UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
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
orFor the quarterly period ended December 25, 2021
or
o

☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-13057
Ralph Lauren Corporation
(Exact name of registrant as specified in its charter)
Delaware13-2622036
(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)
(212) 318-7000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on which Registered
Class A Common Stock, $.01 par valueRLNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ ☑No o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ ☑No o☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerþ☑Accelerated filero☐
Non-accelerated filer
o (Do not check if a smaller reporting company)
☐		Smaller reporting companyo☐
Emerging growth companyo☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      o☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o . Yes ☐No þ☑
At February 2, 2018, 55,408,452January 28, 2022, 46,286,005 shares of the registrant's Class A common stock, $.01 par value, and 25,881,27624,881,276 shares of the registrant's Class B common stock, $.01 par value, were outstanding.



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.
39
Item 3.
6467
Item 4.
6467
PART II. OTHER INFORMATION
Item 1.
6568
Item 1A.    
6568
Item 2.
6668
Item 6.
6769
6870
EX-12.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101INSTANCE DOCUMENT
EX-101SCHEMA DOCUMENT
EX-101CALCULATION LINKBASE DOCUMENT
EX-101LABELS LINKBASE DOCUMENT
EX-101PRESENTATION LINKBASE DOCUMENT
EX-101DEFINITION LINKBASE DOCUMENT



21


RALPH LAUREN CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 December 30,
2017		 April 1,
2017		December 25,
2021		March 27,
2021
 
(millions)
(unaudited)
(millions)
ASSETSASSETSASSETS
Current assets:    Current assets:
Cash and cash equivalents $1,175.7
 $668.3
Cash and cash equivalents$2,276.8 $2,579.0 
Short-term investments 862.3
 684.7
Short-term investments710.2 197.5 
Accounts receivable, net of allowances of $218.6 million and $214.4 million 295.2
 450.2
Accounts receivable, net of allowances of $210.5 million and $213.8 millionAccounts receivable, net of allowances of $210.5 million and $213.8 million410.7 451.5 
Inventories 825.4
 791.5
Inventories929.1 759.0 
Income tax receivable 69.8
 79.4
Income tax receivable48.0 54.4 
Prepaid expenses and other current assets 304.8
 280.4
Prepaid expenses and other current assets192.5 166.6 
Total current assets 3,533.2
 2,954.5
Total current assets
4,567.3 4,208.0 
Property and equipment, net 1,215.9
 1,316.0
Property and equipment, net965.4 1,014.0 
Operating lease right-of-use assetsOperating lease right-of-use assets1,131.6 1,239.5 
Deferred tax assets 133.1
 125.9
Deferred tax assets339.6 283.9 
Goodwill 935.0
 904.6
Goodwill920.0 934.6 
Intangible assets, net 201.5
 219.8
Intangible assets, net107.6 121.1 
Other non-current assets 180.3
 131.2
Other non-current assets104.1 86.4 
Total assets $6,199.0
 $5,652.0
Total assets
$8,135.6 $7,887.5 
LIABILITIES AND EQUITYLIABILITIES AND EQUITYLIABILITIES AND EQUITY
Current liabilities:    Current liabilities:
Current portion of long-term debt $298.3
 $—
Current portion of long-term debt$499.4 $— 
Accounts payable 184.3
 147.7
Accounts payable472.8 355.9 
Income tax payable 138.5
 29.5
Current income tax payableCurrent income tax payable119.8 50.6 
Current operating lease liabilitiesCurrent operating lease liabilities264.0 302.9 
Accrued expenses and other current liabilities 1,089.1
 982.7
Accrued expenses and other current liabilities1,073.6 875.4 
Total current liabilities 1,710.2
 1,159.9
Total current liabilities
2,429.6 1,584.8 
Long-term debt 290.3
 588.2
Long-term debt1,136.0 1,632.9 
Income tax payable 150.8
 —
Long-term operating lease liabilitiesLong-term operating lease liabilities1,168.8 1,294.5 
Non-current income tax payableNon-current income tax payable104.8 118.7 
Non-current liability for unrecognized tax benefits 76.4
 62.7
Non-current liability for unrecognized tax benefits75.1 91.4 
Other non-current liabilities 563.8
 541.6
Other non-current liabilities498.4 560.8 
Commitments and contingencies (Note 13) 
 
Commitments and contingencies (Note 13)00
Total liabilities 2,791.5
 2,352.4
Total liabilities
5,412.7 5,283.1 
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; 106.9 million and 106.1 million shares issued; 46.3 million and 48.3 million shares outstandingClass A common stock, par value $.01 per share; 106.9 million and 106.1 million shares issued; 46.3 million and 48.3 million shares outstanding1.0 1.0 
Class B common stock, par value $.01 per share; 24.9 million shares issued and outstandingClass B common stock, par value $.01 per share; 24.9 million shares issued and outstanding0.3 0.3 
Additional paid-in-capital 2,365.1
 2,308.8
Additional paid-in-capital2,729.7 2,667.1 
Retained earnings 5,751.5
 5,751.9
Retained earnings6,298.6 5,872.9 
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; 60.6 million and 57.8 million sharesTreasury stock, Class A, at cost; 60.6 million and 57.8 million shares(6,156.5)(5,816.1)
Accumulated other comprehensive loss (130.6) (198.4)Accumulated other comprehensive loss(150.2)(120.8)
Total equity 3,407.5
 3,299.6
Total equity
2,722.9 2,604.4 
Total liabilities and equity $6,199.0
 $5,652.0
Total liabilities and equity
$8,135.6 $7,887.5 
See accompanying notes.

32


RALPH LAUREN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 
(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
$1,815.4 $1,432.8 $4,695.8 $3,113.8 
Cost of goods sold(a)
 (645.6) (731.4) (1,809.9) (2,255.4)
Cost of goods soldCost of goods sold(617.3)(502.4)(1,514.4)(1,035.3)
Gross profit 996.2
 983.2
 2,843.2
 2,832.0
Gross profit
1,198.1 930.4 3,181.4 2,078.5 
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 expensesSelling, general, and administrative expenses(908.8)(747.5)(2,391.9)(1,883.3)
Impairment of assets (3.9) (10.3) (24.8) (56.7)Impairment of assets— (2.6)(19.3)(35.7)
Restructuring and other charges(a)
 (23.3) (66.7) (78.7) (193.9)
Restructuring and other charges, netRestructuring and other charges, net(0.2)(9.9)(8.6)(177.4)
Total other operating expenses, net (807.0) (854.9) (2,370.4) (2,658.6)
Total other operating expenses, net
(909.0)(760.0)(2,419.8)(2,096.4)
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)
289.1 170.4 761.6 (17.9)
Interest expense (4.8) (3.6) (14.4) (11.1)Interest expense(13.4)(12.2)(40.3)(34.6)
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
Interest incomeInterest income1.4 2.4 4.4 7.5 
Other income (expense), netOther income (expense), net0.1 1.6 (0.4)5.5 
Income (loss) before income taxes
Income (loss) before income taxes
277.2 162.2 725.3 (39.5)
Income tax provision (268.1) (41.8) (342.8) (58.9)Income tax provision(59.5)(42.4)(149.6)(7.5)
Net income (loss) $(81.8) $81.3
 $121.5
 $104.7
Net income (loss)
$217.7 $119.8 $575.7 $(47.0)
Net income (loss) per common share:        Net income (loss) per common share:
Basic $(1.00) $0.98
 $1.49
 $1.26
Basic$2.98 $1.63 $7.82 $(0.64)
Diluted $(1.00) $0.98
 $1.47
 $1.25
Diluted$2.93 $1.61 $7.68 $(0.64)
Weighted average common shares outstanding:        Weighted average common shares outstanding:
Basic 81.7
 82.6
 81.7
 82.9
Basic73.2 73.6 73.7 73.4 
Diluted 81.7
 83.3
 82.5
 83.6
Diluted74.3 74.6 75.0 73.4 
Dividends declared per share $0.50
 $0.50
 $1.50
 $1.50
Dividends declared per share$0.6875 $— $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 EndedThree Months EndedNine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 
(millions)
(unaudited)
(millions)
Net income (loss) $(81.8) $81.3
 $121.5
 $104.7
Net income (loss)
$217.7 $119.8 $575.7 $(47.0)
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)(30.6)15.7 (29.8)46.0 
Net gains (losses) on cash flow hedges 2.3
 45.0
 (22.0) 43.2
Net gains (losses) on cash flow hedges0.3 (6.5)0.4 (17.8)
Net gains (losses) on defined benefit plans (0.5) 1.1
 (0.9) 2.0
Net gains (losses) on defined benefit plans0.1 (0.3)— (0.6)
Other comprehensive income (loss), net of tax 4.8
 (42.7) 67.8
 (41.5)
Other comprehensive income (loss), net of tax
(30.2)8.9 (29.4)27.6 
Total comprehensive income (loss) $(77.0) $38.6
 $189.3
 $63.2
Total comprehensive income (loss)
$187.5 $128.7 $546.3 $(19.4)
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 25,
2021		December 26,
2020
 
(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)$575.7 $(47.0)
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 expense169.3 185.5 
Deferred income tax expense (benefit) (8.0) 9.8
Equity in losses of equity-method investees 3.6
 5.2
Deferred income tax benefitDeferred income tax benefit(1.8)(101.8)
Non-cash stock-based compensation expense 56.3
 46.4
Non-cash stock-based compensation expense62.6 54.4 
Non-cash impairment of assets 24.8
 56.7
Non-cash impairment of assets19.3 35.7 
Non-cash restructuring-related inventory charges 1.3
 149.4
Other non-cash charges 6.7
 18.1
Bad debt expense reversalsBad debt expense reversals(2.7)(20.3)
Other non-cash charges (benefits)Other non-cash charges (benefits)5.1 (2.7)
Changes in operating assets and liabilities:    Changes in operating assets and liabilities:
Accounts receivable 158.9
 214.9
Accounts receivable31.7 (67.3)
Inventories (11.6) (36.5)Inventories(211.6)(92.0)
Prepaid expenses and other current assets (4.2) (72.8)Prepaid expenses and other current assets(37.8)(0.2)
Accounts payable and accrued liabilities 105.0
 98.4
Accounts payable and accrued liabilities296.1 351.7 
Income tax receivables and payables 279.7
 (2.6)Income tax receivables and payables(11.0)39.8 
Deferred income 3.8
 (15.5)
Operating lease right-of-use assets and liabilities, netOperating lease right-of-use assets and liabilities, net(42.2)(21.6)
Other balance sheet changes (6.1) 42.6
Other balance sheet changes(31.0)20.4 
Net cash provided by operating activities 951.1
 850.7
Net cash provided by operating activities
821.7 334.6 
Cash flows from investing activities:    Cash flows from investing activities:
Capital expenditures (123.0) (225.5)Capital expenditures(113.6)(80.8)
Purchases of investments (985.5) (460.5)Purchases of investments(1,234.8)(512.3)
Proceeds from sales and maturities of investments 795.3
 704.8
Proceeds from sales and maturities of investments714.7 848.0 
Acquisitions and ventures (4.6) (2.5)
Settlement of net investment hedgesSettlement of net investment hedges— 3.7 
Other investing activitiesOther investing activities(2.1)(2.0)
Net cash provided by (used in) investing activities (317.8) 16.3
Net cash provided by (used in) investing activities
(635.8)256.6 
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 credit facility borrowingsRepayments of credit facility borrowings— (475.0)
Proceeds from the issuance of long-term debtProceeds from the issuance of long-term debt— 1,241.9 
Repayments of long-term debtRepayments of long-term debt— (300.0)
Payments of finance lease obligationsPayments of finance lease obligations(16.8)(8.6)
Payments of dividends (121.7) (123.7)Payments of dividends(101.1)(49.8)
Repurchases of common stock, including shares surrendered for tax withholdings (15.9) (115.0)Repurchases of common stock, including shares surrendered for tax withholdings(340.4)(36.1)
Proceeds from exercise of stock options 0.1
 4.7
Net cash used in financing activities (158.7) (369.5)
Other financing activitiesOther financing activities— (8.7)
Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities
(458.3)363.7 
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(30.2)46.8 
Net increase in cash, cash equivalents, and restricted cash 511.4
 468.5
Net increase (decrease) in cash, cash equivalents, and restricted cashNet increase (decrease) in cash, cash equivalents, and restricted cash(302.6)1,001.7 
Cash, cash equivalents, and restricted cash at beginning of period 711.8
 502.1
Cash, cash equivalents, and restricted cash at beginning of period2,588.0 1,629.8 
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$2,285.4 $2,631.5 
See accompanying notes.

5

RALPH LAUREN CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
Three Months Ended December 25, 2021
Common Stock(a)
Additional
Paid-in
Capital		Treasury Stock
at Cost
Retained
Earnings		Total
Equity
SharesAmountSharesAmount
AOCI(b)
(millions)
Balance at September 25, 2021
131.8 $1.3 $2,707.7 $6,129.8 58.1 $(5,856.0)$(120.0)$2,862.8 
Comprehensive income:
Net income217.7 
Other comprehensive loss(30.2)
Total comprehensive income187.5 
Dividends declared(48.9)(48.9)
Repurchases of common stock2.5 (300.5)(300.5)
Stock-based compensation22.0 22.0 
Shares issued pursuant to stock-based
compensation plans
— — — — 
Balance at December 25, 2021
131.8 $1.3 $2,729.7 $6,298.6 60.6 $(6,156.5)$(150.2)$2,722.9 
Three Months Ended December 26, 2020
Common Stock(a)
Additional
Paid-in
Capital		Treasury Stock
at Cost
Retained
Earnings		Total
Equity
SharesAmountSharesAmount
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 income119.8 
Other comprehensive income8.9 
Total comprehensive income128.7 
Dividends declared— — 
Repurchases of common stock— (0.6)(0.6)
Stock-based compensation19.8 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 
(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 25, 2021
Common Stock(a)
Additional
Paid-in
Capital		Treasury Stock
at Cost
Retained
Earnings		Total
Equity
SharesAmountSharesAmount
AOCI(b)
(millions)
Balance at March 27, 2021
131.0 $1.3 $2,667.1 $5,872.9 57.8 $(5,816.1)$(120.8)$2,604.4 
Comprehensive income:
Net income575.7 
Other comprehensive loss(29.4)
Total comprehensive income546.3 
Dividends declared(150.0)(150.0)
Repurchases of common stock2.8 (340.4)(340.4)
Stock-based compensation62.6 62.6 
Shares issued pursuant to stock-based compensation plans0.8 — — — 
Balance at December 25, 2021
131.8 $1.3 $2,729.7 $6,298.6 60.6 $(6,156.5)$(150.2)$2,722.9 
Nine Months Ended December 26, 2020
Common Stock(a)
Additional
Paid-in
Capital		Treasury Stock
at Cost
Retained
Earnings		Total
Equity
SharesAmountSharesAmount
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 income27.6 
Total comprehensive loss(19.4)
Dividends declared— — 
Repurchases of common stock0.5 (36.1)(36.1)
Stock-based compensation54.4 54.4 
Shares issued pursuant to stock-based compensation plans1.1 — — — 
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 
(a)Includes Class A and Class B common stock.
(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 numbera wide range of products, brands, salesdistribution 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,Chaps, 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 channelschannel 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-commercedigital 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 useaccess 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 three3 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, 2017March 27, 2021 (the "Fiscal 20172021 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.
Additionally, as discussed in Note 8, the Company completed the sale of its Club Monaco business at the end of its first quarter of Fiscal 2022 (as defined below) on June 26, 2021. As a result, assets and liabilities related to the Club Monaco business were deconsolidated from the Company's consolidated statement of financial position effective June 26, 2021, with Club Monaco's operating results included in the Company's consolidated statements of income (loss), comprehensive income (loss), and cash flows through the end of the first quarter of Fiscal 2022. Prior year financial statements were not affected.
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 toimmediately before or after March 31. As such, fiscal year 20182022 will end on March 31, 2018April 2, 2022 and will be a 52-week53-week period ("Fiscal 2018"2022"). Fiscal year 20172021 ended on April 1, 2017March 27, 2021 and was also a 52-week period ("Fiscal 2017"2021"). The third quarter of Fiscal 20182022 ended on December 30, 201725, 2021 and was a 13-week period. The third quarter of Fiscal 20172021 ended on December 31, 201626, 2020 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; and reserves for restructuring activity; and accounting for business combinations,activity, among others.
Reclassifications
Certain reclassifications have been made to the prior period'speriod 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 ourits 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 pandemic diseases 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, 201725, 2021 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal 2018.2022.
COVID-19 Pandemic
Beginning in the fourth quarter of the Company's fiscal year ended March 28, 2020 ("Fiscal 2020"), a novel strain of coronavirus commonly referred to as COVID-19 emerged and spread rapidly across the globe, including throughout all major geographies in which the Company operates, resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Since then, governments worldwide have periodically 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, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances during the pandemic, including work furloughs, reduced pay, and severance actions, which could lower consumers' disposable income levels or willingness to purchase discretionary items. Such government restrictions, company initiatives, and other macroeconomic impacts resulting from the pandemic could continue to adversely affect consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in indoor shopping centers or other populated locations.
As a result of 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 at the peak of the pandemic, 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
3.Summary of Significant Accounting Policies9

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
other restrictions, resulting in significant adverse impacts to its operating results. Resurgences and outbreaks in certain parts of the world resulted in further business disruptions periodically throughout Fiscal 2021, most notably in Europe where a significant number of the Company's stores were closed for approximately two to three months during the second half of Fiscal 2021, including during the holiday period, due to government-mandated lockdowns and other restrictions. Such disruptions continued throughout Fiscal 2022 in certain regions, although to a lesser extent than the comparable prior year fiscal period. Further, throughout the course of the pandemic, the majority of the Company's stores that were able to remain open have periodically been subject to limited operating hours and/or customer capacity levels in accordance with local health guidelines, with traffic remaining challenged. However, the Company's digital commerce operations have grown significantly from pre-pandemic levels, due in part to our investments and enhanced capabilities, as well as changes in consumer shopping preferences. The Company's wholesale and licensing businesses have experienced similar impacts, particularly in North America and Europe.
Throughout the course of the pandemic, the Company's priority has been to ensure the safety and well-being of its employees, customers, and the communities in which it operates around the world. The Company continues to consider 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 also took various preemptive actions in the prior fiscal year to preserve cash and strengthen its liquidity position, as described in the Fiscal 2021 10-K.
Despite the introduction of COVID-19 vaccines and recent improvements in the global economy as a whole, the pandemic remains volatile and continues to evolve, including the emergence of variants of the virus, such as the Delta variant and, most recently, the Omicron variant, which could adversely affect consumer sentiment and confidence. Accordingly, the Company cannot predict for how long and to what extent the pandemic will impact its business operations or the overall global economy. The Company will continue to assess its operations location-by-location, considering the guidance of local governments and global health organizations.
3.    Summary of Significant Accounting Policies
Revenue Recognition
Revenue is recognizedThe Company recognizes revenue across all segmentschannels of the business when thereit 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 ofsubject 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.
Revenue withinfrom 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 own retail stores and shop-within-shop locations, 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 purchased by customers are recorded as a liability until they are redeemed for products sold by the Company's retail business, 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 timewhich 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
10

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 costsamounts have not differed materially from actual results.
Retail store and concession-based shop-within-shop revenueRevenue from the Company's licensing arrangements is recognized netover 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 own sales of estimated returns at thelicensed 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 arereceipt, may be recorded as a liability until they are redeemed, at which point revenue is recognized.recognized as revenue. The Company recognizes incomerevenue for unredeemed gift cards whensales-based royalty arrangements (including those for which the likelihoodroyalty 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 remoteprogress 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 doesis entitled to receive in exchange for providing access to its trademarks. As of December 25, 2021, 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 2022$16.2 
Fiscal 202396.9 
Fiscal 202467.2 
Fiscal 202533.2 
Fiscal 202616.4 
Fiscal 2027 and thereafter26.7 
Total$256.6 
(a)Amounts presented do not have a legal obligation to remit the valuecontemplate potential contract renewals or royalties earned in excess of the unredeemed gift card tocontractually-guaranteed minimums.
Disaggregated Net Revenues
The following tables disaggregate the relevant jurisdiction as unclaimed or abandoned property.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 fiscal periods presented:

