 million and non-cash charges of approximately $115 million and $150 million. When substantially completed by the end of the Company’s Fiscal 2022, these actions are expected to result in gross annualized pre-tax expense savings of approximately $200 million to $240 million, a portion of which will be reinvested back into the business.

In addition to these actions, the Company expects to execute additional restructuring-related actions associated with its aforementioned initiatives in order to further support future growth and profitability.


~~Item 6.~~			~~Exhibits.~~72

Item 6. Exhibits.



3.1			Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company's Registration Statement on Form S-1/A (File No. 333-24733) filed June 10, 1997).
3.2			Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Form 8-K filed August 16, 2011).
3.3			Fourth Amended and Restated By-Laws of the Company (filed as Exhibit 3.3 to the Form 10-Q filed on August 10, 2017).
12.1*10.1			~~Computation~~Form of ~~Ratio of Earnings~~Cliff Restricted Stock Award Agreement under the 2019 Long-Term Stock Incentive (filed as Exhibit 10.2 to ~~Fixed Charges.~~the Form 10-Q for the quarterly period ended September 26, 2020)†.
31.1*10.2			Form of Pro-Rata Restricted Stock Unit Award Agreement under the 2019 Long-Term Stock Incentive Plan (filed as Exhibit 10.3 to the Form 10-Q for the quarterly period ended September 26, 2020)†.
31.1*			Certification of Principal Executive Officer pursuant to 17 CFR 240.13a-14(a).
31.2*			Certification of Principal Financial Officer pursuant to 17 CFR 240.13a-14(a).
32.1*			Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*			Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101101.INS			XBRL Instance Document - the instance document does not appear in the Interactive ~~data files pursuant to Rule 405 of Regulation S-T: (i)~~Data File because its XBRL tags are embedded within the Consolidated Balance Sheets at December 30, 2017 and April 1, 2017, (ii) the Consolidated Statements of Operations for the three-month and nine-month periods ended December 30, 2017 and December 31, 2016, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the three-month and nine-month periods ended December 30, 2017 and December 31, 2016, (iv) the Consolidated Statements of Cash Flows for the nine-month periods ended December 30, 2017 and December 31, 2016, and (v) the Notes to the Consolidated Financial Statements.Inline XBRL document.
101.SCH*			XBRL Taxonomy Extension Schema Document.
101.CAL*			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*			XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*			XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibits 32.1 and 32.2 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.


*			Filed herewith.
†			Management contract or compensatory plan or arrangement.

* ~~Filed herewith.~~



			6773

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				RALPH LAUREN CORPORATION

			By:		~~RALPH LAUREN CORPORATION~~

	~~By:~~	/S/ JANE HAMILTON NIELSEN
				Jane Hamilton Nielsen
				Chief Operating Officer and Chief Financial Officer
				(Principal Financial and Accounting Officer)

Date: February ~~8, 2018~~4, 2021



			6874



Delaware		13-2622036
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
650 Madison Avenue,		10022
New York,	New York	~~10022~~ (Zip Code)
(Address of principal executive offices)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Class A Common Stock, $.01 par value	RL	New York Stock Exchange



Large accelerated filer	þ☑	Accelerated filer	o☐
Non-accelerated filer	o ~~(Do not check if a smaller reporting company)~~ ☐	Smaller reporting company	o☐
		Emerging growth company	o☐



þ☑		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	~~For the quarterly period ended December 30, 2017~~



o ☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Severance and Benefit Costs			Lease Termination and Store Closure Costs			Other Cash Charges			Total
	(millions)
Balance at April 1, 2017	$	94.3		$	34.3		$	6.6		$	135.2
Additions charged to expense	25.3			28.5			9.2			63.0
Cash payments charged against reserve	(74.7		)	(18.0		)	(9.0		)	(101.7		)
Non-cash adjustments	0.6			7.8			—			8.4
Balance at December 30, 2017	$	45.5		$	52.6		$	6.8		$	104.9



	December 31, 2016
	Three Months Ended		Nine Months Ended		Cumulative Charges
	(millions)
Cash-related restructuring charges:
Severance and benefit costs	$	—	$	4.7	$	69.1
Lease termination and store closure costs	—		0.2		8.0
Other cash charges	—		—		13.8
Total cash-related restructuring charges	—		4.9		90.9
Non-cash charges:
Impairment of assets	—		—		27.2
Inventory-related charges^(a)	—		—		20.4
Accelerated stock-based compensation expense^(b)	—		—		8.9
Total non-cash charges	—		—		56.5
Total charges	$	—	$	4.9	$	147.4



	December 30, 2017				April 1, 2017
	Carrying Value^(a)		Fair Value^(b)		Carrying Value^(a)		Fair Value^(b)
	(millions)
$300 million 2.125% Senior Notes	$	298.3	$	300.2	$	298.1	$	302.2
$300 million 2.625% Senior Notes	290.3		302.2		290.1		302.8



	Mandatory Transition Tax Payments^(a)
	(millions)
Fiscal 2019	$	27.3
Fiscal 2020	14.0
Fiscal 2021	14.0
Fiscal 2022	14.0
Fiscal 2023	23.2
Fiscal 2024 and thereafter	85.5
Total mandatory transition tax payments	$	178.0



	Number of Shares
	Restricted Stock	Service-based RSUs
	(thousands)
Nonvested at April 1, 2017	19	922
Granted	—	695
Vested	—	(325	)
Forfeited	—	(140	)
Nonvested at December 30, 2017	19	1,152