Three Months Ended
December 25, 2021December 26, 2020
North AmericaEuropeAsiaOtherTotalNorth AmericaEuropeAsiaOtherTotal
(millions)
Sales Channel(a):
Retail$638.4 $246.4 $364.2 $— $1,249.0 $453.0 $165.9 $313.7 $30.0 $962.6 
Wholesale290.3 216.5 18.4 0.2 525.4 262.4 149.7 15.9 5.4 433.4 
Licensing— — — 41.0 41.0 — — — 36.8 36.8 
Total$928.7 $462.9 $382.6 $41.2 $1,815.4 $715.4 $315.6 $329.6 $72.2 $1,432.8 
811


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Nine Months Ended
December 25, 2021December 26, 2020
North AmericaEuropeAsiaOtherTotalNorth AmericaEuropeAsiaOtherTotal
(millions)
Sales Channel(a):
Retail$1,472.5 $646.7 $885.4 $27.2 $3,031.8 $910.3 $419.3 $699.5 $57.6 $2,086.7 
Wholesale821.4 666.6 55.3 5.5 1,548.8 513.1 376.5 38.6 8.2 936.4 
Licensing— — — 115.2 115.2 — — — 90.7 90.7 
Total$2,293.9 $1,313.3 $940.7 $147.9 $4,695.8 $1,423.4 $795.8 $738.1 $156.5 $3,113.8 
Revenue from licensing arrangements is recognized when earned in accordance with the terms of 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
(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 generally consists of unredeemed gift cards (net of breakage) and advance royalty payments from licensees. The Company accounts for sales taxesCompany's deferred income balances were $15.4 million and $12.1 million as of December 25, 2021 and March 27, 2021, respectively, and were primarily recorded within accrued expenses and other related taxes on a net basis, excluding such taxes from revenue.current liabilities within the consolidated balance sheets. The majority of the deferred income balance as of December 25, 2021 is expected to be recognized as revenue within the next twelve months.
Shipping and Handling Costs
The costsCosts associated with shipping goods to 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 costsCosts 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.
A summary of shipping and handling costs recognized duringfor the three-month and nine-monthfiscal periods ended December 30, 2017 and December 31, 2016presented is as follows:
 Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions) (millions)
Shipping costs $11.7
 $12.8
 $28.4
 $32.2
Shipping costs$24.1 $18.3 $52.9 $38.9 
Handling costs 39.7
 44.1
 115.3
 127.8
Handling costs43.4 38.9 113.6 98.7 
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 infor the periods in which such effects are dilutive.
12

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Basic shares73.2 73.6 73.7 73.4 
Dilutive effect of RSUs and stock options1.1 1.0 1.3 — (a)
Diluted shares74.3 74.6 75.0 73.4 
  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 given the net loss incurred during that fiscal year period.
(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 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, theThe 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. 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 such common stock during the reporting period are anti-dilutive and therefore not included in the computation of diluted net income (loss) per common share. As of December 30, 201725, 2021 and December 31, 2016,26, 2020, there were 2.00.4 million and

9

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.2 0.7 million,, respectively, of additional shares issuable contingent upon vesting of performance-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 certain defined credit criteria. Payment is generally due within 30 to 120 days and does not involve a significant financing component. Accounts receivable isare recorded at carrying value,amortized cost, which approximates fair value, and isare 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.
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:as follows:
 Three Months Ended Nine Months Ended Three Months EndedNine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions) (millions)
Beginning reserve balance $231.5
 $228.9
 $202.8
 $239.7
Beginning reserve balance$184.8 $171.9 $173.7 $204.7 
Amount charged against revenue to increase reserve 125.3
 151.8
 418.6
 479.6
Amount charged against revenue to increase reserve101.1 86.0 289.8 169.9 
Amount credited against customer accounts to decrease reserve (155.6) (171.8) (427.8) (511.1)Amount credited against customer accounts to decrease reserve(106.0)(86.8)(283.2)(208.9)
Foreign currency translation 0.4
 (7.8) 8.0
 (7.1)Foreign currency translation(4.3)4.1 (4.7)9.5 
Ending reserve balance $201.6
 $201.1
 $201.6
 $201.1
Ending reserve balance$175.6 $175.2 $175.6 $175.2 
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.
13

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A rollforward of the activity in the Company's allowance for doubtful accounts is presented below:as follows:
  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 EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Beginning reserve balance$37.9 $46.3 $40.1 $71.5 
Amount recorded to expense to increase (decrease) reserve(a)
(1.8)5.1 (2.7)(20.3)
Amount written-off against customer accounts to decrease reserve(0.5)(3.5)(1.8)(5.1)
Foreign currency translation(0.7)1.1 (0.7)2.9 
Ending reserve balance$34.9 $49.0 $34.9 $49.0 
(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 andstores, 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 three3 key wholesale customers that generate significant sales volume. During Fiscal 2017,2021, 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%14% of total net revenues. Substantially all of the Company's sales to its three3 largest wholesale customers related to its North America segment. As of December 30, 2017,25, 2021, these three3 key wholesale customers constitutedaccounted for approximately 27%37% of the Company's total gross accounts receivable.
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 to be 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 comprisedconsist 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$929.1 million, $791.5$759.0 million, and $984.1$866.0 million as of December 30, 2017, April 1, 2017,25, 2021, March 27, 2021, and December 31, 2016,26, 2020, respectively.
Derivative Financial Instruments
The Company records all derivative financial instruments on its consolidated balance sheets at fair value. ForChanges in the fair value of derivative instruments that are designated and qualify for hedge accounting the effective portion of changes in their fair value isare 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 derivativeinstrument is being used to hedgehedging 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 reducingin 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 changeevaluate how changes in the fair value of the derivative instrument are expected to offset 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
14

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 thissuch counterparty credit risk, the Company has aCompany's policy ofis to only enteringenter 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.
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
The Company uses forward foreign currency exchange contracts to reducemitigate 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 operational balances.currency. To the extent forward foreign currency exchange contracts are designated as cash flow hedges, and are highly effective in offsetting changes in the value of the hedged items, the related gains or losses on such instruments are initially deferred in equity as a component of AOCI and are subsequently recognized within cost of goods sold in the consolidated statements of operations as follows:
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 thatIf a derivative instrument designated as a cash flowis 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 andany 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 OperationOperations
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, toadjustments. 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 effectivenessinitially recorded in AOCI as a translation adjustment and are recorded in the consolidated statement of operations with any other ineffectivenessamortized into earnings as interest expense. Amountsexpense 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 the extent that the change in the fair value of the hedged item does not offset the change in the fair value of the hedging instrument.
Undesignated Hedges
All of the Company'sThe Company uses undesignated hedges are entered intoprimarily 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 valuevalues of undesignated derivativesuch 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 20172021 10-K for a summary of all of the Company's significant accounting policies.

1215


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.4.    Recently Issued Accounting Standards
Targeted Improvements to Accounting for Hedging ActivitiesStandards
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 Improvements2020-04, "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 guidancecontract 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 ofglobal 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 updatedSecured Overnight Financing Rate ("SOFR"). The guidance reduces complexity in the accounting for certainASU 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 2017-12the 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
In November 2016,5.    Property and Equipment
Property and equipment, net consists of the FASB issued ASU No. 2016-18, "Restricted Cash"following:
December 25,
2021		March 27,
2021
 (millions)
Land and improvements$15.3 $15.3 
Buildings and improvements487.3 492.8 
Furniture and fixtures597.4 608.9 
Machinery and equipment391.6 391.8 
Capitalized software561.2 555.2 
Leasehold improvements1,167.3 1,207.2 
Construction in progress51.8 34.5 
3,271.9 3,305.7 
Less: accumulated depreciation(2,306.5)(2,291.7)
Property and equipment, net$965.4 $1,014.0 
Property and equipment, net includes finance lease right-of-use ("ASU 2016-18"ROU"). ASU 2016-18 requires that the statement of cash flows explain the change during the period 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 presentation within the statement of cash flows, the adoption of ASU 2016-18 did not have an impact on the Company's consolidated financial statements. See Note 18 for a reconciliation of cash, cash equivalents, and restricted cash from the consolidated balance sheets to the consolidated statements of cash flows.
Improvements to Employee Share-Based Payment Accounting
In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). ASU 2016-09 simplifies several aspects related to the accounting for and financial statement presentation of share-based payments, including the accounting for income taxes upon award settlement and forfeitures, and the classification of excess tax benefits and shares surrendered for tax withholdings in the statement of cash flows.
The Company adopted ASU 2016-09 during the first quarter of Fiscal 2018. Among its various provisions, ASU 2016-09 impacts the accounting for income taxes upon award settlement by requiring that all excess tax benefits and shortfalls be assets, which are reflected in 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, whichtable above based on their nature.
Depreciation expense was applied prospectively in the Company's consolidated financial statements, increased the Company's income tax provision by $0.5$51.8 million and $16.0$156.0 million forduring 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 events25, 2021, respectively, and other factors, including the timing of both employee stock option exercises$55.1 million 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$169.9 million during the first half of the Company's fiscal year due to the timing of annual stock-based compensation award vestingsthree-month and stock option expirations.
Additionally, ASU 2016-09 changes the classification of excess tax benefits presentednine-month periods ended December 26, 2020, respectively, and was recorded primarily within SG&A expenses 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.

operations.
1316


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6.    Other Assets and Liabilities
The remaining provisions of ASU 2016-09 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 rightsPrepaid expenses and fixed payment obligations under most leases be recognized as right-of-useother current 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 applicationconsist of the guidance at the beginningfollowing:
December 25,
2021		March 27,
2021
 (millions)
Non-trade receivables$48.6 $28.9 
Other taxes receivable25.7 28.4 
Inventory return asset14.1 8.3 
Prepaid advertising and marketing12.2 9.5 
Prepaid software maintenance12.1 12.9 
Tenant allowances receivable9.2 8.7 
Prepaid occupancy expense8.8 6.7 
Prepaid logistic services6.8 7.1 
Prepaid inventory5.4 5.0 
Cloud computing arrangement implementation costs4.3 8.2 
Derivative financial instruments3.3 5.6 
Other prepaid expenses and current assets42.0 37.3 
Total prepaid expenses and other current assets$192.5 $166.6 
Other non-current assets consist 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.following:
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.

December 25,
2021		March 27,
2021
 (millions)
Security deposits$31.3 $31.1 
Derivative financial instruments23.2 10.2 
Cloud computing arrangement implementation costs8.9 5.3 
Restricted cash7.1 7.5 
Deferred rent assets4.7 3.4 
Other non-current assets28.9 28.9 
Total other non-current assets$104.1 $86.4 
1417


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.Property and Equipment
Property and equipment, net consists of the following:
  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
PrepaidAccrued expenses and other current assetsliabilities consist of the following:
December 25,
2021		March 27,
2021
 (millions)
Accrued operating expenses$278.1 $225.0 
Accrued payroll and benefits266.2 223.6 
Accrued inventory265.6 196.1 
Other taxes payable93.5 64.6 
Dividends payable48.9 — 
Restructuring reserve40.8 99.8 
Accrued capital expenditures36.0 21.3 
Finance lease obligations20.0 19.7 
Deferred income15.3 12.0 
Other accrued expenses and current liabilities9.2 13.3 
Total accrued expenses and other current liabilities$1,073.6 $875.4 
  December 30,
2017		 April 1,
2017
  (millions)
Other taxes receivable $147.9
 $127.8
Prepaid rent expense 44.5
 37.4
Prepaid samples 14.0
 5.9
Restricted cash 13.4
 9.8
Prepaid advertising and marketing 10.4
 4.1
Prepaid software maintenance 7.4
 6.5
Tenant allowances receivable 6.9
 16.4
Derivative financial instruments 6.7
 23.0
Other prepaid expenses and current assets 53.6
 49.5
Total prepaid expenses and other current assets $304.8
 $280.4
Other non-current liabilities consist of the following:

December 25,
2021		March 27,
2021
 (millions)
Finance lease obligations$350.5 $370.5 
Deferred lease incentives and obligations57.6 62.4 
Derivative financial instruments27.5 55.1 
Accrued benefits and deferred compensation13.5 22.4 
Deferred tax liabilities11.7 10.7 
Other non-current liabilities37.6 39.7 
Total other non-current liabilities$498.4 $560.8 

1518


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.    Impairment of Assets
The Company recorded non-cash impairment charges of $19.3 million during the nine months ended December 25, 2021, and $2.6 million and $26.9 million during the three-month and nine-month periods ended December 26, 2020, respectively, to write-down certain long-lived assets in connection with its restructuring plans (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 had not yet expired.
See Note 11 for further discussion of these impairment charges.
8.    Restructuring and Other non-current assets consistCharges, Net
A description of significant restructuring and other activities and their related costs is provided below.
Fiscal 2021 Strategic Realignment Plan
The Company has undertaken efforts to realign its resources to support future growth and profitability, and to create a sustainable, enhanced cost structure. The key areas of the following:Company's initiatives underlying these efforts involve evaluation of its: (i) team organizational structures and ways of working; (ii) real estate footprint and related costs across its 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 (the "Fiscal 2021 Strategic Realignment Plan") to reduce its global workforce. Additionally, during a 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.
  December 30,
2017		 April 1,
2017
  (millions)
Non-current investments $83.3
 $21.4
Restricted cash 34.1
 33.7
Security deposits 28.9
 26.5
Derivative financial instruments 0.2
 9.6
Other non-current assets 33.8
 40.0
Total other non-current assets $180.3
 $131.2
Accrued expensesShortly thereafter, 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 and other current liabilities consistin connection with its third initiative. Specifically, the Company entered into a multi-year licensing partnership, which took effect on August 1, 2021 following a transition period, with an affiliate of 5 Star Apparel LLC, a division of the following:OVED Group, to manufacture, market, and distribute Chaps menswear and womenswear. This agreement is expected to 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.
Later, on February 3, 2021, the Company's Board of Directors approved additional actions related to its real estate initiative. Specifically, the Company is in the process of further rightsizing and consolidating its global corporate offices to better align with its organizational profile and new ways of working. The Company also has closed, and expects to continue to close, certain of its stores to improve overall profitability. Additionally, the Company plans to complete the consolidation of its North America distribution centers in order to drive greater efficiencies, improve sustainability, and deliver a better consumer experience.
  December 30,
2017		 April 1,
2017
  (millions)
Accrued operating expenses $223.9
 $188.0
Accrued payroll and benefits 215.6
 173.5
Other taxes payable 202.4
 172.2
Accrued inventory 179.9
 154.9
Restructuring reserve 84.0
 140.8
Derivative financial instruments 46.5
 12.3
Dividends payable 40.6
 40.5
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
Total accrued expenses and other current liabilities $1,089.1
 $982.7
Finally, on June 26, 2021, in connection with its brand portfolio initiative, the Company sold its Club Monaco business to Regent, L.P. ("Regent"), a global private equity firm, with no resulting gain or loss on sale realized during the first quarter of Fiscal 2022. Regent acquired Club Monaco's assets and liabilities in exchange for potential future cash consideration payable by Regent, including earn-out payments based on Club Monaco meeting certain defined revenue thresholds over a five-year period. Accordingly, the Company may realize amounts in the future related to the receipt of such contingent consideration (as discussed further below). Additionally, in connection with this divestiture, the Company is providing Regent with certain operational support for a transitional period of up to 12 months, varying by functional area.
Other non-current liabilities consistIn connection with these collective realignment initiatives, the Company expects to incur total estimated pre-tax charges of the following:
  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

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.
1619


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.Impairment of Assets
The Company recorded non-cash impairment charges of $2.2 million and $14.0 million during the three-month and nine-month periods ended December 30, 2017, respectively, and $10.3 million and $56.7 million during the three-month and nine-month periods ended December 31, 2016, respectively, to write off certain fixed assets related to its domestic and international stores, shop-within-shops, and corporate offices in connection with the Way Forward Plan (see Note 8).
Additionally, during the three-month and nine-month periods ended December 30, 2017, the Company recorded non-cash impairment charges of $1.7 million and $10.8 million, respectively, to write off certain fixed 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 impairment charges recorded by the Company during the fiscal periods presented.
8.Restructuring and Other Charges
A description of significant restructuring and other activities and related costs is included below.
Way Forward Plan
On June 2, 2016, 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 Plan"). The Company is refocusing on 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 in 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 expected to shift into Fiscal 2019.
In connection with the Way Forward Plan, the Company currently expects 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 cash and non-cash charges incurred since inception were $352.1 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. In addition to these charges, the Company 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 its Way Forward Plan.

17

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the charges recorded in connection with the Way ForwardFiscal 2021 Strategic Realignment Plan during the three-month and nine-monthfiscal periods ended December 30, 2017 and December 31, 2016,presented (inclusive of immaterial other restructuring-related charges previously recorded during the first quarter of Fiscal 2021), as well as the cumulative charges recorded since its inception, is as follows:
Three Months EndedNine Months Ended
December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020		Cumulative Charges
 (millions)
Cash-related restructuring charges:
Severance and benefit costs$— $3.1 $(3.9)$159.4 $140.3 
Other cash charges1.9 5.8 6.3 9.7 21.2 
Total cash-related restructuring charges1.9 8.9 2.4 169.1 161.5 
Non-cash charges:
Impairment of assets (see Note 7)— 2.6 19.3 26.9 88.7 
Inventory-related charges(a)
— 7.0 — 8.3 8.3 
Accelerated stock-based compensation expense(b)
— — 2.0 — 2.0 
Total non-cash charges— 9.6 21.3 35.2 99.0 
Total charges$1.9 $18.5 $23.7 $204.3 $260.5 
  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 was recorded within restructuring and other charges, net in the consolidated statements of operations, related to vesting provisions associated with certain separation agreements.
In addition to the charges summarized in the table above, the Company recognized $3.1 million of income within restructuring and other charges, net in the consolidated statements of operations during the third quarter of Fiscal 2022 primarily related to a certain revenue share clause in its agreement with Regent for the sale of Club Monaco that entitled it to receive a portion of the sales generated by the Club Monaco business during a four-month business transition period.
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 ForwardFiscal 2021 Strategic Realignment Plan is as follows:
Severance and Benefit CostsOther Cash ChargesTotal
(millions)
Balance at March 27, 2021$96.2 $3.2 $99.4 
Additions (reductions) charged to expense(3.9)6.3 2.4 
Cash payments applied against reserve(52.4)(9.3)(61.7)
Non-cash adjustments0.6 — 0.6 
Balance at December 25, 2021$40.5 $0.2 $40.7 
  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
Other Charges

The Company recorded other charges of $1.4 million and $7.3 million during the three-month and nine-month periods ended December 25, 2021, respectively, and $1.0 million and $8.3 million during the three-month and nine-month periods ended December 26, 2020, respectively, primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired.
1820


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.    Income Taxes
Global Reorganization Plan
On May 12, 2015, the Company's Board of Directors approved a reorganization 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 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 and nine-month periods ended December 30, 2017, the Company recorded other charges of $3.5 million and $10.5 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, respectively, and lowered its diluted earnings per share by $2.80 during each of these periods. The provisional amounts were based on the Company's present interpretations of 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.
Effective Tax Rate
The Company's effective tax rate, which is calculated by dividing each fiscal period's income tax provisionbenefit (provision) by pretax income (loss), was 143.9%21.4% and 73.8%20.6% during the three-month and nine-month periods ended December 30, 2017,25, 2021, respectively, and 34.0%26.2% and 36.0%(18.9%) during the three-month and nine-month periods ended December 31, 2016,26, 2020, respectively.
The effective tax ratesrate for the three-month and nine-month periodsthree months ended December 30, 2017 were25, 2021 was slightly higher than the U.S. federal statutory income tax rate of 35%21% primarily as a result of the one-time charges recorded in connection with the TCJA, as previously discussed,due to state taxes, partially offset by the favorable impact of certain permanent adjustments. The effective tax rate for the proportionnine months ended December 25, 2021 was slightly lower than the U.S. federal statutory income tax rate of 21% primarily due to the favorable tax impact of earnings generated in lower taxed foreign jurisdictions versus the U.S. and foreign income tax reserve releases. Additionally, theThe effective tax rate for the ninethree months ended

20

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 30, 2017 reflected26, 2020 was higher than the negative impact of the adoption of ASU 2016-09 (see Note 4), as well as the unfavorable impact of additionalU.S. federal statutory income tax reserves associatedrate of 21% primarily due to incremental tax expense resulting from new legislation enacted in connection with certain income tax audits.
The effective tax rates for 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.European Union's anti-tax avoidance directive (as discussed further below), partially offset by valuation allowances and adjustments recorded onagainst certain deferred tax assets certain nondeductible expenses,as a result of significant business disruptions attributable to COVID-19 that were expected to impact the ultimate realizability of such assets, and unrecognized tax benefits recorded on current year tax positions.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 31, 201626, 2020 was also unfavorablylower 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.
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 additionalthe 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 reservescredits, among other provisions.
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 to 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 anthe 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 tax authorities and analyses performed related to the transitional provision noted above, the Company recorded a one-time income tax settlementbenefit and certain incomecorresponding deferred tax audits.asset of $122.9 million during Fiscal 2020.
Subsequently, during the third quarter of Fiscal 2021, the Company reduced its one-time tax benefit by $14.2 million due to new legislation enacted in connection with the European Union's anti-tax avoidance directive, which increased the Company's effective tax rate by 870 basis points and 3,580 basis points during the three-month and nine-month periods ended December 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$75.1 million and $62.7$91.4 million as of December 30, 201725, 2021 and April 1, 2017,March 27, 2021, respectively, and iswas included within the 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$54.0 million and $46.7$68.0 million as of December 30, 201725, 2021 and April 1, 2017,March 27, 2021, respectively.
21

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 incomeexaminations by the relevant tax examinationsauthorities for years prior to its fiscal year ended April 3, 2010.March 30, 2013.
10.Debt
10.    Debt
Debt consists of the following:
  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)
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

December 25,
2021		March 27,
2021
(millions)
$400 million 3.750% Senior Notes(a)
$397.6 $397.1 
$500 million 1.700% Senior Notes(b)
499.4 498.4 
$750 million 2.950% Senior Notes(c)
738.4 737.4 
Total debt1,635.4 1,632.9 
Less: current portion of long-term debt499.4 — 
Total long-term debt$1,136.0 $1,632.9 
21

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. (a)The carrying value of the 2.625%3.750% Senior Notes is alsopresented net of unamortized debt issuance costs and original issue discount of $1.3$2.4 million and $1.7$2.9 million as of December 30, 201725, 2021 and April 1, 2017,March 27, 2021, respectively.
(b)The carrying value of the 1.700% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $0.6 million and $1.6 million as of December 25, 2021 and March 27, 2021, respectively.
(c)The carrying value of the 2.950% Senior Notes is presented net of unamortized debt issuance costs and original issue discount of $11.6 million and $12.6 million as of December 25, 2021 and March 27, 2021, respectively.
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-denominatedunsecured 2.125% senior notes whichthat matured on October 4, 2013.September 26, 2018 (the "2.125% Senior Notes").
In August 2015,June 2020, the Company completed a secondanother 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.
22

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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, theThe Company initiatedhas a commercial paper borrowing program (the "Commercial Paper Program") that allowedallows 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 Commercialbroker-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(as defined below.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 in seniority with the Company's other forms of unsecured indebtedness. As of both December 30, 2017,25, 2021 and March 27, 2021, there were no borrowings outstanding under the Commercial Paper Program.
Revolving Credit Facilities
Global Credit Facility
In February 2015,August 2019, the Company replaced its then existing credit facility and entered into an amended and restateda 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, 2020August 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. TheYen, 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 $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 millionis 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 letters6.5 basis points is subject to adjustment based on the Company's credit ratings. Certain of credit.these provisions were amended in January 2022, 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. TheAs originally implemented, the Global Credit Facility also requires the Company to maintain a maximum ratio of Adjusted Debt to Consolidated EBITDAR (the "leverage ratio") of no greater than 3.754.25 as of the date of measurement for the four4 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,
23

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(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 temporarily amended in May 2020, as discussed below.
In response to the COVID-19 pandemic, the Company entered into an amendment of its Global Credit Facility in May 2020 (the "Amendment"), which among its various provisions (as described in Note 11 of the Fiscal 2021 10-K), temporarily waived its leverage ratio requirement and imposed certain restrictions, including but not limited to, the amount of dividends and distributions on, or purchases, redemptions, repurchases, retirements or acquisitions of, the Company's stock. Subsequently, in November 2021, all terms and conditions reverted back to the original credit facility agreement upon the Company satisfying certain requirements stipulated in the Amendment.
In January 2022, the Company entered into a second amendment of its Global Credit Facility (the "Second Amendment"). Under the Second Amendment, alternate rates of interest were provided for specific Eurocurrency borrowings. Eurocurrency borrowings denominated in Euros bear interest at Adjusted Euro Interbank Offered Rate and those denominated in Japanese Yen bear interest at Adjusted Tokyo Interbank Offered Rate, as each such term is defined in the Global Credit Facility as amended by the Second Amendment.
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, 25, 2021, no Event of Default (as such term is defined pursuant to the Global Credit Facility) has occurred under the Company's Global Credit Facility.Facility.
As of both December 25, 2021 and March 27, 2021, there were no borrowings outstanding under the Global Credit Facility. However, the Company was contingently liable for $9.5 million and $8.9 million of outstanding letters of credit as of December 25, 2021 and March 27, 2021, respectively.
Pan-Asia CreditBorrowing 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 facilitiesAdditionally, 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 CreditBorrowing 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 CreditBorrowing Facilities do not contain any financial covenants. TheA summary of the Company's Pan-Asia CreditBorrowing Facilities by country areis 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 may3, 2022, which is also able to be used to support bank guarantees.
•South Korea Credit Facility — provides Ralph Lauren (Korea) Ltd. with a revolving line of credit of up to 4730 billion South Korean Won (approximately $25 million) through October 28, 2022.
•Japan Overdraft Facility — provides Ralph Lauren Corporation Japan with an overdraft amount of up to 5 billion Japanese Yen (approximately $44 million) through October 31, 2018.
April 28, 2022.
As of both December 30, 2017,25, 2021 and March 27, 2021, there were no borrowings outstanding under the Pan-Asia CreditBorrowing Facilities.
Refer to Note 1211 of the Fiscal 20172021 10-K for additional discussion of the terms and conditions of the Company's debt and credit facilities.
11.Fair Value Measurements24

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11.    Fair Value Measurements
U.S. GAAP establishesprescribes 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 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 25,
2021		March 27,
2021
 (millions)
Derivative assets(a)
$26.5 $15.8 
Derivative liabilities(a)
28.6 55.4 
(a)
(a)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.Level 2 measurements.
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.
To the extent the Company invests in commercial paper, such investments 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 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 valuesamortized cost 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 amortized cost carrying values.
25

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table summarizes the carrying values and the estimated fair values of the Company's debt instruments:
 December 25, 2021March 27, 2021
 
Carrying Value(a)
Fair Value(b)
Carrying Value(a)
Fair Value(b)
 (millions)
$400 million 3.750% Senior Notes$397.6 $431.0 $397.1 $443.4 
$500 million 1.700% Senior Notes499.4 502.7 498.4 507.8 
$750 million 2.950% Senior Notes738.4 781.8 737.4 779.4 
  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
(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 ROU assets, are not required to be measured at fair value on a recurring basis, and instead are reported at carrying value.their amortized cost in its consolidated balance sheet. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying valuethey may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), the respective carrying value of non-financial instrumentsassets are assessed for impairment and, if applicable,ultimately considered impaired, are adjusted and written down to and recorded attheir fair value, consideringas estimated based on consideration of external market participant assumptions.assumptions and discounted cash flows.
During the nine months ended December 25, 2021 and the three-month and nine-month periods ended December 30, 2017 and December 31, 2016,26, 2020, the Company recorded non-cash impairment charges of $24.8 million and $56.7 million, respectively, to fully write offreduce the carrying values of certain long-lived assets based uponto their assumedestimated fair values of zero.values. The fair values of these assets were determined based on Level 3 measurements. Inputs to these fair value measurements, the related inputs of which included estimates of the amount and timing of the assets' net future discounted cash flows (including any potential sublease income for lease-related ROU assets), based on historical experience and consideration of current trends, market conditions, and market conditions. See Note 7 for further discussion of thecomparable sales, as applicable.
The following tables summarize non-cash impairment charges recorded by the Company during the fiscal periods presented to reduce the carrying values of certain long-lived assets to their estimated fair values as of the assessment date:
Three Months Ended
December 25, 2021December 26, 2020
Long-Lived Asset CategoryTotal ImpairmentsFair Value
as of
Impairment Date		Total ImpairmentsFair Value
as of
Impairment Date
(millions)
Property and equipment, net$— N/A$2.2 $— 
Operating lease right-of-use assets— N/A0.4 — 
Nine Months Ended
December 25, 2021December 26, 2020
Long-Lived Asset CategoryTotal ImpairmentsFair Value
as of Impairment Date		Total ImpairmentsFair Value
as of Impairment Date
 (millions)
Property and equipment, net$1.0 $— $13.0 $— 
Operating lease right-of-use assets18.3 16.8 22.7 33.9 
26

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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.
No goodwill impairment charges associated with goodwill or other intangible assets were recorded during either of the nine-month periods ended December 30, 201725, 2021 or December 31, 2016.26, 2020. The Company performed its annual goodwill impairment assessment using a qualitative approach as of the beginning of the second quarter of Fiscal 2018.2022. 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'sits 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 benchmark interest rate. Consequently,rates. Accordingly, based on its assessment thereof, the Company usesmay use derivative financial instruments to manage and mitigate such risks. The Company does not enter into derivative transactionsuse 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, 201725, 2021 and April 1, 2017:March 27, 2021:
 Notional AmountsDerivative AssetsDerivative Liabilities
Derivative Instrument(a)
December 25,
2021		March 27,
2021		December 25,
2021		March 27,
2021		December 25,
2021		March 27,
2021
   
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$317.6 $168.9 PP$3.2 PP$5.0 (e)$0.5 $— 
Net investment hedges(c)
696.2 723.2 ONCA23.2 ONCA10.2 ONCL27.4 ONCL55.1 
Total Designated Hedges1,013.8 892.1 26.4 15.2 27.9 55.1 
Undesignated Hedges:
FC — Undesignated hedges(d)
191.9 242.4 PP0.1 PP0.6 AE0.7 AE0.3 
Total Hedges$1,205.7 $1,134.5 $26.5 $15.8 $28.6 $55.4 
  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.
(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.
(e)$0.4 million included within accrued expenses and other current liabilities and $0.1 million included within other non-current liabilities.
2527


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 eight9 separate counterparties, the amounts presented in the consolidated balance sheets as of December 30, 201725, 2021 and April 1, 2017March 27, 2021 would be adjusted from the current gross presentation as detailed in the following table:
December 25, 2021March 27, 2021
Gross Amounts Presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting AgreementsNet
Amount		Gross Amounts Presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting AgreementsNet
Amount
(millions)
Derivative assets$26.5 $(0.9)$25.6 $15.8 $(0.3)$15.5 
Derivative liabilities28.6 (0.9)27.7 55.4 (0.3)55.1 
  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, 201725, 2021 and December 31, 2016:26, 2020:
 Gains (Losses)
Recognized in OCI
 Three Months EndedNine Months Ended
December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Designated Hedges:
FC — Cash flow hedges$1.7 $(2.4)$1.9 $(9.0)
Net investment hedges — effective portion24.3 (35.7)29.5 (60.0)
Net investment hedges — portion excluded from assessment of hedge effectiveness(0.7)(14.7)11.1 (36.0)
Total Designated Hedges$25.3 $(52.8)$42.5 $(105.0)
  
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 EndedNine Months Ended
December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
Cost of
goods sold		Other income (expense), netCost of
goods sold		Other income (expense), netCost of
goods sold		Other income (expense), netCost 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
$(617.3)$0.1 $(502.4)$1.6 $(1,514.4)$(0.4)$(1,035.3)$5.5 
Effects of cash flow hedging:
FC — Cash flow hedges1.4 — 5.2 — 1.5 — 11.7 (0.3)
2628


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 EndedNine Months Ended
December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions) 
Net Investment Hedges
Net investment hedges — portion excluded from assessment of hedge effectiveness(a)
$2.9 $2.9 $8.6 $8.5 Interest expense
Total Net Investment Hedges$2.9 $2.9 $8.6 $8.5 
(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, 2017,25, 2021, it is expectedestimated that $8.0$5.4 million of pretax net lossesgains 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 amountsAmounts 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, 201725, 2021 and December 31, 2016:26, 2020:
 
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 EndedNine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)   (millions) 
Undesignated Hedges:         Undesignated Hedges:
FC — Undesignated hedges $(1.9) $14.2
 $0.2
 $2.9
 Foreign currency gains (losses)FC — Undesignated hedges$4.1 $(4.2)$4.6 $(0.3)Other income (expense), net
Total Undesignated Hedges $(1.9) $14.2
 $0.2
 $2.9
 Total Undesignated Hedges$4.1 $(4.2)$4.6 $(0.3)
Risk Management Strategies
Forward Foreign Currency Exchange Contracts
The Company uses forward foreign currency exchange contracts to reducemitigate 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 managefor managing the level of exposure to the risk of foreign currencysuch 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 currencyrelated exposures anticipated over a two-year period. In doing so, the Company usesnext twelve months using forward foreign currency exchange contracts that generally havewith maturities of two months to two yearsone year to provide continuing coverage throughoutover the hedging period of the respective exposure.
Interest Rate Swap Contracts
During Fiscal 2016, the Company entered into two pay-floating rate, receive-fixed rate interest rate swap contracts which it designated as hedges against changes in the respective fair values of its fixed-rate 2.125% Senior Notes and its fixed-rate 2.625% 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. Changes in the fair values of the Interest Rate Swaps were offset

27

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

by changes in the fair values of the 2.125% Senior Notes and 2.625% Senior Notes attributed to changes in the benchmark interest rate, with no resulting ineffectiveness recognized in earnings during any of the fiscal periods presented.
Cross-Currency Swap Contracts
During Fiscal 2016, theThe Company entered into two pay-floatingperiodically designates pay-fixed rate, receive-floating ratereceive fixed-rate cross-currency swap contracts with notional amounts of €280 million and €274 million, which it designated 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-fixed rate, receive-fixed rate cross-currency swap thecontracts swap U.S. Dollar-denominated variable interest rate payments based on 3-month LIBOR plus a fixed spread (as paid under the Interest Rate Swaps described above) for Euro-denominated variable interest rate payments based on the 3-month Euro Interbank Offered Rate plus acontract's notional amount and the fixed spread. As a result, the Cross-Currency Swaps, in conjunction with the Interest Rate Swaps, economically convertrate of interest payable on certain of the Company's $300 millionsenior notes for Euro-denominated fixed interest rate payments, thereby economically converting a portion of its fixed-rate 2.125% and $300 million fixed-rate 2.625%U.S. Dollar-denominated senior note obligations to €280 million and €274 million floating-ratefixed rate Euro-denominated liabilities, respectively. No material gains or losses related to the ineffective portion, or the amount excluded from effectiveness testing, were recognized in interest expense within the consolidated statements of operations during any of the fiscal periods presented.obligations.
See Note 3 for further discussion of the Company's accounting policies relating to its derivative financial instruments.
29

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Investments
As of December 30, 2017,25, 2021, the Company's investments were all classified as short-term investmentsand consisted of $732.9 million of time deposits and $129.4 million of commercial paper, and its non-current investments consisted of $83.3$710.2 million of time deposits. AsThe Company's investments as of April 1, 2017, the Company heldMarch 27, 2021 were also all classified as short-term investmentsand consisted of $684.7$197.5 million and non-current investments of $21.4 million, both consisting of time deposits.
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 20172021 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, leases, 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 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 entersmay enter into certain guarantees or other 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)

14.14.    Equity
Summary of Changes in Equity
A reconciliation of the beginning 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
Common Stock Repurchase Program
In June 2016, as partRepurchases 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 overare subject to overall business and market conditions, as well as other potential factors such as the term of the ASR Program, less an agreed upon discount. The average price per share paid for all of the shares deliveredtemporary restrictions previously in place under the ASR Program was $98.48.Company's Global Credit Facility. Accordingly, in response to 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. However, the Company resumed activities under its Class A common stock repurchase program during the third quarter of Fiscal 2022 as restrictions under its Global Credit Facility were lifted (see Note 10) and overall business and market conditions have improved since the COVID-19 pandemic first emerged.
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 30,
2017		 December 31,
2016
  (millions)
Cost of shares repurchased $—
 $100.0
Number of shares repurchased —
 1.0
Nine Months Ended
December 25,
2021		December 26,
2020
(millions)
Cost of shares repurchased$300.0 $— 
Number of shares repurchased2.5 — 
As of December 30, 2017,25, 2021, the remaining availability under the Company's Class A common stock repurchase program was approximately $100$280 million. RepurchasesOn February 2, 2022, the Company's Board of Directors approved an expansion of the Company's existing common stock repurchase program that allows it to repurchase up to an additional $1.500 billion of its Class A common stock.
30

RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In addition, during the nine-month periods ended December 25, 2021 and December 26, 2020, 0.3 million and 0.5 million shares of the Company's Class A common stock, are subject to overall business and market conditions.
In addition, during each of the nine-month periods ended December 30, 2017 and December 31, 2016, 0.2 million shares of Class A common stock,respectively, at a cost of $15.9$40.4 million and $15.0$36.1 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.stock since 2003.
In response to business disruptions related to the COVID-19 pandemic, effective beginning in the first quarter of Fiscal 2021 the Company temporarily suspended its quarterly cash dividend program as a preemptive action to preserve cash and strengthen its liquidity position. On May 19, 2021, the Company's Board of Directors approved the reinstatement of its quarterly cash dividend program at the pre-pandemic amount of $0.6875 per share. The third quarter Fiscal 20182022 dividend of $0.50$0.6875 per share was declared on December 14, 2017,10, 2021, was payable to stockholdersshareholders of record at the close of business on December 29, 2017,24, 2021, and was paid on January 12, 2018. Dividends paid amounted7, 2022.
The Company intends to $121.7 millioncontinue to pay regular dividends on outstanding shares of its common stock. However, any decision to declare and $123.7 million duringpay dividends in the nine-month periods ended December 30, 2017future will ultimately be made at the discretion of the Company's Board of Directors and December 31, 2016, respectively.will depend on the Company's results of operations, cash requirements, financial condition, and other factors that the Board of Directors may deem relevant, including economic and market conditions.
15.Accumulated Other Comprehensive Income (Loss)
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) $(130.6)
Foreign Currency Translation Gains (Losses)(a)
Net Unrealized Gains (Losses) on Cash Flow Hedges(b)
Net Unrealized Gains (Losses) on Defined Benefit Plans(c)
Total Accumulated Other Comprehensive Income (Loss)
(millions)
Balance at March 27, 2021$(123.2)$4.6 $(2.2)$(120.8)
Other comprehensive income (loss), net of tax:
OCI before reclassifications(29.8)1.6 0.1 (28.1)
Amounts reclassified from AOCI to earnings— (1.2)(0.1)(1.3)
Other comprehensive income (loss), net of tax(29.8)0.4 — (29.4)
Balance at December 25, 2021$(153.0)$5.0 $(2.2)$(150.2)
Balance at March 28, 2020$(130.4)$18.0 $(5.8)$(118.2)
Other comprehensive income (loss), net of tax:
OCI before reclassifications46.0 (7.8)(0.5)37.7 
Amounts reclassified from AOCI to earnings— (10.0)(0.1)(10.1)
Other comprehensive income (loss), net of tax46.0 (17.8)(0.6)27.6 
Balance at December 26, 2020$(84.4)$0.2 $(6.4)$(90.6)
(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.