	Number of Shares
	Performance-based RSUs — without TSR Modifier		Performance-based RSUs — with TSR Modifier
	(thousands)
Nonvested at April 1, 2017	788		61
Granted	585		—
Change due to performance/market condition achievement	(12	)	(21	)
Vested	(149	)	(40	)
Forfeited	(28	)	—
Nonvested at December 30, 2017	1,184		—


^(a)	~~Includes total depreciation expense of $66.7 million and $71.9 million for the three-month periods ended December 30, 2017 and December 31, 2016, respectively.~~


^(b)	~~Effective tax rate is calculated by dividing the income tax provision by income before income taxes.~~



	As Reported		Constant Currency
E-commerce comparable store sales	(19	%)	(20	%)
Comparable store sales excluding e-commerce	(1	%)	(3	%)
Total comparable store sales	(5	%)	(6	%)


	% Change
Digital commerce comparable store sales	17	%
Comparable store sales excluding digital commerce	(29	%)
Total comparable store sales	(21	%)


	Three Months Ended				$ Change		Foreign Exchange Impact		$ Change		% Change
	December 26, 2020		December 28, 2019		As Reported				Constant Currency		As Reported		Constant Currency
	(millions)
Net Revenues:
North America	$	715.4	$	910.6	$	(195.2)	$	0.1	$	(195.3)	(21.4	%)	(21.5	%)
Europe	315.6		437.8		(122.2)		16.2		(138.4)		(27.9	%)	(31.6	%)
Asia	329.6		289.6		40.0		14.5		25.5		13.8	%	8.8	%
Other non-reportable segments	72.2		112.7		(40.5)		—		(40.5)		(36.0	%)	(36.0	%)
Total net revenues	$	1,432.8	$	1,750.7	$	(317.9)	$	30.8	$	(348.7)	(18.2	%)	(19.9	%)


^(a)	Comparable store sales ~~for our Asia segment were comprised primarily of~~excluding digital commerce	1		%
Total comparable store sales ~~made through our stores and concession shops.~~			3		%



	Three Months Ended December 30, 2017 Compared to Three Months Ended December 31, 2016
	(millions)
SG&A expense category:
Marketing and advertising expenses	$	13.2
Compensation-related expenses	9.2
Depreciation expense	(8.7		)
Shipping and handling costs	(5.5		)
Selling-related expenses	(3.3		)
Other	(3.0		)
Total change in SG&A expenses	$	1.9


		Three Months Ended December 26, 2020 Compared to Three Months Ended December 28, 2019
	50	(millions)
SG&A expense category:
Compensation-related expenses		$	(44.2)
Staff-related expenses		(16.8)
Rent and occupancy costs		(14.5)
Selling-related expenses		(9.8)
Consulting fees		(9.4)
Depreciation and amortization expense		(7.9)
Bad debt expense		4.7
Other		2.1
Total decrease in SG&A expenses		$	(95.8)



	Nine Months Ended December 30, 2017 Compared to Nine Months Ended December 31, 2016
	(millions)
SG&A expense category:
Compensation-related expenses^(a)	$	(40.3	)
Depreciation expense	(22.7		)
Shipping and handling costs	(16.3		)
Rent and occupancy expenses	(16.2		)
Consulting fees	(11.6		)
Marketing and advertising expenses	(9.9		)
Selling-related expenses	(9.1		)
Other	(14.9		)
Total change in SG&A expenses	$	(141.0	)


	Nine Months Ended December 26, 2020 Compared to Nine Months Ended December 28, 2019
	(millions)
SG&A expense category:
Compensation-related expenses	$	(221.6)
Rent and occupancy costs	(75.9)
Staff-related expenses	(52.1)
Selling-related expenses	(45.1)
Marketing and advertising expenses	(42.7)
Bad debt expense	(22.2)
Depreciation and amortization expense	(15.5)
Consulting fees	(14.6)
Other	(12.3)
Total decrease in SG&A expenses	$	(502.0)


^(a)			~~Includes the favorable impact of $7.6 million related to Mr. Ralph Lauren electing to forgo his Fiscal 2017 executive incentive bonus.~~61



	December 30, 2017			April 1, 2017			$ Change
	(millions)
Cash and cash equivalents	$	1,175.7		$	668.3		$	507.4
Short-term investments	862.3			684.7			177.6
Non-current investments^(a)	83.3			21.4			61.9
Current portion of long-term debt^(b)	(298.3		)	—			(298.3		)
Long-term debt^(b)	(290.3		)	(588.2		)	297.9
Net cash and investments^(c)	$	1,532.7		$	786.2		$	746.5
Equity	$	3,407.5		$	3,299.6		$	107.9


^(a)	~~Recorded within other non-current assets in our consolidated balance sheets.~~


^(b)	~~See Note 10 to the accompanying consolidated financial statements for discussion of the carrying value of our debt.~~


^(c)	~~"Net cash and investments" is defined as cash and cash equivalents, plus short-term and non-current investments, less total debt.~~



	December 30, 2017
Description^(a)	Total Availability		Borrowings Outstanding			Remaining Availability
	(millions)
Global Credit Facility and Commercial Paper Program^(b)	$	500	$	9	^(c)	$	491
Pan-Asia Credit Facilities	51		—			51



	Total Number of Shares Purchased^(a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs^(b)
					(millions)
October 1, 2017 to October 28, 2017	11,257	$	88.92	—	$	100
October 29, 2017 to December 2, 2017	—	—		—	100
December 3, 2017 to December 30, 2017	3,238	101.38		—	100
	14,495			—

As
Reported

Constant
Currency

Total comparable store sales^(a)