(a)OCI before reclassifications to earnings related to foreign currency translation gains (losses) includes an income tax provision of $10.3 million and an income tax benefit of $22.7 million for the nine-month periods ended December 25, 2021 and December 26, 2020, respectively. OCI before reclassifications to earnings for the nine-month periods ended December 25, 2021 and December 26, 2020 includes a gain of $31.0 million (net of a $9.6 million income tax provision) and a loss of $72.7 million (net of a $23.3 million income tax benefit), 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).
31


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(b)OCI before reclassifications to earnings related to net unrealized gains (losses) on cash flow hedges are presented net of an income tax provision of $0.3 million and an income tax benefit of $1.2 million for the nine-month periods ended December 25, 2021 and December 26, 2020, 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.
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 EndedNine Months EndedLocation of
Gains (Losses)
Reclassified from AOCI
to Earnings
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (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$1.4 $5.2 $1.5 $11.7 Cost of goods sold
FC — Cash flow hedges
 0.6
 9.3
 (0.4) 3.3
 Foreign currency gains (losses) FC — Cash flow hedges— — — (0.3)Other income (expense), net
Tax effect 0.5
 (1.4) 0.3
 (0.2) Income tax benefit (provision) Tax effect(0.3)(0.7)(0.3)(1.4)Income tax provision
Net of tax $(4.8) $5.2
 $(4.4) $(1.1)  Net of tax$1.1 $4.5 $1.2 $10.0 
(a)FC = Forward foreign currency exchange contracts.
(a)
16.    Stock-based Compensation
FC = Forward foreign currency exchange contracts.
16.Stock-based Compensation
The Company's stock-based compensation awards are currently issued under the 20102019 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 20102019 Incentive Plan.
Refer to Note 18 of the Fiscal 20172021 10-K for a detailed description of the Company's stock-based compensation awards, including information related to vesting terms, service, performance, and performancemarket 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, 201725, 2021 and December 31, 201626, 2020 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 EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Compensation expense(a)
$22.0 $19.8 $62.6 (a)$54.4 
Income tax benefit(3.3)(3.2)(9.9)(9.9)
(a)
(a)Includes $2.0 million of accelerated stock-based compensation expense recorded within restructuring and other charges, net in the consolidated statements of operations (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, 20171,720
Granted—
Exercised—
Cancelled/Forfeited(537)
Options outstanding at December 30, 20171,183
Restricted Stock Awards and Service-based RSUs
The fair values of restricted stock awardsservice-based RSUs granted to certain of the Company's senior executives and other employees, as well as to non-employee directors, are determined based on the fair value of the Company's Class A common stock on the date of grant. No suchgrant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not accrue to the holder while outstanding and unvested. The weighted-average grant date fair values of service-based RSU awards granted were granted$117.56 and $63.98 per share during the nine-month periods ended December 30, 201725, 2021 and December 31, 2016.26, 2020, respectively.
A summary of service-based RSU activity during the nine months ended December 25, 2021 is as follows:
Number of Service-based RSUs
(thousands)
Unvested at March 27, 20211,809 
Granted546 
Vested(596)
Forfeited(83)
Unvested at December 25, 20211,676 
Performance-based RSUs
The fair values of service-basedthe Company's performance-based RSUs granted to certain of the Company'sits senior executives as well as to certain of itsand 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 entitledaccrue to accrue dividend equivalentsthe holder while outstanding. The weighted-average grant date fair values of service-based RSU awards granted were $73.32outstanding 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 modifierRSU awards granted was $117.79 during the nine months ended December 25, 2021. No such awards were granted during the nine-month periodsnine months ended December 30, 2017 and December 31, 2016 were $69.40 and $86.15 per share, respectively.26, 2020.
Market-based RSUs
The Company grants market-based RSUs, which are based on total shareholder return ("TSR") performance, to its senior executives and other key employees. The Company estimates the fair valuesvalue of the Company's performance-based RSUs with aits TSR modifier are determinedawards on the date of grant using a Monte Carlo simulation, valuation model. This pricing model useswhich models multiple simulationsstock price paths of the Company's Class A common stock and that of its peer group to evaluate the probability of the Company achieving various stock price levels toand 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 $146.46 per share during the nine months ended December 25, 2021. No such awards were granted during the nine-month periodsnine months ended December 30, 2017 and26, 2020. The assumptions used to estimate the fair value of TSR awards granted during the nine months ended December 31, 2016.25, 2021 were as follows:

Nine Months Ended
December 25,
2021
Expected volatility46.8 %
Expected dividend yield2.2 %
Risk-free interest rate0.4 %
33


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of performance-based RSU activity including TSR awards during the nine months ended December 25, 2021 is as follows:
Number of
Performance-based
RSUs
(thousands)
Unvested at March 27, 2021600 
Granted239 
Change due to performance and/or market condition achievement9 
Vested(229)
Forfeited(13)
Unvested at December 25, 2021606 
Stock Options
A summary of stock option activity during the nine months ended December 30, 201725, 2021 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 InformationNumber of Options
(thousands)
Options outstanding at March 27, 2021255 
Granted— 
Exercised— 
Cancelled/Forfeited(255)
Options outstanding at December 25, 2021— 
17.    Segment Information
The Company has three3 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 wholesaleretail and retailwholesale businesses in the U.S. and Canada, excluding Club Monaco.Canada. 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 wholesaleretail and retailwholesale businesses in Europe, and the Middle East, excluding Club Monaco.and Latin America. 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 EuropeAsia is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various e-commercedigital 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 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. In addition, the Company sells its products online through various third-party digital partner e-commercecommerce sites. In Asia, theThe Company's wholesale business in Asia is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.
34

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 EuropeAsia, and Asia, (ii) sales of Ralph Lauren branded products made through its wholesale business in Latin America, and (iii) royalty revenues earned through its global licensing alliances, excluding Club Monaco. As discussed in Note 8, the Company completed the sale of its Club Monaco business at the end of its first quarter Fiscal 2022.
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 20172021 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 restructuringrestructuring-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.

Net revenues for each of the Company's segments are as follows:
 Three Months EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Net revenues:
North America$928.7 $715.4 $2,293.9 $1,423.4 
Europe462.9 315.6 1,313.3 795.8 
Asia382.6 329.6 940.7 738.1 
Other non-reportable segments41.2 72.2 147.9 156.5 
Total net revenues$1,815.4 $1,432.8 $4,695.8 $3,113.8 
Operating income (loss) for each of the Company's segments is as follows:
 Three Months EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Operating income (loss)(a):
North America$229.6 $166.1 $586.5 $264.6 
Europe97.1 54.1 353.4 120.8 
Asia85.6 69.4 189.4 120.6 
Other non-reportable segments38.5 21.5 106.2 37.6 
450.8 311.1 1,235.5 543.6 
Unallocated corporate expenses(161.5)(130.8)(465.3)(384.1)
Unallocated restructuring and other charges, net(b)
(0.2)(9.9)(8.6)(177.4)
Total operating income (loss)$289.1 $170.4 $761.6 $(17.9)
(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
3435


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the fourth quartermonths ended December 26, 2020, segment operating income (loss) reflects net bad debt expense reversals of Fiscal 2017, the Company realigned its segment reporting structure as a result of significant organizational changes implemented$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 the Way Forward Plan. ReferCOVID-19 business disruptions, and bad debt expense of $1.0 million related to Note 20 of the Company's Fiscal 2017 Form 10-K for further discussion. All prior period segment information has been recast to reflect the realignment of the Company's segment reporting structure on a comparative basis.
Net revenues andAsia. Segment operating income (loss) for each ofand unallocated corporate expenses during the Company's segmentsthree-month and nine-month periods ended December 25, 2021 and December 26, 2020 also included asset impairment charges (see Note 7), which are as follows:detailed below:
 Three Months EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Asset impairment charges:
North America$— $(2.0)$(0.4)$(11.9)
Europe— (0.1)— (21.3)
Asia— (0.1)(1.1)(1.4)
Other non-reportable segments— — (0.3)(0.7)
Unallocated corporate expenses— (0.4)(17.5)(0.4)
Total asset impairment charges$— $(2.6)$(19.3)$(35.7)
  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


(b)The three-month and nine-month periods ended December 25, 2021 and December 26, 2020 included certain unallocated restructuring and other charges, net (see Note 8), which are detailed below:
  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)

35

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:
   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) $(193.9)
 Three Months EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Unallocated restructuring and other charges, net:
North America-related$— $(0.7)$0.1 $(42.0)
Europe-related— (5.9)1.0 (32.2)
Asia-related0.8 — 1.2 (9.9)
Other non-reportable segment-related— (1.6)(0.1)(3.4)
Corporate operations-related0.4 (0.7)(3.5)(81.6)
Unallocated restructuring charges1.2 (8.9)(1.3)(169.1)
Other charges (see Note 8)(1.4)(1.0)(7.3)(8.3)
Total unallocated restructuring and other charges, net$(0.2)$(9.9)$(8.6)$(177.4)
Depreciation and amortization expense for the Company's segments is as follows:
Three Months EndedNine Months Ended
 Three Months Ended Nine Months Ended December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 (millions)
 (millions)
Depreciation and amortization:        
Depreciation and amortization expense:Depreciation and amortization expense:
North America $19.5
 $27.8
 $61.1
 $84.0
North America$17.8 $17.0 $53.5 $52.7 
Europe 9.1
 8.6
 25.7
 23.5
Europe7.4 7.7 22.7 23.5 
Asia 12.1
 11.3
 35.7
 36.8
Asia13.1 14.5 38.9 43.1 
Other non-reportable segments 2.6
 3.5
 8.2
 11.1
Other non-reportable segments— 1.1 0.4 3.2 
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
Unallocated corporateUnallocated corporate17.9 20.0 53.8 63.0 
Total depreciation and amortization expenseTotal depreciation and amortization expense$56.2 $60.3 $169.3 $185.5 
36


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net revenues by geographic location of the reporting subsidiary are as follows:
  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
 Three Months EndedNine Months Ended
 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions)
Net revenues(a):
The Americas(b)
$974.5 $788.6 $2,451.8 $1,581.1 
Europe(c)
458.0 314.4 1,302.5 794.1 
  Asia(d)
382.9 329.8 941.5 738.6 
Total net revenues$1,815.4 $1,432.8 $4,695.8 $3,113.8 
(a)
(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 25, 2021 were $939.2 million and $2.356 billion, respectively, and $749.5 million and $1.503 billion during the three-month and nine-month periods ended December 26, 2020, respectively.
(c)Includes the Middle East.
(d)Includes Australia and New Zealand.
18.    Additional Financial Information
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 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, 201725, 2021 and April 1, 2017March 27, 2021 from the consolidated balance sheets to the consolidated statements of cash flows is as follows:
 December 25,
2021		March 27,
2021
 (millions)
Cash and cash equivalents$2,276.8 $2,579.0 
Restricted cash included within prepaid expenses and other current assets1.5 1.5 
Restricted cash included within other non-current assets7.1 7.5 
Total cash, cash equivalents, and restricted cash$2,285.4 $2,588.0 
  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 restrictedRestricted cash relaterelates to cash placedheld in escrow with certain banks as collateral, primarily to secure guarantees in connection with certain international tax matters.matters and real estate leases.
Cash Paid for Interest and Taxes
Cash paid for interest and income taxes is as follows:
 Three Months Ended Nine Months Ended Nine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020
 (millions) (millions)
Cash paid for interest $3.6
 $2.9
 $9.2
 $9.7
Cash paid for interest$41.0 $27.7 
Cash paid for income taxes 19.4
 19.2
 47.7
 69.5
Cash paid for income taxes, net of refundsCash paid for income taxes, net of refunds168.2 42.9 
37


RALPH LAUREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash Paid for Leases
The following table summarizes certain cash flow information related to the Company's leases:
Nine Months Ended
December 25, 2021December 26,
2020
(millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$283.9 $253.5 
Operating cash flows for finance leases9.3 3.7 
Financing cash flows for finance leases16.8 8.6 
Non-cash Transactions
Operating lease ROU assets recorded in connection with the recognition of new lease liabilities was $224.8 million during the nine months ended December 25, 2021. No finance lease ROU assets were recorded in connection with the recognition of new lease liabilities during the nine months ended December 25, 2021. Operating and finance lease ROU assets recorded in connection with the recognition of new lease liabilities were $61.5 million and $131.8 million, respectively, during the nine months ended December 26, 2020. Additionally, $55.7 millionof 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$36.0 million and $55.9$26.0 million for the nine-month periods ended December 30, 201725, 2021 and December 31, 2016, 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 during the nine-month periods ended December 30, 2017 and December 31, 2016,26, 2020, respectively.
There were no other significant non-cash investing or financing activities for any of the fiscal periods presented.

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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 implementation and impact of our strategic plans, initiatives and capital expenses, our plans regarding our quarterly cash dividend and Class A common stock repurchase programs, 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 the recent reduction to our global workforce in connection with our long-term growth strategy, 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 transitionstores, 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 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, inflation, civil and political unrest, and diplomatic tensions between the U.S. and other countries;
•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;
39

•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 securecontinue to maintain our facilitiesbrand image and systemsreputation and those ofprotect 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 referredproducts and create an acceptable value proposition for consumers;
•our ability to as the Tax Cutsaccess capital markets and Jobs Act, including related changes tomaintain compliance with covenants associated with 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;existing debt instruments;
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 exposurebusiness resulting from the imposition of additional duties, tariffs, taxes, and other charges or barriers to currency exchange rate fluctuationstrade, including those resulting from both a transactionaltrade 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 potential impact to our business resulting from supply chain disruptions, including those caused by capacity constraints, closed factories and/or labor shortages (stemming from pandemic diseases, labor disputes, strikes, or otherwise), scarcity of raw materials, and port congestion, which could result in inventory shortages and lost sales;
•the potential 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 to recruit and retain employees to operate our retail stores, distribution centers, and various corporate functions;
•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;
39

•our efforts to successfully enhance, upgrade, and/or transition our global information technology systems and digital commerce platforms;
•the potential impact to our business resulting from the financial difficulties of certainif 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 ofon our securities ifoperations 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 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;
40

•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 imagecredit 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 storewholesale customers and licensing partners;
the potential impact on •our operationsability to achieve our goals regarding environmental, social, and on our suppliers and customers resulting from natural or man-made disasters;
the impactgovernance practices, including those related to our business resulting from the United Kingdom's decision to exit the European Unionhuman capital; 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
•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, 2017March 27, 2021 (the "Fiscal 20172021 10-K"). There are no material changes to such risk factors, other thannor 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 toimmediately before or after March 31. As such, fiscal year 20182022 will end on March 31, 2018April 2, 2022 and will be a 52-week53-week period ("Fiscal 2018"2022"). Fiscal year 20172021 ended on April 1, 2017March 27, 2021 and was also a 52-week period ("Fiscal 2017"2021"). The third quarter of Fiscal 20182022 ended on December 30, 201725, 2021 and was a 13-week period. The third quarter of Fiscal 20172021 ended on December 31, 201626, 2020 and was also a 13-week period.

40

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, 2017.25, 2021. 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, 201725, 2021 as compared to the three-month and nine-month periods ended December 31, 2016.
26, 2020.
•Financial condition and liquidity.    This section provides a discussion of our financial condition and liquidity as of December 30, 2017,25, 2021, 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, 201725, 2021 as compared to the nine months ended December 31, 2016;26, 2020; (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 27, 2021.
•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 27, 2021.
41

•Critical accounting policies.    This section discusses any significant changes in our critical accounting policies since April 1, 2017.March 27, 2021. 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 20172021 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.
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 numbera wide range of products, brands, salesdistribution 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,Chaps, among others.
We diversify our business by geography (North America, Europe, and Asia, among other regions) and channelschannel 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-commercedigital 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 useaccess our various trademarks in connection with the licensees' manufacture and sale of designated products, such as certain apparel, eyewear, fragrances, and home furnishings.

41

We organize our business into the following three reportable segments:
•North America — Our North America segment, representing approximately 57%45% of our Fiscal 20172021 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesaleretail and retailwholesale businesses in the U.S. and Canada, excluding Club Monaco.Canada. 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%27% of our Fiscal 20172021 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesaleretail and retailwholesale businesses in Europe, and the Middle East, excluding Club Monaco.and Latin America. 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 23% of our Fiscal 2021 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 EuropeAsia is primarily comprised of our Ralph Lauren stores, our factory stores, our concession-based shop-within-shops, and our various e-commercedigital commerce sites.
Asia — Our Asia segment, representing approximately 13% of our Fiscal 2017 net revenues, primarily consists of sales of our Ralph Lauren branded products made through our wholesale and retail businesses 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. In addition, we sell our products online through various third-party digital partner e-commercecommerce sites. In Asia, ourOur 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%5% of our Fiscal 20172021 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 EuropeAsia, and Asia, (ii) sales of our Ralph Lauren branded products made through our wholesale business in Latin America, and (iii) royalty revenues earned through our global licensing alliances, excluding Club Monaco. As discussed in Note 8 to our accompanying consolidated financial statements, we completed the sale of our Club Monaco business at the end of our first quarter Fiscal 2022.
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 20Approximately 52% 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 20172021 net revenues were earned outside of the U.S. See Note 17 to the accompanying consolidated financial statements for a summaryfurther discussion of net revenues and operating income (loss) byour segment as well as net revenues by geographic location.reporting structure.
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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 timing of seasonal wholesale shipments. As a result of changes in our business, consumer spending patterns, and the macroeconomic environment, including those resulting from pandemic diseases 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 income (loss), and cash flows in any fiscal quarter may be affected by other events impactingaffecting 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, 201725, 2021 are not necessarily indicative of the operating results and cash flows that may be expected for the full Fiscal 20182022.
Recent Developments
COVID-19 Pandemic
Beginning in the fourth quarter of our fiscal year ended March 28, 2020 ("Fiscal 2020"), a novel strain of coronavirus commonly referred to as COVID-19 emerged and spread rapidly across the globe, including throughout all major geographies in which we operate, resulting in adverse economic conditions and business disruptions, as well as significant volatility in global financial markets. Since then, governments worldwide have periodically 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, companies across a wide array of industries have implemented various initiatives to reduce operating expenses and preserve cash balances during the pandemic, including work furloughs, reduced pay, and severance actions, which could lower consumers' disposable income levels or willingness to purchase discretionary items. Such government restrictions, company initiatives, and other macroeconomic impacts resulting from the pandemic could continue to adversely affect consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in indoor shopping centers or other populated locations.
As a result of 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 at the peak of the pandemic, the majority of our stores in key markets were closed for an average of 8 to 10 weeks due to government-mandated lockdowns and other restrictions, resulting in significant adverse impacts to our operating results. Resurgences and outbreaks in certain parts of the world resulted in further business disruptions periodically throughout Fiscal 2021, most notably in Europe where a significant number of our stores were closed for approximately two to three months during the second half of Fiscal 2021, including during the holiday period, due to government-mandated lockdowns and other restrictions. Such disruptions continued throughout Fiscal 2022 in certain regions, although to a lesser extent than the comparable prior year fiscal period. Further, throughout the course of the pandemic, the majority of our stores that were able to remain open have periodically been subject to limited operating hours and/or customer capacity levels in accordance with local health guidelines, with traffic remaining challenged. However, our digital commerce operations have grown significantly from pre-pandemic levels, due in part to our investments and enhanced capabilities, as well as changes in consumer shopping preferences. Our wholesale and licensing businesses have experienced similar impacts, particularly in North America and Europe.
Throughout the course of the pandemic, our priority has been to ensure the safety and well-being of our employees, customers, and the communities in which we operate around the world. We continue to consider 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 also took various preemptive actions in the prior fiscal year to preserve cash and strengthen our liquidity position, as described in the Fiscal 2021 10-K.
Despite the introduction of COVID-19 vaccines and recent improvements in the global economy as a whole, the pandemic remains volatile and continues to evolve, including the emergence of variants of the virus, such as the Delta variant and, most recently, the Omicron variant, which could adversely affect consumer sentiment and confidence. Accordingly, we cannot predict for how long and to what extent the pandemic will impact our business operations or the overall global economy. We will continue to assess our operations location-by-location, considering the guidance of local governments and global health organizations. See Item 1A — "Risk Factors — Risks Related to Macroeconomic Conditions — Infectious disease outbreaks, such as the COVID-19 pandemic, could have a material adverse effect on our business" in the Fiscal 2021 10-K for additional discussion regarding risks to our business associated with the COVID-19 pandemic.
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Fiscal 2021 Strategic Realignment Plan
We have undertaken efforts to realign our resources to support future growth and profitability, and to create a sustainable, enhanced cost structure. The key initiatives underlying these efforts involve evaluation of our: (i) team organizational structures and ways of working; (ii) real estate footprint and related costs across our 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. Additionally, during a 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.
Shortly thereafter, 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 and in connection with our third initiative (see "Transition of Chaps Brand to a Fully Licensed Business Model" further below for additional discussion).
Later, on February 3, 2021, our Board of Directors approved additional actions related to our real estate initiative. Specifically, we are in the process of further rightsizing and consolidating our global corporate offices to better align with our organizational profile and new ways of working. We also have closed, and expect to continue to close, certain of our stores to improve overall profitability. Additionally, we plan to complete the consolidation of our North America distribution centers in order to drive greater efficiencies, improve sustainability, and deliver a better consumer experience.
Finally, on June 26, 2021, in connection with our brand portfolio initiative, we sold our Club Monaco business to Regent, L.P. ("Regent"), a global private equity firm, with no resulting gain or loss on sale realized during the first quarter of Fiscal 2022. Regent acquired Club Monaco's assets and liabilities in exchange for potential future cash consideration payable by Regent, including earn-out payments based on Club Monaco meeting certain defined revenue thresholds over a five-year period. Accordingly, we may realize amounts in the future related to the receipt of such contingent consideration. Additionally, in connection with this divestiture, we are providing Regent with certain operational support for a transitional period of up to 12 months, varying by functional area.
In connection with these collective realignment initiatives, we expect to incur total estimated pre-tax charges of approximately $300 million to $350 million. Cumulative charges incurred since inception were $260.5 million, of which $23.7 million and $204.3 million were recorded during the nine-month periods ended December 25, 2021 and December 26, 2020, respectively. Once substantially completed by the end of our 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 is being reinvested back into the business.
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 Fully Licensed Business 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, which took effect on August 1, 2021 following 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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Global Economic Conditions and Industry Trends
The global economy and ourretail industry are impacted by many different influences. Most recently, the U.S. enacted new tax legislation known as the TCJA (as definedfactors. 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.economy, as well as significant volatility in global financial markets. As our international business continues to grow,discussed in "Recent Developments," governments worldwide have periodically imposed varying degrees of preventative and becauseprotective actions throughout the majority of our products are produced outsidecourse of the U.S., majorpandemic, 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 tax policies oreconomy since the outbreak of the pandemic. Despite the introduction of COVID-19 vaccines and recent improvements in the global economy as a whole, resurgences and outbreaks continue to occur in certain geographic locations, including those resulting from variants of the virus, such as the Delta and Omicron variants. Accordingly, it is not clear at this time how much longer and to what extent the pandemic will last.
The global economy has also been impacted by the domestic and international political environment, including volatile international trade relations could have a material adverse effect on our business or operating results. Our results also have been, and are expectedcivil and political unrest taking place in certain parts of the world. The U.S. in particular has experienced civil unrest centered around racial inequality and political allegiances. Additionally, the United Kingdom recently withdrew from the European Union, commonly referred to continueas "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 resulted in new tariffs on goods imported to the United Kingdom from the European Union that were manufactured elsewhere, as well as additional administrative effort to import and export goods, adding friction and cost to transportation. Further, certain other worldwide events and factors, including diplomatic tensions between the U.S. and other countries, acts of terrorism, taxation or monetary policy changes, inflation, fluctuations in commodity prices, and rising healthcare costs, also increase volatility in the global economy.

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In addition, theThe retail landscape in which we operate is evolving, withhas been significantly disrupted by the COVID-19 pandemic, including periods of 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 andhad been increasingly shifting their shopping preference from physical stores to online. This along with other factors,shift in preference has resultedaccelerated 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, becominghave been highly promotional and have aggressively markingmarked 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 of our operations, including our North America wholesale business, have been negatively impacted by these dynamics.Despite recent improvements in the global economy, supply chain-related risks continue to exist as manufacturers and transportation providers alike are finding it difficult to meet increased consumer demand. 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 connectionresponse to the COVID-19 pandemic, during the prior fiscal year we took preemptive actions to preserve cash and strengthen our liquidity position, as described in our Fiscal 2021 10-K, which better enabled us to continue to execute upon our long-term growth strategy despite unfavorable economic conditions. Investing in our digital ecosystem remains a primary focus and is a key component of our integrated global omni-channel strategy and driving consumer engagement, particularly in light of the current COVID-19 pandemic, which has and could continue to reshape consumer shopping preferences. We continue to scale and expand our Connected Retail capabilities to enhance the consumer experience, which now include virtual selling appointments, Buy Online-Pick Up in Store, and mobile checkout and contactless payments, among other capabilities. In addition, we recently launched our first-ever, full-catalog Ralph Lauren mobile shopping app. We also continue to drive consumer engagement and global brand awareness through our sports sponsorships, which most recently include the U.S. Open Tennis Championships and Team U.S.A. in both the Ryder Cup and the Tokyo Olympics, as well as through our special product releases and limited collections. Additionally, we have accelerated our marketing investments, with these strategies, we are takinga focus on supporting new customer acquisition, digitally-amplified brand campaigns, and resumption of in-store programs as markets continue to reopen worldwide. We also continue to take deliberate actions to ensure promotional consistency across channels and to enhance the overall brand and shopping experience, including reducingbetter aligning shipments to better alignand inventory levels with underlying demand and lower inventory levels. Additionally, we aredemand. We also remain committed to optimizing our wholesale distribution channel by closing 20%and enhancing our department store consumer experience. In connection with our long-term brand elevation strategy, we successfully transitioned our Chaps business to 25%a fully licensed business model during the second quarter of Fiscal 2022 as planned and completed the sale of our underperforming U.S. department store points of distribution byClub Monaco business at the end of the first quarter of Fiscal 2018. Further, in October 2017, we began2022, thereby enabling our teams to shift to a more cost-effective and flexible e-commerce platform forfocus our directly operated digital businesses, which is expected to deliver a more brand-enhancing and consistent customer experience acrossresources on 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.core brands.
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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 impactimpacts 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.2021 10-K.
Summary of Financial Performance
Operating Results
During the three months ended December 30, 2017,25, 2021, we reported net revenues of $1.642$1.815 billion, net income of $217.7 million, and net income per diluted share of $2.93, as compared to net revenues of $1.433 billion, a net income of $119.8 million, and net income per diluted share of $1.61 during the three months ended December 26, 2020. During the nine months ended December 25, 2021, we reported net revenues of $4.696 billion, net income of $575.7 million, and net income per diluted share of $7.68, as compared to net revenues of $3.114 billion, a net loss of $81.8$47.0 million, and net loss per diluted share of $1.00, as compared to net revenues of $1.715 billion, net income of $81.3 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$0.64 during the nine months ended December 31, 2016.26, 2020. 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,adverse impacts related to COVID-19 business disruptions, as well as net restructuring-related charges, impairment of assets, and certain other charges,benefits (charges), including one-time tax events, as discussed further below.
Our operating performance for the three-month and nine-month periods ended December 30, 201725, 2021 reflected declines in net revenuesrevenue increases of 4.2%26.7% and 8.5%50.8%, respectively, on a reported basis and 6.1%28.2% and 8.9%50.1%, respectively, on a constant currency basis, as defined within "Transactions and Trends Affecting Comparability of Results of Operations and Financial Condition"below. The declinesincrease in reported net revenues for the three-month and nine-month periods ended December 30, 2017 were primarily due to lower sales from our North America segmentreflected growth across all regions largely driven by a reduction in store closures and other COVID-19-related business disruptions experienced during the impactcurrent fiscal year periods as compared to the comparable prior fiscal year periods, coupled with continued growth in our digital commerce operations and overall stronger consumer demand. This growth was partially offset by the disposition of our qualityClub Monaco business at the end of distributionthe first quarter of Fiscal 2022 and sales initiatives, including lower levelsthe transition of promotional activity andour Chaps business to a strategic reduction in shipments, as well as brand discontinuances and lower consumer demand.fully licensed business model during the second quarter of Fiscal 2022.
Our gross profit as a percentage of net revenues increased by 340110 basis points to 60.7% during both the three monthsthree-month and nine-month periods ended December 30, 2017,25, 2021 to 66.0% and by 540 basis points to 61.1% during the nine months ended December 30, 2017. These increases were67.8%, respectively, primarily driven by improved product mix, pricing, and lower levels of promotional activity, in connection with our long-term growth strategy, favorablepartially offset by higher product costs and the absence of unusual geographic and channel mix and lower sourcing costs, as well as lower non-cash inventory-related charges recordedbenefits experienced during the prior fiscal year periods in connection with the Way Forward Plan.

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COVID-19-related business disruptions in North America and Europe.
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, and25, 2021 declined by 130210 basis points to 48.3%50.1% and declined by 960 basis points to 50.9% during the nine months ended December 30, 2017. These increases were25, 2021, primarily due todriven by operating deleverageleverage on lowerhigher 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 savings associatedhigher expenses across various categories to drive strategic growth, coupled with our restructuring activities.the return to more normalized operations in comparison to the prior fiscal year periods.
Net income decreasedincreased by $163.1$97.9 million to $217.7 million during the three months ended December 30, 2017 to a loss of $81.8 million25, 2021 as compared to the three months ended December 31, 2016,26, 2020, primarily due to a $226.3$118.7 million increase in our operating income, partially offset by a $17.1 million increase in our income tax provision largelyprovision. Net income per diluted share increased by $1.32 to $2.93 per share during the three months ended December 25, 2021 driven by one-time charges recorded in connection with the TCJA, partially offset by a $60.9 million increase in operatinghigher level of net income. Net income increased by $16.8$622.7 million to $575.7 million during the nine months ended December 30, 2017 to $121.5 million25, 2021 as compared to the nine months ended December 31, 2016,26, 2020, primarily due to a $299.4$779.5 million increase in our operating income, partially offset by a $283.9$142.1 million increase in our income tax provision largely driven by one-time charges recorded in connection with the TCJA.
Net income per diluted share declined by $1.98 to a loss of $1.00 per share during the three months ended December 30, 2017, due to the lower level of net income and lower weighted-average diluted shares outstanding.provision. Net income per diluted share increased by $0.22$8.32 to $1.47$7.68 per share during the nine months ended December 30, 2017, due to25, 2021 driven by the higher 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. Our operating results during the three-month and nine-month periods ended December 30, 201725, 2021 and December 26, 2020 were also negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $27.2$0.1 million and $104.8$19.5 million, respectively, which had an after-tax effect of reducing net income by $17.9$0.4 million, or $0.23$0.01 per diluted share, and $69.8$16.6 million, or $0.85$0.22 per diluted share, respectively. Our operating resultsNet income during the three-month andthree months ended December 26, 2020 also reflected incremental net tax expense of $11.8 million, or $0.15 per diluted share, recorded in connection with one-time income tax events.
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During the nine-month periods ended December 31, 201625, 2021 and December 26, 2020, our operating results were negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $91.4$15.2 million and $400.0$184.6 million, respectively, which had an after-tax effect of reducing net income by $73.6$11.8 million, or $0.88$0.15 per diluted share, and $298.0$151.6 million, or $3.57$2.03 per diluted share, respectively. Our net loss during the nine months ended December 26, 2020 also reflected incremental net tax expense of $5.9 million, or $0.08 per diluted share, recorded in connection with one-time income tax events.
Financial Condition and Liquidity
We ended the third quarter of Fiscal 20182022 in a net cash and investments position (cash and cash equivalents plus short-term and non-current investments, less total debt) of $1.533$1.352 billion, as compared to $786.2 million$1.144 billion as of the end of Fiscal 2017.2021. The increase in our net cash and investments position at December 30, 201725, 2021 as compared to April 1, 2017March 27, 2021 was primarily due to our operating cash flows of $951.1$821.7 million, partially offset by our use of cash to support Class A common stock repurchases of $340.4 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $123.0$113.6 million in capital expenditures, and to make dividend payments of $121.7$101.1 million.
We generated $951.1 million ofNet cash from operations during the nine months ended December 30, 2017, compared to $850.7provided by operating activities was $821.7 million during the nine months ended December 31, 2016.25, 2021, as compared to $334.6 million during the nine months ended December 26, 2020. The net increase in ourcash provided by operating cash flowsactivities was due to an increase in net income before non-cash charges, partially offset by a net favorableunfavorable 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 to $3.408$2.723 billion as of December 30, 201725, 2021 compared to $3.300$2.604 billion as of April 1, 2017, primarily attributableMarch 27, 2021, due to our comprehensive income and the net impact of stock-based compensation arrangements, partially offset by our share repurchase activity and dividends declared during the nine months ended December 30, 2017.
Recent Developments
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.
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

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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.25, 2021.
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, 201725, 2021 and December 31, 201626, 2020 has been affected by restructuring-relatedcertain events, including:
•pretax charges impairment of assets, andincurred 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 EndedNine Months Ended
 December 30,
2017		 December 31,
2016		 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020		December 25,
2021		December 26,
2020
 (millions) (millions)
Impairment of assets (see Note 7) $(3.9) $(10.3) $(24.8) $(56.7)Impairment of assets (see Note 7)$— $(2.6)$(19.3)$(35.7)
Restructuring and other charges (see Note 8) (23.3) (66.7) (78.7) (193.9)
Restructuring-related inventory charges (see Note 8)(a)
 —
 (14.4) (1.3) (149.4)
Restructuring and other charges, net (see Note 8)Restructuring and other charges, net (see Note 8)(0.2)(9.9)(8.6)(177.4)
Non-routine inventory benefits (charges), net(a)
Non-routine inventory benefits (charges), net(a)
— (7.0)11.5 (2.9)
COVID-19-related bad debt expense reversals(b)
COVID-19-related bad debt expense reversals(b)
0.1 — 1.2 31.4 
Total charges $(27.2) $(91.4) $(104.8) $(400.0)Total charges$(0.1)$(19.5)$(15.2)$(184.6)
(a)
Non-cash restructuring-related inventory charges
(a)Non-routine inventory benefits (charges) are recorded within cost of goods sold in the consolidated statements of operations.
Additionally, during the third quarterconsolidated statements of Fiscal 2018, weoperations and include reversals of amounts previously recorded one-time chargesin connection with COVID-19 business disruptions.
(b)COVID-19-related bad debt expense reversals are recorded within SG&A expenses in the consolidated statements of $231.3operations.
•incremental net tax expense of $11.8 million and $5.9 million recorded within our income tax provision in connection with the TCJA, which 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. See Note 926, 2020, respectively, related to a valuation allowance provided against domestic losses attributable to COVID-19 business disruptions, international tax legislation enacted in connection with the accompanying consolidated financial statements for further discussionEuropean Union's anti-tax avoidance directive, and a net operating loss carryback under the CARES Act, which collectively increased and decreased our effective tax rate by 720 basis points and 1,480 basis points, respectively;
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•other adverse impacts related to COVID-19 business disruptions during the three-month and nine-month periods ended December 25, 2021 and December 26, 2020; and
•the disposition of our Club Monaco business at the end of the TCJA.first quarter of Fiscal 2022 and the transition of our Chaps business to a fully licensed business model during the second quarter of Fiscal 2022.
SinceBecause we are a global company, the comparability of our operating results reported in U.S. Dollars is also affected by foreign currency exchange rate fluctuations because the underlying currencies in which we transact change in value over time compared to the U.S. Dollar. These rateSuch fluctuations can have a significant effect on our reported results. As such, in addition to financial measures prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"), our discussions often contain references to constant currency measures, which are calculated by translating the current-year and prior-year reported amounts into comparable amounts using a single foreign exchange rate for each currency. We present constant currency financial information, which is a non-U.S. GAAP financial measure, as a supplement to our reported operating results. We use constant currency information to provide a framework to assessfor assessing how our businesses performed excluding the effects of foreign currency exchange rate fluctuations. We believe this information is useful to investors to facilitatefor facilitating comparisons of operating results and better identifyidentifying trends in our businesses. The constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with U.S. GAAP. Reconciliations between this non-U.S. GAAP financial measure and the most directly comparable U.S. GAAP measure are included in the "Results of Operations" section where applicable.
Our discussion also includes reference to comparable store sales. Comparable store sales refer to the growthchange in sales of sales inour stores that arehave been open for at least one13 full fiscal year.months. Sales from our digital commerce sites are also included within comparable sales for those geographies that have been serviced by the related site for at least 13 full fiscal months. Sales for stores or digital commerce sites that are closed or shut down during a fiscalthe year are excluded from the calculation of comparable store sales. Sales for stores that are either relocated, enlarged (as defined by gross square footage expansion of 25% or greater), or generally closed for 30 or more consecutive days for renovation are also excluded from the calculation of comparable store sales until such stores have been operating in their new location or in their newly renovated state for at least one13 full fiscal year. Sales from our e-commerce sites are included withinmonths. All comparable store sales for those geographies that have been serviced by the related site for at least one full fiscal year. Sales for e-commerce sites thatmetrics are shut down duringcalculated on a fiscal year are excluded from the calculation of comparable store sales. We use an integrated omni-channel strategy to operate our retail business, in which our e-commerce operations are interdependent with our physical stores.constant currency basis.
Our "Results of Operations" discussion that follows includes the significant changes in operating results arising from these items affecting comparability. However, unusual items or transactions may occur in any period. Accordingly, investors and other financial statement users should consider the types of events and transactions that have affected operating trends.

4648


RESULTS OF OPERATIONS
Three Months Ended December 30, 201725, 2021 Compared to Three Months Ended December 31, 201626, 2020
The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions. All percentages shown in the below table and the discussion that follows have been calculated using unrounded numbers.
  Three Months Ended    
  December 30,
2017		 December 31,
2016		 
$
Change
 
% / bps
Change
  (millions, except per share data)  
Net revenues $1,641.8
 $1,714.6
 $(72.8) (4.2%)
Cost of goods sold(a) 
 (645.6) (731.4) 85.8
 (11.7%)
Gross profit 996.2
 983.2
 13.0
 1.3%
Gross profit as % of net revenues 60.7% 57.3%   340 bps
Selling, general, and administrative expenses(a) 
 (773.8) (771.9) (1.9) 0.2%
SG&A expenses as % of net revenues 47.1% 45.0%   210 bps
Amortization of intangible assets (6.0) (6.0) —
 (0.6%)
Impairment of assets (3.9) (10.3) 6.4
 (62.3%)
Restructuring and other charges(a)
 (23.3) (66.7) 43.4
 (65.1%)
Operating income 189.2
 128.3
 60.9
 47.5%
Operating income as % of net revenues 11.5% 7.5%   400 bps
Foreign currency gains (losses) 0.6
 (2.7) 3.3
 (120.8%)
Interest expense (4.8) (3.6) (1.2) 37.2%
Interest and other income, net 2.8
 2.5
 0.3
 13.6%
Equity in losses of equity-method investees (1.5) (1.4) (0.1) 5.2%
Income before income taxes 186.3
 123.1
 63.2
 51.4%
Income tax provision (268.1) (41.8) (226.3) 540.9%
Effective tax rate(b)
 143.9% 34.0%   10,990 bps
Net income (loss) $(81.8) $81.3
 $(163.1) (200.7%)
Net income (loss) per common share:        
Basic $(1.00) $0.98
 $(1.98) (202.0%)
Diluted $(1.00) $0.98
 $(1.98) (202.0%)
 Three Months Ended  
 December 25,
2021		December 26,
2020		$
Change		% / bps
Change
 (millions, except per share data) 
Net revenues
$1,815.4 $1,432.8 $382.6 26.7 %
Cost of goods sold(617.3)(502.4)(114.9)22.8 %
Gross profit
1,198.1 930.4 267.7 28.8 %
Gross profit as % of net revenues66.0 %64.9 %110 bps
Selling, general, and administrative expenses(908.8)(747.5)(161.3)21.6 %
SG&A expenses as % of net revenues50.1 %52.2 %(210 bps)
Impairment of assets— (2.6)2.6 (100.0 %)
Restructuring and other charges, net(0.2)(9.9)9.7 (97.2 %)
Operating income
289.1 170.4 118.7 69.7 %
Operating income as % of net revenues15.9 %11.9 %400 bps
Interest expense(13.4)(12.2)(1.2)10.4 %
Interest income1.4 2.4 (1.0)(43.3 %)
Other income, net0.1 1.6 (1.5)(91.9 %)
Income before income taxes
277.2 162.2 115.0 70.9 %
Income tax provision(59.5)(42.4)(17.1)40.0 %
Effective tax rate(a)
21.4 %26.2 %(480 bps)
Net income
$217.7 $119.8 $97.9 81.8 %
Net income per common share:
Basic
$2.98 $1.63 $1.35 82.8 %
Diluted
$2.93 $1.61 $1.32 82.0 %
(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.
(a)Effective tax rate is calculated by dividing the income tax provision by income before income taxes.
Net Revenues.    Net revenues decreasedincreased by $72.8$382.6 million, or 4.2%26.7%, to $1.642$1.815 billion during the three months ended December 30, 201725, 2021 as compared to the three months ended December 31, 2016,26, 2020, including net favorableunfavorable foreign currency effects of $31.3$21.5 million. On a constant currency basis, net revenues decreasedincreased by $104.1$404.1 million, or 6.1%28.2%. The increase in net revenues reflected growth across all regions largely driven by a reduction in store closures and other COVID-19-related disruptions experienced during the current fiscal year period as compared to the prior fiscal year period, coupled with continued growth in our digital commerce operations and overall stronger consumer demand. This growth was partially offset by the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022 and the transition of our Chaps business to a fully licensed business model during the second quarter of Fiscal 2022.
The following table summarizes the percentage change in our consolidated comparable store sales for the three months ended December 30, 201725, 2021 as compared to the prior fiscal year period on both a reported and constant currency basis:period:
  
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 commerce33 %
Brick and mortar34 %
Total comparable store sales34 %
4749


Our global average store count decreased by 636 stores and concession shops during the three months ended December 30, 201725, 2021 compared with the three months ended December 31, 2016, primarily due to global store closures primarily associated with26, 2020, largely driven by the Way Forward Plan, largelysale of our Club Monaco business on June 26, 2021, partially offset by new concession shop openings in Asia. The following table details our retail store presence by segment as of the periods presented:
 December 30,
2017		 December 31,
2016		 December 25,
2021		December 26,
2020
Freestanding Stores:    Freestanding Stores:
North America 218
 222
North America239 232 
Europe 82
 87
Europe97 96 
Asia 103
 93
Asia169 147 
Other non-reportable segments 78
 83
Other non-reportable segments— 73 
Total freestanding stores 481
 485
Total freestanding stores505 548 
    
Concession Shops:    Concession Shops:
North America 2
 1
North America1 2 
Europe 25
 34
Europe29 29 
Asia 599
 598
Asia646 625 
Other non-reportable segments 2
 2
Other non-reportable segments— 4 
Total concession shops 628
 635
Total concession shops676 660 
Total stores 1,109
 1,120
Total stores1,181 1,208 
In addition to our stores, we sell products online in North America, Europe, and EuropeAsia through our various e-commercedigital commerce sites, which include www.RalphLauren.comas well as through our Polo mobile app in North America and www.ClubMonaco.com, among others. In Asia, wethe United Kingdom. We also sell products online through e-commerce sites of various third-party digital partners.partner commerce sites, primarily in Asia.
Net revenues for our segments, as well as a discussion of the changes in each reportable segment's net revenues from the comparable prior fiscal year period, are provided below:
 Three Months Ended$ ChangeForeign Exchange Impact$ Change% Change
 December 25,
2021		December 26,
2020		As
Reported		Constant
Currency		As
Reported		Constant
Currency
 (millions) 
Net Revenues:
North America$928.7 $715.4 $213.3 $1.2 $212.1 29.8 %29.6 %
Europe462.9 315.6 147.3 (10.3)157.6 46.6 %49.9 %
Asia382.6 329.6 53.0 (12.4)65.4 16.1 %19.8 %
Other non-reportable segments(a)
41.2 72.2 (31.0)— (31.0)(42.9 %)(42.9 %)
Total net revenues$1,815.4 $1,432.8 $382.6 $(21.5)$404.1 26.7 %28.2 %
  Three Months Ended $ Change Foreign Exchange Impact $ Change % Change
  December 30,
2017		 December 31,
2016		 
As
Reported
  
Constant
Currency
 
As
Reported
 
Constant
Currency
  (millions)    
Net Revenues:              
North America $886.4
 $1,000.8
 $(114.4) $1.3
 $(115.7) (11.4%) (11.6%)
Europe 378.5
 349.2
 29.3
 28.1
 1.2
 8.4% 0.3%
Asia 251.0
 235.2
 15.8
 0.3
 15.5
 6.7% 6.6%
Other non-reportable segments 125.9
 129.4
 (3.5) 1.6
 (5.1) (2.7%) (4.0%)
Total net revenues $1,641.8
 $1,714.6
 $(72.8) $31.3
 $(104.1) (4.2%) (6.1%)
(a)Reflects the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022.
North America net revenues — Net revenues decreasedincreased by $114.4$213.3 million, or 11.4%29.8%, during the three months ended December 30, 201725, 2021 as compared to the three months ended December 31, 2016, including net favorable foreign currency effects of $1.3 million.26, 2020. On a constant currency basis, net revenues decreasedincreased by $115.7$212.1 million, or 11.6%29.6%.
The $114.4$213.3 million net declineincrease in North America net revenues was driven by:
•a $66.6$185.4 million net decreaseincrease related to our North America wholesaleretail business, largely driven byreflecting a strategic reduction of shipments (including within the off-price channel)in store closures and points of distribution in connection with our long-term growth strategy, the impact of brand discontinuances,other COVID-19-related disruptions and the continued challenging department store traffic trends; and

48

growth in our digital commerce operations. On a $48.2constant currency basis, net revenues increased by $184.5 million, net decreasereflecting increases of $170.1 million in comparable store sales primarily driven by lower sales from our Ralph Lauren e-commerce operations and certain of our retail stores due$14.4 million in part to a decline in traffic, as well as lower levels of promotional activity and a planned reduction in inventory in connection with our long-term growth strategy.non-comparable store sales. The following table summarizes the percentage change in comparable store sales related to our North America retail business on both a reported and constant currency basis:business:
  
As
Reported
 
Constant
Currency
E-commerce comparable store sales (27%) (27%)
Comparable store sales excluding e-commerce (3%) (3%)
Total comparable store sales (10%) (10%)
These decreases were
50

% Change
Digital commerce32 %
Brick and mortar40 %
Total comparable store sales38 %
•a $27.9 million net increase related to our North America wholesale business, driven by minimal shipments during the comparable prior fiscal year period due to significant COVID-19-related business disruptions, coupled with overall stronger consumer demand. This growth was partially offset by the transition of our Chaps business to a $0.4 million net increase in non-comparable store sales.fully licensed business model during the second quarter of Fiscal 2022, as well as other strategic resets within our wholesale distribution channel.
Europe net revenues — Net revenues increased by $29.3$147.3 million, or 8.4%46.6%, during the three months ended December 30, 201725, 2021 as compared to the three months ended December 31, 2016, including26, 2020. On a constant currency basis, net favorablerevenues increased by $157.6 million, or 49.9%.
The $147.3 million net increase in Europe net revenues was driven by:
•an $80.5 million net increase related to our Europe retail business, reflecting a reduction in store closures and other COVID-19-related disruptions and the continued growth in our digital commerce operations, partially offset by net unfavorable foreign currency effects of $28.1$5.8 million. On a constant currency basis, net revenues increased by $1.2$86.3 million, or 0.3%.
The $29.3reflecting increases of $84.0 million net increase in Europe net revenues was driven by:
a $21.9 million net increase related to our Europe wholesale business, primarily driven by net favorable foreign currency effects of $11.7 million and a shift in the timing of certain shipments that occurred during the prior fiscal year period; and
an $8.8 million net increase in non-comparable store sales, primarily driven by new store openings and net favorable foreign currency effects of $3.9 million.
These increases were partially offset by:
a $1.4 million net decrease in comparable store sales including net favorable foreign currency effects of $12.5 million. Our comparableand $2.3 million in non-comparable store sales decreased by $13.9 million on a constant currency basis, primarily driven by lower sales from certain of our retail stores due in part to lower levels of promotional activity in connection with our long-term growth strategy.sales. The following table summarizes the percentage change in comparable store sales related to our Europe retail business:
% Change
Digital commerce27 %
Brick and mortar68 %
Total comparable store sales55 %
•a $66.8 million net increase related to our Europe wholesale business on both a reportedlargely driven by minimal shipments during the comparable prior fiscal year period due to significant COVID-19-related business disruptions and constantoverall stronger consumer demand, partially offset by net unfavorable foreign currency basis:effects of $4.5 million.
  
As
Reported
 
Constant
Currency
E-commerce comparable store sales 8% (1%)
Comparable store sales excluding e-commerce (2%) (9%)
Total comparable store sales (1%) (8%)
Asia net revenues — Net revenues increased by $15.8$53.0 million, or 6.7%16.1%, during the three months ended December 30, 201725, 2021 as compared to the three months ended December 31, 2016, including26, 2020. On a constant currency basis, net favorablerevenues increased by $65.4 million, or 19.8%.
The $53.0 million net increase in Asia net revenues was driven by:
•a $50.5 million net increase related to our Asia retail business, reflecting a reduction in store closures and other COVID-19-related disruptions and the continued growth in our digital commerce operations, partially offset by net unfavorable foreign currency effects of $0.3$11.8 million. On a constant currency basis, net revenues increased by $15.5$62.3 million, or 6.6%.
The $15.8reflecting increases of $38.1 million net increase in Asia net revenues was driven by:
a $5.8 million net increase in non-comparable store sales, primarily driven by new concession shop openings and net favorable foreign currency effects of $0.4 million, partially offset by the strategic closure of certain of our retail stores;
a $5.7 million net increase related to our Asia wholesale business, primarily driven by our expansion in Japan and net favorable foreign currency effects of $0.1 million; and
a $4.3 million net increase in comparable store sales including net unfavorable foreign currency effects of $0.2 million. Our comparableand $24.2 million in non-comparable store sales increased by $4.5 million on a constant currency basis, primarily driven by higher sales from certain of our retail locations due in part to improved conversion, partially offset by the impact of lower levels of promotional activity in connection with our long-term growth strategy.sales. The following table summarizes the percentage change in comparable store sales related to our Asia retail business on both business:
% Change
Digital commerce64 %
Brick and mortar12 %
Total comparable store sales14 %
•a reported and constant currency basis:

$2.5 million net increase related to our Asia wholesale business.
4951


  
As
Reported
 
Constant
Currency
Total comparable store sales(a)
 3% 3%
(a)
Comparable store sales for our Asia segment were comprised primarily of sales made through our stores and concession shops.
Gross Profit.    Gross profit increased by $13.0$267.7 million, or 1.3%28.8%, to $996.2 million$1.198 billion for the three months ended December 30, 2017. Gross profit during the three months ended December 31, 2016 reflected non-cash inventory-related charges of $14.4 million recorded in connection with the Way Forward Plan. The increase in gross profit also included a25, 2021, including net favorableunfavorable foreign currency effecteffects of $23.7$19.2 million. Gross profit as a percentage of net revenues increased to 60.7%66.0% for the three months ended December 30, 201725, 2021 from 57.3%64.9% for the three months ended December 31, 2016.26, 2020. The 340110 basis point increase was primarily driven by improved product mix, pricing, and lower levels of promotional activity, in connection with our long-term growth strategy, favorablepartially offset by higher product costs and the absence of unusual geographic and channel mix and lower sourcing costs, as well asbenefits experienced during the absence of non-cash inventory-related charges recordedprior fiscal year period in connection with the Way Forward Plan during the three months ended December 30, 2017 as compared to the comparable prior year period.COVID-19-related business disruptions in North America and Europe.
Gross profit as a percentage of net revenues is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, pricing, the timing and level of promotional activities, foreign currency exchange rates, and fluctuations in material costs. These factors, among others, may cause gross profit as a percentage of net revenues to fluctuate from period to period.
Selling, General, and Administrative Expenses.    SG&A expenses primarily include costs relating to compensation and benefits, advertising and marketing, rent and occupancy, distribution, information technology, legal, depreciation and amortization, bad debt, information technology, facilities, legal, and other costs associated with financeselling and administration.administrative costs. SG&A expenses increased by $1.9$161.3 million, or 0.2%21.6%, to $773.8$908.8 million for the three months ended December 30, 2017. This increase included a25, 2021, including net unfavorablefavorable foreign currency effecteffects of $12.3$9.6 million. The increase in SG&A expenses reflects a reduction in the magnitude of COVID-19 business disruptions and our related mitigating actions, which during the prior fiscal year period included (i) lower compensation-related expenses largely driven by employee terminations and COVID-19-related government subsidies and (ii) lower rent and occupancy costs largely driven by reduced percentage-of-sales-based rent due to widespread store closures and a reduction in traffic, as well as rent abatements negotiated with certain of our landlords. The increase in SG&A expenses also reflects our investments to drive strategic growth, including our marketing and advertising initiatives, partially offset by expense savings associated with the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022. SG&A expenses as a percentage of net revenues increaseddeclined to 47.1%50.1% for the three months ended December 30, 201725, 2021 from 45.0%52.2% for the three months ended December 31, 2016.26, 2020. The 210 basis point increase improvement was primarily due to operating deleverageleverage on lowerhigher net revenues, as previously discussed, 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 partially offset by our operational discipline and cost savings associatedhigher expenses across various categories to drive strategic growth, coupled with our restructuring activities.the return to more normalized operations in comparison to the prior fiscal year period.
The $1.9$161.3 million net increase in SG&A expenses was driven by:
  
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
During the fourth quarter of Fiscal 2018, we continue to expect a certain amount of operating expense deleverage driven by the anticipated decline in sales associated with our quality of sale initiatives outpacing the decline in our operating expenses, as we anniversary certain cost savings initiatives executed during Fiscal 2017 in connection with the Way Forward Plan. In addition, we will continue to invest in our key strategic initiatives, including our marketing and advertising programs, as well as expansion and renovations of our retail stores and concession shops.
Amortization of Intangible Assets.    Amortization of intangible assets remained flat at $6.0 million during the three-month periods ended December 30, 2017 and December 31, 2016.

Three Months Ended December 25, 2021
Compared to
Three Months Ended December 26, 2020
50(millions)
SG&A expense category:
Marketing and advertising expenses$64.0 
Compensation-related expenses41.8 
Selling-related expenses23.6 
Rent and occupancy expenses11.0 
Shipping and handling costs10.3 
Bad debt expense(6.9)
Other17.5 
Total increase in SG&A expenses$161.3 

Impairment of Assets. No non-cash impairment charges were recorded during the three months ended December 25, 2021. On a comparative basis, during the three months ended December 26, 2020, we recorded non-cash impairment charges of $2.6 million to write-down certain long-lived assets.
Restructuring and Other Charges, Net. During the three-month periods ended December 30, 201725, 2021 and December 31, 2016,26, 2020, we recorded non-cash impairmentrestructuring charges of $2.2$1.9 million and $10.3$8.9 million, respectively, to write off certain fixed assetsconsisting of severance and benefit costs and other cash charges, as well as other charges of $1.4 million and $1.0 million, respectively, primarily related to our domesticrent and international stores, shop-within-shops, and corporate offices in connectionoccupancy costs associated with certain previously exited real estate locations for which the Way Forward Plan. related lease agreements have not yet expired. Additionally, during the three months ended December 30, 2017,25, 2021, we recorded non-cash impairment chargesrecognized $3.1 million of $1.7 million to write off certain fixed assetsincome primarily related to underperforming shop-within-shops as a resultcertain revenue share clause in our agreement with Regent for the sale of our on-going store portfolio evaluation. See Note 7Club Monaco that entitled us to receive a
52

portion of the accompanying consolidated financial statements.
Restructuring and Other Charges. Duringsales generated by the three-month periods ended December 30, 2017 and December 31, 2016, we recorded restructuring charges of $19.8 million and $66.7 million, respectively, in connection with the Way Forward Plan, consisting of severance and benefit costs, lease termination and store closure costs, other cash charges, and non-cash accelerated stock-based compensation expense. In addition,Club Monaco business during the three months ended December 30, 2017, we recorded other charges of $3.5 million related to depreciation expense associated with our 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.a four-month business transition period. See Note 8 to the accompanying consolidated financial statements.
Operating Income.    Operating income increased by $118.7 million, or 69.7%, to $189.2$289.1 million for the three months ended December 30, 2017, from $128.3 million for25, 2021, reflecting the three months ended December 31, 2016.return to more normalized operations in comparison to the prior fiscal year period, as previously discussed, as well as net unfavorable foreign currency effects of $9.6 million. Our operating results during the three-month periods ended December 30, 201725, 2021 and December 31, 2016 26, 2020 were also negatively impacted by restructuring-related charges,net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $27.2$0.1 million and $91.4$19.5 million, respectively, as previously discussed. The increase in operating income also included a net favorable foreign currency effect of $11.4 million.respectively. Operating income as a percentage of net revenues increased to 11.5%was 15.9% for the three months ended December 30, 2017 from 7.5% for the three months ended December 31, 2016. The25, 2021, reflecting a 400 basis point increase from the prior fiscal year period. The increase in operating income as a percentage of net revenues was primarily driven by thelower net decline in restructuring-related charges,charges, impairment of assets, and certain other charges and(benefits) recorded during the increase in our gross profit margin, partially offset bythree months ended December 25, 2021 as compared to the increaseprior fiscal year period, the decrease in SG&A expenses as a percentage of net revenues, and the increase in our gross margin, all as previously discussed.
Operating income (loss) and margin for our segments, as well as a discussion of the changes inin each reportable segment's operating margin from the comparable prior fiscal year period, are provided below:
 Three Months Ended  
December 25, 2021December 26, 2020  
Operating
Income		Operating
Margin		Operating
Income		Operating
Margin		$
Change		Margin
Change
(millions) (millions) (millions) 
Segment:
North America$229.6 24.7%$166.1 23.2%$63.5 150 bps
Europe97.1 21.0%54.1 17.1%43.0 390 bps
Asia85.6 22.4%69.4 21.1%16.2 130 bps
Other non-reportable segments(a)
38.5 93.4%21.5 29.8%17.0 6,360 bps
450.8 311.1 139.7 
Unallocated corporate expenses(161.5)(130.8)(30.7)
Unallocated restructuring and other charges, net(0.2)(9.9)9.7 
Total operating income$289.1 15.9%$170.4 11.9%$118.7 400 bps
  Three Months Ended    
 December 30, 2017 December 31, 2016    
 Operating
Income (Loss)		 Operating
Margin		 Operating
Income (Loss)		 Operating
Margin		 $
Change		 Margin
Change
 (millions)   (millions)   (millions)  
Segment:            
North America $196.6
 22.2% $206.4
 20.6% $(9.8) 160 bps
Europe 81.0
 21.4% 63.8
 18.3% 17.2
 310 bps
Asia 44.3
 17.6% 23.3
 9.9% 21.0
 770 bps
Other non-reportable segments 37.1
 29.5% 33.2
 25.7% 3.9
 380 bps
  359.0
   326.7
   32.3
  
Unallocated corporate expenses (146.5)   (131.7)   (14.8)  
Unallocated restructuring and other charges (23.3)   (66.7)   43.4
  
Total operating income $189.2
 11.5% $128.3
 7.5% $60.9
 400 bps
(a)Reflects the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022.
North America operating margin improved by 160150 basis points, primarily due to the net favorable impact of 200 basis points attributable to higher impairment of assets and COVID-19-related bad debt expense recorded during the three months ended December 26, 2020 as compared to the current fiscal year period. The overall improvement in operating margin also reflected the favorable impact of approximately 20 basis points related to our retail business, largely attributable to a decline in SG&A expenses as a percentage of net revenues driven by operating leverage on higher net revenues, partially offset by a decline in our gross margin. Partially offsetting these improvements in operating margin was the unfavorable impact of approximately 70 basis points related to our wholesale business, largely driven by a decline in our gross margin, partially offset by a decline in SG&A expenses as a percentage of net revenues.
Europe operating margin improved by 390 basis points, primarily due to the favorable impacts of approximately 360 basis points and 240 basis points related to our retail and wholesale businesses, respectively, both largely attributable to a decline in SG&A expenses as a percentage of net revenues driven by operating leverage on higher net revenues. The basis point improvement of our retail business also reflected an increase in our gross margin, while the improvement in our wholesale business reflected a decline in our gross margin. These improvements in operating margin were partially offset by the unfavorable impacts of 130 basis points attributable to lower favorable COVID-19-related bad debt expense reversals during the three months ended December 25, 2021 as compared to the prior fiscal year period and 80 basis points attributable to foreign currency effects.
Asia operating margin improved by 130 basis points, primarily due to the favorable impact of 80approximately 100 basis points related to our retail business, and 80 basis points related to our wholesale business, both largely driven by thean increase in our gross profit margin, partially offset by an increase in SG&A expenses as a percentage of net revenues.
Europe The remaining 30 basis point improvement in operating margin improved by 310 basis points, primarily due to the favorable impact of 180 basis points related was attributable to our wholesale business, largely driven by a decline in SG&A expenses as a percentage of net revenues. The increase also reflected favorable foreign currency effects of 50 basis points and the favorable impact of 40 basis points related to lower non-cash charges recorded in connection with the Way Forward Plan during the three months ended December 30, 2017 as compared to the prior fiscal year period. The remaining 40 basis point increase in operating margin related to our retail business, largely driven by the increase in our gross profit margin, partially offset by an increase in SG&A expenses as a percentage of net revenues.

5153


Asia operating margin improved by 770 basis points, primarily due to the favorable impact of 630 basis points related to lower non-cash charges recorded in connection with the Way Forward Plan during the three months ended December 30, 2017 as compared to the prior fiscal year period, as well as favorable foreign currency effects of 130 basis points. The increase also reflected the favorable impact of 30 basis points related to our retail business, primarily driven by the increase in our gross profit margin, partially offset by an increase in SG&A expenses as a percentage of net revenues. These increases in operating margin were partially offset by a 20 basis point decline related to our wholesale business.
Unallocated corporate expenses increased by $14.8$30.7 million to $146.5$161.5 million during the three months ended December 30, 201725, 2021. The increase in unallocated corporate expenses was due to higher compensation-related expenses of $8.4 million, higher marketing and advertising expenses of $2.5$15.4 million, higher impairmentcompensation-related expenses of asset charges of $1.7$12.6 million, and higher other expenses of $2.2 million.$10.8 million, partially offset by higher intercompany sourcing commission income of $8.1 million (which is offset at the segment level and eliminates in consolidation).
Unallocated restructuring and other charges, net decreased by $43.4$9.7 million to $23.3$0.2 million during the three months ended December 30, 2017,25, 2021, as previously discussed above and in Note 8 to the accompanying consolidated financial statements.
Non-operating Expense, net. Income (Expense), Net. Non-operating expense,income (expense), net is comprised of interest expense, interest income, and other income (expense), net, which includes foreign currency gains (losses), interestequity in income (losses) from our equity-method investees, and other non-operating expenses. During the three-month periods ended December 25, 2021 and December 26, 2020, we reported non-operating expense, interestnet, of $11.9 million and $8.2 million, respectively. The $3.7 million increase in non-operating expense, net was driven by:
•a $1.5 million decline in other income, net, and equity in losses from our equity-method investees. Non-operating expense,primarily driven by lower net decreased by $2.3 million to $2.9 millionforeign currency gains during the three months ended December 30, 201725, 2021 as compared to the three months ended December 31, 2016, as the increases in foreign currency gains and interest and other income, net were partially offset by the increasesprior fiscal year period;
•a $1.2 million increase in interest expense, primarily driven by our finance leases; and equity
•a $1.0 million decline in losses of equity-method investees.interest income, primarily driven by lower interest rates in financial markets.
Income Tax Provision.    The income tax provision represents federal, foreign, state and local income taxes. The income tax provision and effective tax rate for the three months ended December 30, 2017 were $268.1 million and 143.9%, respectively, as compared to $41.8 million and 34.0%, respectively, for the three months ended December 31, 2016. The $226.3 million increase in the income tax provision was primarily due to one-time charges of $231.3 million recorded during the third quarter of Fiscal 2018 in connection with the TCJA (as discussed within "Recent Developments"), which negatively impacted our effective tax rate by 12,410 basis points, as well as the increase in pretax income. The increase in our effective tax rate also reflected the net favorable impact of 1,420 basis points, primarily due to the tax impact of earnings in lower taxed foreign jurisdictions versus the U.S. and foreign income tax reserve releases. The effective tax rate differs from the statutory tax rate due to the effect of state and local taxes, tax rates in foreign jurisdictions, and certain nondeductible expenses. Our effective tax rate will change from period to period based on various factors including, but not limited to, the geographic mix of earnings, the timing and amount of foreign dividends, enacted tax legislation, state and local taxes, tax audit findings and settlements, and the interaction of various global tax strategies.
Net Income (Loss).    We reportedThe income tax provision and effective tax rate for the three months ended December 25, 2021 were $59.5 million and 21.4%, respectively, as compared to $42.4 million and 26.2%, respectively, for the three months ended December 26, 2020. The $17.1 million increase in our income tax provision was primarily driven by the increase in our pretax income, partially offset by a 480 basis point decline in our effective tax rate. The decline in our effective tax rate was primarily driven by the absence of incremental tax expense of $14.2 million recorded during the prior fiscal year period related to international tax legislation enacted in connection with the European Union's anti-tax avoidance directive and $6.7 million primarily due to a decrease in a net operating loss carryback under the CARES Act, partially offset by an income tax benefit of $81.8$9.1 million primarily related to a change in the valuation allowance provided against domestic losses attributable to significant COVID-19 business disruptions. Collectively, this $11.8 million of net incremental tax expense increased our prior fiscal period effective tax rate by 720 basis points. The decline in our effective tax rate during the current fiscal year period also reflected the unfavorable impact of 240 basis points primarily related to certain unfavorable permanent adjustments. See Note 9 to the accompanying consolidated financial statements.
Net Income.    Net income increased to $217.7 million for the three months ended December 30, 2017, as compared to net income of $81.325, 2021, from $119.8 million for the three months ended December 31, 2016.26, 2020. The $163.1$97.9 million decreaseincrease in net income was primarily due to the increase in our operating income, tax provision, partially offset by the increase in operatingour income as previously discussed. Net loss for the three months ended December 30, 2017 reflected one-time charges of $231.3 million recorded in connection with the TCJA,tax provision, both as previously discussed. Our operating results during the three-month periods ended December 30, 201725, 2021 and December 31, 2016 were also negatively impacted by26, 2020 included net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $27.2$0.1 million and $91.4$19.5 million, respectively, which had an after-tax effect of reducing net income by $17.9$0.4 million and $73.6$16.6 million, respectively. Net income during the three months ended December 26, 2020, also reflected $11.8 million of incremental net tax expense recorded in connection with one-time tax events, as previously discussed.
Net Income (Loss) per Diluted Share.    We reported a net loss    Net income per diluted share of $1.00increased to $2.93 for the three months ended December 30, 2017, as compared to net income per diluted share of $0.9825, 2021, from $1.61 for the three months ended December 31, 2016.26, 2020. The $1.98$1.32 per share declineincrease was due todriven by the lowerhigher level of net income, as previously discussed, and lower weighted-averagediscussed. Net income per diluted shares outstanding duringshare for the three monthsthree-month periods ended December 30, 2017 driven25, 2021 and December 26, 2020 were also negatively impacted by our$0.01 per share repurchases during the last twelve months.and $0.22 per share, respectively, as a result of net restructuring-related charges, impairment of assets, and certain other charges (benefits), as previously discussed. Net lossincome per diluted share for the three months ended December 30, 201726, 2020 was also negatively impacted by approximately $2.80$0.15 per share as a result of one-time chargesdue to incremental net tax expense recorded in connection with the TCJA,one-time tax events, as previously discussed. Net income (loss) per diluted share for the three-month periods ended December 30, 2017 and December 31, 2016 were also negatively impacted by approximately $0.23 per share and $0.88 per share, respectively, as a result of restructuring-related charges, impairment of assets, and certain other charges, as previously discussed.

5254


Nine Months Ended December 30, 201725, 2021 Compared to Nine Months Ended December 31, 201626, 2020
The following table summarizes our results of operations and expresses the percentage relationship to net revenues of certain financial statement captions. All percentages shown in the below table and the discussion that follows have been calculated using unrounded numbers.
  Nine Months Ended    
  December 30,
2017		 December 31,
2016		 
$
Change
 
% / bps
Change
  (millions, except per share data)  
Net revenues $4,653.1
 $5,087.4
 $(434.3) (8.5%)
Cost of goods sold(a) 
 (1,809.9) (2,255.4) 445.5
 (19.8%)
Gross profit 2,843.2
 2,832.0
 11.2
 0.4%
Gross profit as % of net revenues 61.1% 55.7%   540 bps
Selling, general, and administrative expenses(a) 
 (2,248.9) (2,389.9) 141.0
 (5.9%)
SG&A expenses as % of net revenues 48.3% 47.0%   130 bps
Amortization of intangible assets (18.0) (18.1) 0.1
 (0.9%)
Impairment of assets (24.8) (56.7) 31.9
 (56.3%)
Restructuring and other charges(a)
 (78.7) (193.9) 115.2
 (59.4%)
Operating income 472.8
 173.4
 299.4
 172.7%
Operating income as % of net revenues 10.2% 3.4%   680 bps
Foreign currency gains 2.4
 0.8
 1.6
 201.1%
Interest expense (14.4) (11.1) (3.3) 30.6%
Interest and other income, net 7.1
 5.7
 1.4
 23.0%
Equity in losses of equity-method investees (3.6) (5.2) 1.6
 (31.1%)
Income before income taxes 464.3
 163.6
 300.7
 183.7%
Income tax provision (342.8) (58.9) (283.9) 481.5%
Effective tax rate(b) 
 73.8% 36.0%   3,780 bps
Net income $121.5
 $104.7
 $16.8
 16.0%
Net income per common share:        
Basic $1.49
 $1.26
 $0.23
 18.3%
Diluted $1.47
 $1.25
 $0.22
 17.6%
 Nine Months Ended  
 December 25,
2021		December 26,
2020		$
Change		% / bps
Change
 (millions, except per share data) 
Net revenues
$4,695.8 $3,113.8 $1,582.0 50.8 %
Cost of goods sold(1,514.4)(1,035.3)(479.1)46.3 %
Gross profit
3,181.4 2,078.5 1,102.9 53.1 %
Gross profit as % of net revenues67.8 %66.7 %110 bps
Selling, general, and administrative expenses(2,391.9)(1,883.3)(508.6)27.0 %
SG&A expenses as % of net revenues50.9 %60.5 %(960 bps)
Impairment of assets(19.3)(35.7)16.4 (45.9 %)
Restructuring and other charges, net(8.6)(177.4)168.8 (95.1 %)
Operating income (loss)
761.6 (17.9)779.5 NM
Operating income (loss) as % of net revenues16.2 %(0.6 %)1,680 bps
Interest expense(40.3)(34.6)(5.7)16.6 %
Interest income4.4 7.5 (3.1)(41.7 %)
Other income (expense), net(0.4)5.5 (5.9)NM
Income (loss) before income taxes
725.3 (39.5)764.8 NM
Income tax provision(149.6)(7.5)(142.1)NM
Effective tax rate(a)
20.6 %(18.9 %)3,950 bps
Net income (loss)
$575.7 $(47.0)$622.7 NM
Net income (loss) per common share:
Basic
$7.82 $(0.64)$8.46 NM
Diluted
$7.68 $(0.64)$8.32 NM
(a)
Includes total depreciation expense of $201.4 million and $213.8 million for the nine-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.
(a)Effective tax rate is calculated by dividing the income tax provision by income (loss) before income taxes.
NM Not meaningful.
Net Revenues.    Net revenues decreasedincreased by $434.3 million,$1.582 billion, or 8.5%50.8%, to $4.653$4.696 billion during the nine months ended December 30, 201725, 2021 as compared to the nine months ended December 31, 2016,26, 2020, including net favorable foreign currency effects of $18.3$22.2 million. On a constant currency basis, net revenues decreasedincreased by $452.6 million,$1.560 billion, or 8.9%50.1%. The increase in net revenues reflected growth across all regions largely driven by a reduction in store closures and other COVID-19-related disruptions experienced during the current fiscal year period as compared to the prior fiscal year period, coupled with continued growth in our digital commerce operations and overall stronger consumer demand. This growth was partially offset by the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022 and the transition of our Chaps business to a fully licensed business model during the second quarter of Fiscal 2022.
The following table summarizes the percentage change in our consolidated comparable store sales for the nine months ended December 30, 201725, 2021 as compared to the prior fiscal year period on both a reported and constant currency basis:period:
  
As
Reported
 
Constant
Currency
E-commerce comparable store sales (16%) (17%)
Comparable store sales excluding e-commerce (3%) (4%)
Total comparable store sales (6%) (6%)

% Change
Digital commerce35 %
Brick and mortar48 %
Total comparable store sales45 %
5355


Our global average store count decreased by 229 stores and concession shops during the nine months ended December 30, 201725, 2021 compared with the nine months ended December 31, 2016, primarily due to global store closures primarily associated with26, 2020, largely driven by the Way Forward Plan, largelysale of our Club Monaco business on June 26, 2021, partially offset by new concession shop openings in Asia.
Net revenues for our segments, as well as a discussion of the changes in each reportable segment's net revenues from the comparable prior fiscal year period, are provided below:
 Nine Months Ended$ ChangeForeign Exchange Impact$ Change% Change
 December 25,
2021		December 26,
2020		As
Reported		Constant
Currency		As
Reported		Constant
Currency
 (millions) 
Net Revenues:
North America$2,293.9 $1,423.4 $870.5 $4.0 $866.5 61.2 %60.9 %
Europe1,313.3 795.8 517.5 15.9 501.6 65.0 %63.0 %
Asia940.7 738.1 202.6 2.2 200.4 27.4 %27.1 %
Other non-reportable segments(a)
147.9 156.5 (8.6)0.1 (8.7)(5.5 %)(5.6 %)
Total net revenues$4,695.8 $3,113.8 $1,582.0 $22.2 $1,559.8 50.8 %50.1 %
  Nine Months Ended $ Change Foreign Exchange Impact $ Change % Change
  December 30,
2017		 December 31,
2016		 
As
Reported
  
Constant
Currency
 
As
Reported
 
Constant
Currency
  (millions)    
Net Revenues:              
North America $2,471.7
 $2,901.2
 $(429.5) $1.6
 $(431.1) (14.8%) (14.9%)
Europe 1,165.0
 1,172.6
 (7.6) 28.4
 (36.0) (0.7%) (3.1%)
Asia 676.9
 662.8
 14.1
 (11.8) 25.9
 2.1% 3.9%
Other non-reportable segments 339.5
 350.8
 (11.3) 0.1
 (11.4) (3.2%) (3.2%)
Total net revenues $4,653.1
 $5,087.4
 $(434.3) $18.3
 $(452.6) (8.5%) (8.9%)
(a)Reflects the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022.
North America net revenues — Net revenues decreasedincreased by $429.5$870.5 million, or 14.8%61.2%, during the nine months ended December 30, 201725, 2021 as compared to the nine months ended December 31, 2016, including net favorable foreign currency effects of $1.6 million.26, 2020. On a constant currency basis, net revenues decreasedincreased by $431.1$866.5 million, or 14.9%60.9%.
The $429.5$870.5 million net declineincrease in North America net revenues was driven by:
•a $311.7$562.2 million net decreaseincrease related to our North America wholesaleretail business, largely driven byreflecting a strategic reduction of shipments (including within the off-price channel)in store closures and points of distribution in connection with our long-term growth strategy, the impact of brand discontinuances,other COVID-19-related disruptions and the continued challenging department store traffic trends; and
growth in our digital commerce operations. On a $115.0constant currency basis, net revenues increased by $559.5 million, net decreasereflecting increases of $516.9 million in comparable store sales primarily driven by lower sales from our Ralph Lauren e-commerce operations and certain of our retail stores due$42.6 million in part to a decline in traffic, as well as lower levels of promotional activity and a planned reduction in inventory in connection with our long-term growth strategy.non-comparable store sales. The following table summarizes the percentage change in comparable store sales related to our North America retail business on both business:
% Change
Digital commerce37 %
Brick and mortar67 %
Total comparable store sales58 %
•a reported and constant currency basis:
  
As
Reported
 
Constant
Currency
E-commerce comparable store sales (23%) (23%)
Comparable store sales excluding e-commerce (5%) (5%)
Total comparable store sales (9%) (9%)
a $2.8$308.3 million net decrease in non-comparable store sales.increase related to our North America wholesale business largely driven by minimal shipments during the comparable prior fiscal year period due to significant COVID-19-related business disruptions, coupled with overall stronger consumer demand. This growth was partially offset by the transition of our Chaps business to a fully licensed business model during the second quarter of Fiscal 2022, as well as other strategic resets within our wholesale distribution channel.
Europe net revenues — Net revenues decreasedincreased by $7.6$517.5 million, or 0.7%65.0%, during the nine months ended December 30, 201725, 2021 as compared to the nine months ended December 31, 2016, including26, 2020. On a constant currency basis, net revenues increased by $501.6 million, or 63.0%.
The $517.5 million net increase in Europe net revenues was driven by:
•a $290.1 million net increase related to our Europe wholesale business largely driven by minimal shipments during the comparable prior fiscal year period due to significant COVID-19-related business disruptions, overall stronger consumer demand, and net favorable foreign currency effects of $28.4$6.6 million; and
•a $227.4 million net increase related to our Europe retail business, reflecting a reduction in store closures and other COVID-19-related disruptions and the continued growth in our digital commerce operations, as well as net favorable foreign currency effects of $9.3 million. On a constant currency basis, net revenues decreasedincreased by $36.0$218.1 million, or 3.1%.
The $7.6reflecting increases of $204.0 million net decline in Europe net revenues was driven by:
a $26.4 million net decrease in comparable store sales including net favorable foreign currency effects of $9.3 million. Our comparable and $14.1 million in non-comparable
56

store sales decreased by $35.7 million on a constant currency basis, primarily driven by lower sales from certain of our retail stores due in part to lower levels of promotional activity in connection with our long-term growth strategy.sales. The following table summarizes the percentage change in comparable store sales related to our Europe retail business on both a reported and constant currency basis:

business:
54% Change
Digital commerce25 %
Brick and mortar63 %
Total comparable store sales52 %

  
As
Reported
 
Constant
Currency
E-commerce comparable store sales (2%) (6%)
Comparable store sales excluding e-commerce (5%) (8%)
Total comparable store sales (5%) (7%)
a $15.9 million net decrease related to our Europe wholesale business, driven by the impact of brand discontinuances and a strategic reduction of shipments within the off-price channel in connection with our long-term growth strategy, partially offset by net favorable foreign currency effects of $15.2 million.
These declines were partially offset by a $34.7 million net increase in non-comparable store sales, primarily driven by new store openings and net favorable foreign currency effects of $3.9 million.
Asia net revenues — Net revenues increased by $14.1$202.6 million, or 2.1%27.4%, during the nine months ended December 30, 201725, 2021 as compared to the nine months ended December 31, 2016, including26, 2020. On a constant currency basis, net unfavorablerevenues increased by $200.4 million, or 27.1%.
The $202.6 million net increase in Asia net revenues was driven by:
•a $185.9 million net increase related to our Asia retail business, reflecting a reduction in store closures and other COVID-19-related disruptions and the continued growth in our digital commerce operations, as well as net favorable foreign currency effects of $11.8$2.1 million. On a constant currency basis, net revenues increased by $25.9$183.8 million, or 3.9%.
The $14.1reflecting increases of $118.4 million net increase in Asia net revenues was driven by:
a $5.8 million net increase related to our Asia wholesale business, primarily driven by our expansion in Japan, partially offset by net unfavorable foreign currency effects of $0.6 million; and
a $4.8 million net increase in comparable store sales including net unfavorable foreign currency effects of $6.9 million. Our comparableand $65.4 million in non-comparable store sales increased by $11.7 million on a constant currency basis, primarily driven by higher sales from certain of our retail locations due in part to improved conversion, partially offset by the impact of lower levels of promotional activity in connection with our long-term growth strategy.sales. The following table summarizes the percentage change in comparable store sales related to our Asia retail business on both a reported and constant currency basis:
  
As
Reported
 
Constant
Currency
Total comparable store sales(a)
 1% 3%
business:
(a)
Comparable% Change
Digital commerce58 %
Brick and mortar17 %
Total comparable store sales for our Asia segment were comprised primarily of sales made through our stores and concession shops.19 %
•a $3.5$16.7 million net increase related to our Asia wholesale business, reflecting increases across all regions, most notably in non-comparable store sales, primarily driven by new store openings, partially offset by net unfavorable foreign currency effects of $4.3 million.Australia, South Korea, and Southeast Asia.
Gross Profit.    Gross profit increased by $11.2 million,$1.103 billion, or 0.4%53.1%, to $2.843$3.181 billion for the nine months ended December 30, 2017. Gross profit during the nine-month periods ended December 30, 2017 and December 31, 2016 reflected non-cash inventory-related charges of $1.3 million and $149.4 million, respectively, recorded in connection with the Way Forward Plan. The increase in gross profit also included a25, 2021, including net favorable foreign currency effecteffects of $10.4$22.9 million. Gross profit as a percentage of net revenues increased to 61.1%67.8% for the nine months ended December 30, 201725, 2021 from 55.7%66.7% for the nine months ended December 31, 2016.26, 2020. The 540110 basis point increase was primarily driven by the lower non-cash inventory-related charges recorded in connection with the Way Forward Plan during the nine months ended December 30, 2017 as compared to the comparable prior year period,improved product mix, pricing, and lower levels of promotional activity, in connection with our long-term growth strategy, favorablepartially offset by higher product costs and the absence of unusual geographic and channel mix benefits experienced during the prior fiscal year period in connection with COVID-19-related business disruptions in North America and lower sourcing costs.Europe.
Selling, General, and Administrative Expenses.    SG&A expenses decreasedincreased by $141.0$508.6 million, or 5.9%27.0%, to $2.249$2.392 billion for the nine months ended December 30, 2017. This decrease included a25, 2021, including net unfavorable foreign currency effecteffects of $1.7$14.9 million. The increase in SG&A expenses reflects a reduction in the magnitude of COVID-19 business disruptions and our related mitigating actions, which during the prior fiscal year period included (i) lower compensation-related expenses driven by employee furloughs and terminations, reduced pay for our executives, senior management team, and Board of Directors, and COVID-19-related government subsidies, and (ii) lower rent and occupancy costs largely driven by reduced percentage-of-sales-based rent due to widespread store closures and a reduction in traffic, as well as rent abatements negotiated with certain of our landlords. The increase in SG&A expenses also reflects our investments to drive strategic growth, including our marketing and advertising initiatives, and lower favorable COVID-19-related bad debt expense adjustments recorded during the nine months ended December 25, 2021 as compared to the prior fiscal year period, partially offset by expense savings associated with the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022. SG&A expenses as a percentage of net revenues increaseddeclined to 48.3%50.9% for the nine months ended December 30, 201725, 2021 from 47.0%60.5% for the nine months ended December 31, 2016.26, 2020. The 130960 basis point increaseimprovement was primarily due todriven by operating deleverageleverage on lowerhigher net revenues, as previously discussed, 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 partially offset by our operational discipline and cost savings associatedhigher expenses across various categories to drive strategic growth, coupled with our restructuring activities, as well as the favorable impact relatedreturn to Mr. Ralph Lauren electingmore normalized operations in comparison to forgo his Fiscal 2017 executive incentive bonus.

the prior fiscal year period.
5557


The $141.0$508.6 million net declineincrease in SG&A expenses was driven by:
  
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)
(a)
Includes the favorable impact of $7.6 million relatedNine Months Ended December 25, 2021
Compared to Mr. Ralph Lauren electing to forgo his Fiscal 2017 executive incentive bonus.
Nine Months Ended December 26, 2020
(millions)
SG&A expense category:
Compensation-related expenses$188.9 
Marketing and advertising expenses144.2 
Selling-related expenses53.5 
Rent and occupancy costs43.2 
Shipping and handling costs28.9 
Staff-related expenses18.4 
Bad debt expense17.6 
Other13.9 
Total increase in SG&A expenses$508.6 
Amortization of Intangible Assets.    Amortization of intangible assets decreased slightly by $0.1 million, or 0.9%, to $18.0 million during the nine months ended December 30, 2017 due to favorable foreign currency effects.
Impairment of Assets. During the nine-month periods ended December 30, 201725, 2021 and December 31, 2016,26, 2020, we recorded non-cash impairment charges of $14.0$19.3 million and $56.7$35.7 million, respectively, to write offwrite-down certain fixed assets related to our domestic and international stores, shop-within-shops, and corporate offices in connection with the Way Forward Plan. Additionally, during the nine months ended December 30, 2017, we recorded non-cash impairment charges of $10.8 million to write off certain fixed assets related to underperforming stores and shop-within-shops as a result of our on-going store portfolio evaluation.long-lived assets. See Note 7 to the accompanying consolidated financial statements.
Restructuring and Other Charges. Charges, Net. During the nine-month periods ended December 30, 201725, 2021 and December 31, 2016,26, 2020, we recorded restructuring charges of $63.7$4.4 million and $193.9$169.1 million, respectively, in connection with our restructuring plans,primarily consisting of severance and benefitbenefits costs lease termination and store closure costs, other cash charges, as well as other charges of $7.3 million and non-cash accelerated stock-based compensation expense. In addition,$8.3 million, respectively, primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired. Additionally, during the nine months ended December 30, 2017,25, 2021, we recorded net other chargesrecognized $3.1 million of $15.0 million income primarily related to depreciation expense associateda certain revenue share clause in our agreement with our former Polo store at 711 Fifth Avenue in New York City recorded afterRegent for the store closedsale of Club Monaco that entitled us to receive a portion of the sales generated by the Club Monaco business during the first quarter of Fiscal 2018 in connection with the Way Forward Plan, the departure of Mr. Stefan Larsson, and the reversal of reserves associated with the settlement of certain non-income tax issues. a four-month business transition period. See Note 8 to the accompanying consolidated financial statements.
Operating Income.    OperatingIncome (Loss).    We reported operating income increased to $472.8of $761.6 million for the nine months ended December 30, 2017, from $173.425, 2021, as compared to an operating loss of $17.9 million for the nine months ended December 31, 2016.26, 2020. The increase in operating income reflects the return to more normalized operations in comparison to the prior fiscal year period, as previously discussed, as well as net favorable foreign currency effects of $8.0 million. Our operating results during the nine-month periods ended December 30, 201725, 2021 and December 31, 2016 26, 2020 were negatively impacted by net restructuring-related charges,charges, impairment of assets, and certain other charges (benefits) totaling $104.8$15.2 million and $400.0$184.6 million, respectively, as previously discussed. The increase in operating income also included a net favorable foreign currency effect of $8.7 million.respectively. Operating income as a percentage of net revenues increased to 10.2%was 16.2% for the nine months ended December 30, 2017 from 3.4% for the nine months ended December 31, 2016. The 68025, 2021, reflecting a 1,680 basis point increase from the prior fiscal year period. The increase in operating income as a percentage of net revenues was primarily driven by thelower net decline in restructuring-related charges,charges, impairment of assets, and certain other charges and(benefits) recorded during the increase in our gross profit margin, partially offset bynine months ended December 25, 2021 as compared to the increaseprior fiscal year period, the decrease in SG&A expenses as a percentage of net revenues, and the increase in our gross margin, all as previously discussed.

5658


Operating income (loss) and margin for our segments, as well as a discussion of the changes in each reportable segment's operating margin from the comparable prior fiscal year period, are provided below:
 Nine Months Ended  
December 25, 2021December 26, 2020  
Operating
Income (Loss)		Operating
Margin		Operating
Income (Loss)		Operating
Margin		$
Change		Margin
Change
(millions) (millions) (millions) 
Segment:
North America$586.5 25.6%$264.6 18.6%$321.9 700 bps
Europe353.4 26.9%120.8 15.2%232.6 1,170 bps
Asia189.4 20.1%120.6 16.3%68.8 380 bps
Other non-reportable segments(a)
106.2 71.8%37.6 24.0%68.6 4,780 bps
1,235.5 543.6 691.9 
Unallocated corporate expenses(465.3)(384.1)(81.2)
Unallocated restructuring and other charges, net(8.6)(177.4)168.8 
Total operating income (loss)$761.6 16.2%$(17.9)(0.6%)$779.5 1,680 bps
  Nine Months Ended    
 December 30, 2017 December 31, 2016    
 
Operating
Income (Loss)
 
Operating
Margin
 Operating
Income (Loss)		 
Operating
Margin
 
$
Change
 
Margin
Change
 (millions)   (millions)   (millions)  
Segment:            
North America $549.3
 22.2% $574.6
 19.8% $(25.3) 240 bps
Europe 273.6
 23.5% 239.2
 20.4% 34.4
 310 bps
Asia 101.0
 14.9% (80.3) (12.1%) 181.3
 2,700 bps
Other non-reportable segments 96.9
 28.6% 91.0
 25.9% 5.9
 270 bps
  1,020.8
   824.5
   196.3
  
Unallocated corporate expenses (469.3)   (457.2)   (12.1)  
Unallocated restructuring and other charges (78.7)   (193.9)   115.2
  
Total operating income $472.8
 10.2% $173.4
 3.4% $299.4
 680 bps
(a)Reflects the disposition of our Club Monaco business at the end of the first quarter of Fiscal 2022.
North America operating marginimproved by 240700 basis points, primarily due to the favorable impacts of approximately 440 basis points and 260 basis points related to our retail and wholesale businesses, respectively, both largely driven by a decline in SG&A expenses as a percentage of net revenues driven by operating leverage on higher net revenues. The basis point improvement of our retail business also reflected an increase in our gross margin, while the improvement in our wholesale business reflected a decline in our gross margin.
Europe operating margin improved by 1,170 basis points, primarily due to the favorable impacts of approximately 510 basis points and 480 basis points related to our wholesale and retail businesses, respectively, both largely driven by a decline in SG&A expenses as a percentage of net revenues driven by operating leverage on higher net revenues. The basis point improvement of our wholesale business also reflected an increase in our gross margin. The overall improvement in operating margin also reflected the favorable impact of 140 basis points attributable to lower impairment of assets during the nine months ended December 25, 2021 as compared to the prior fiscal year period, partially offset by lower favorable COVID-19-related bad debt expense reversals recorded during the current fiscal year period. The remaining improvement in operating margin was driven by favorable channel mix of approximately 50 basis points, partially offset by unfavorable foreign currency effects of 10 basis points.
Asia operating margin improved by 380 basis points, primarily due to the favorable impacts of approximately 220 basis points related to our retail business, largely driven by thean increase in our gross profit margin, and decline in SG&A expenses as a percentage of net revenues. The increase also reflected the favorable impact of 100 basis points related to lower non-cash charges recorded in connection with the Way Forward Plan during the nine months ended December 30, 2017 as compared to the prior fiscal year period. Our wholesale business did not have a meaningful impact on our North America operating margin, as the improved gross margin was offset by operating expense deleverage on lower net revenues.
Europe operating margin improved by 310 basis points, primarily due to the favorable impact of 180 basis points related to our retail business, largely driven by the increase in our gross profit margin, partially offset by an increase in SG&A expenses as a percentage of net revenues. The increase also reflected the favorable impact of 120 basis points related to lower non-cash charges recorded in connection with the Way Forward Plan during the nine months ended December 30, 2017 as compared to the prior fiscal year period, as well as the favorable impact ofapproximately 60 basis points related to our wholesale business, largely driven by a decrease in SG&A expenses as a percentage of net revenues. These increases in operating margin were partially offset by unfavorable foreign currency effects of 50 basis points.
Asia operating margin improved by 2,700 basis points, primarily due to the favorable impact of 2,160 basis points related to lower non-cash charges recorded in connection with the Way Forward Plan during the nine months ended December 30, 2017 as compared to the prior fiscal year period. The increase also reflected the favorable impact of 420 basis points related to our retail business, largely driven by a decline in SG&A expenses as a percentage of net revenues and the increaserevenues. The overall improvement in our gross profit margin. The improvementoperating margin also reflected 50 basis points attributable to favorable foreign currency effects, of 150 basis points. These increases in operating margin were partially offset by aas well as 30 basis points attributable to lower non-routine inventory charges and impairment of assets recorded during the nine months ended December 25, 2021 as compared to the prior fiscal year period. The remaining 20 basis point decline related to our wholesale business.improvement was primarily driven by favorable channel mix.
Unallocated corporate expenses increased by $12.1$81.2 million to $469.3$465.3 million during the nine months ended December 30, 2017.25, 2021. The increase in unallocated corporate expenses was primarily due to lowerhigher compensation-related expenses of $69.9 million, higher marketing and advertising expenses of $27.7 million, higher impairment charges of $17.1 million, and higher other expenses of $1.5 million, partially offset by higher intercompany sourcing commission income of $28.0$35.0 million (which is offset at the segment level and eliminates in consolidation) driven by the planned reduction in inventory, and higher impairment of asset charges of $10.4 million, partially offset by lower marketing and advertising expenses of $12.6 million, lower consulting fees of $6.3 million, lower compensation-related expenses of $5.9 million, and lower other expenses of $1.5 million..
Unallocated restructuring and other charges, net decreased by $115.2$168.8 million to $78.7$8.6 million during the nine months ended December 30, 2017,25, 2021, as previously discussed above and in Note 8 to the accompanying consolidated financial statements.
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Non-operating Expense, net. Non-operatingIncome (Expense), Net. During the nine-month periods ended December 25, 2021 and December 26, 2020, we reported non-operating expense, net decreasedof $36.3 million and $21.6 million, respectively. The $14.7 million increase in non-operating expense, net was driven by:
•a $5.9 million decline in other income (expense), net, primarily driven by $1.3 million to $8.5 millionlower net foreign currency gains during the nine months ended December 30, 201725, 2021 as compared to the prior fiscal year period;
•a $5.7 million increase in interest expense, primarily driven by our finance leases, as well as the higher average level of outstanding debt during the nine months ended December 31, 2016,25, 2021 as compared to the prior fiscal year period (see "Financial Condition and Liquidity — Cash Flows"); and
•a $3.1 million decline in equityinterest income, primarily driven by lower interest rates in losses of equity-method investees and increases in foreign currency gains and interest and other income, net were largely offset by the increase in interest expense.financial markets.

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Income Tax Provision.   The income tax provision and effective tax rate for the nine months ended December 30, 201725, 2021 were $342.8$149.6 million and 73.8%20.6%, respectively, as compared to $58.9$7.5 million and 36.0%(18.9%), respectively, for the nine months ended December 31, 2016.26, 2020. The $283.9$142.1 million increase in theour income tax provision was primarily due to one-time charges of $231.3 million recorded duringdriven by the third quarter of Fiscal 2018increase in connection with the TCJA (as discussed within "Recent Developments"), which negatively impacted our effective tax rate by 4,980 basis points,pretax income, as well as the increase in pretax income. Thean increase in our effective tax rate also reflected the net favorable impact of 1,2003,950 basis points, primarily due to the tax impact of earnings in lower taxed foreign jurisdictions versus the U.S. and the absence of (i)points. Our income tax reserve adjustments largely associated with an income tax settlement and certain income tax audits, and (ii) valuation allowances on and adjustments to deferred tax assets, both of which were recorded duringprovision for the nine months ended December 31, 2016.26, 2020 reflected incremental tax expense of $16.1 million primarily related to a valuation allowance provided against domestic losses attributable to significant COVID-19 business disruptions and $14.2 million related to international tax legislation enacted in connection with the European Union's anti-tax avoidance directive, partially offset by an income tax benefit of $24.4 million primarily due to a net operating loss carryback under the CARES Act. Collectively, this $5.9 million of net incremental tax expense reduced our prior year fiscal period effective tax rate by 1,480 basis points. The 1,200remaining 2,470 basis points also reflectedpoint increase in our effective tax rate was primarily driven by the unfavorable tax impact of the adoption of Accounting Standards Update No. 2016-09, "Improvementsstock compensation, tax adjustments related to Employee Share-Based Payment Accounting" ("ASU 2016-09").audit settlements, and certain permanent adjustments. See Note 49 to the accompanying consolidated financial statements for additional information relating to our adoptionstatements.
Net Income (Loss).    We reported net income of ASU 2016-09.
Net Income.    Net income increased to $121.5$575.7 million for the nine months ended December 30, 2017, from $104.725, 2021, as compared to a net loss of $47.0 million for the nine months ended December 31, 2016.26, 2020. The $16.8$622.7 million increase in net income was primarily due to the $299.4 million increase in our operating income, partially offset by the $283.9 million increase in our income tax provision, as previously discussed. Net income for the nine months ended December 30, 2017 reflected one-time charges of $231.3 million recorded in connection with the TCJA,both as previously discussed. Our operating results during the nine-month periods ended December 30, 201725, 2021 and December 31, 201626, 2020 were also negatively impacted by net restructuring-related charges, impairment of assets, and certain other charges (benefits) totaling $104.8$15.2 million and $400.0$184.6 million, respectively, which had an after-tax effect of reducing net income by $69.8$11.8 million and $298.0$151.6 million, respectively. Our net loss during the nine months ended December 26, 2020 also reflected $5.9 million of incremental net tax expense recorded in connection with one-time tax events, as previously discussed.
Net Income (Loss) per Diluted Share.    Net    We reported net income per diluted share increased to $1.47 per shareof $7.68 for the nine months ended December 30, 2017, from $1.2525, 2021, as compared to a net loss per diluted share of $0.64 for the nine months ended December 31, 2016.26, 2020. The $0.22$8.32 per share increase was due todriven by the higher level of net income, as previously discussed, and lower weighted-average diluted shares outstanding during the nine months ended December 30, 2017 driven by our share repurchases during the last twelve months. Net income per diluted share for the nine months ended December 30, 2017 was negatively impacted by approximately $2.80 per share as a result of one-time charges recorded in connection with the TCJA, as previously discussed. Net income per diluted share for the nine-month periods ended December 30, 201725, 2021 and December 31, 201626, 2020 were also negatively impacted by $0.85$0.15 per share and $3.57$2.03 per share, respectively, as a result ofrelated to net restructuring-related charges, impairment of assets, and certain other charges (benefits), as previously discussed. Net loss per diluted share for the nine months ended December 26, 2020 was also negatively impacted by $0.08 per share due to incremental net tax expense recorded in connection with one-time tax events, as previously discussed.
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FINANCIAL CONDITION AND LIQUIDITY
Financial Condition
The following table presents our financial condition as of December 30, 201725, 2021 and April 1, 2017:March 27, 2021:
  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
December 25,
2021		March 27,
2021		$
Change
 (millions)
Cash and cash equivalents$2,276.8 $2,579.0 $(302.2)
Short-term investments710.2 197.5 512.7 
Current portion of long-term debt(a)
(499.4)— (499.4)
Long-term debt(a)
(1,136.0)(1,632.9)496.9 
Net cash and investments(b) 
$1,351.6 $1,143.6 $208.0 
Equity$2,722.9 $2,604.4 $118.5 
(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.

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(a)See Note 10 to the accompanying consolidated financial statements for discussion of the carrying values of our debt.
(b)"Net cash and investments" is defined as cash and cash equivalents, plus investments, less total debt.
The increase in our net cash and investments position at December 30, 201725, 2021 as compared to April 1, 2017March 27, 2021 was primarily due to our operating cash flows of $951.1$821.7 million, partially offset by our use of cash to support Class A common stock repurchases of $340.4 million, including withholdings in satisfaction of tax obligations for stock-based compensation awards, to invest in our business through $123.0$113.6 million in capital expenditures, and to make dividend payments of $121.7$101.1 million.
The increase in our equity was primarily attributable to our comprehensive income and the net impact of stock-based compensation arrangements, partially offset by our share repurchase activity and dividends declared during the nine months ended December 30, 2017.25, 2021.
Cash Flows
The following table details our cash flows for the nine-month periods ended December 30, 201725, 2021 and December 31, 2016:26, 2020:
 Nine Months Ended
 December 25,
2021		December 26,
2020		$
Change
 (millions)
Net cash provided by operating activities$821.7 $334.6 $487.1 
Net cash provided by (used in) investing activities(635.8)256.6 (892.4)
Net cash provided by (used in) financing activities(458.3)363.7 (822.0)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(30.2)46.8 (77.0)
Net increase (decrease) in cash, cash equivalents, and restricted cash$(302.6)$1,001.7 $(1,304.3)
  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
Net Cash Provided by Operating Activities.    Net cash provided by operating activities increased to $951.1was $821.7 million during the nine months ended December 30, 2017,25, 2021, as compared to $850.7$334.6 million during the nine months ended December 31, 2016.26, 2020. The $100.4$487.1 million net increase in cash provided by operating activities was due to an increase in net income before non-cash charges, partially offset by a net favorableunfavorable change related to our operating assets and liabilities, including our working capital, as compared to the prior fiscal year period, partially offsetperiod.
The net unfavorable change related to our operating assets and liabilities, including our working capital, was primarily driven by:
•a year-over-year increase in our inventory levels largely to support revenue growth;
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•a net unfavorable change in our accounts payable and accrued liabilities largely driven by an unfavorable change in our restructuring reserve due to a declinedecrease in net income before non-cash charges. The decline in net income before non-cashrestructuring 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, 201725, 2021 as reflected incompared to the offsettingprior fiscal year period, partially offset by a favorable change in our income taxes payable. Excludingdividends payable related to the impacttemporary suspension and subsequent resumption of this one-time charge, our operating assets and liabilities, including working capital, increased primarily due to:
quarterly cash dividend program, as well as a favorable changeschange in our (i) otheraccounts payable largely driven by an increase in our expenses during the third quarter of Fiscal 2022 as compared to the prior fiscal year period and the timing of cash payments;
•an unfavorable change related to our 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 collectionsreceipts and payments;payments, respectively; and
a decline in•an unfavorable change related to our inventory levels,prepaid expenses and other current assets largely driven by an increase in non-trade receivables primarily related to transition services being performed in connection with the disposition of our inventory management initiatives, lower sourcing costs, andClub Monaco business (see "Recent Developments"), as well as the timing of inventory receipts.cash payments.
These increasesdecreases related to our operating assets and liabilities were partially offset by an unfavorableby:
•a favorable change inrelated to our accounts receivable, largely driven by a return to more normalized operations in comparison to the timing of cash collections.prior fiscal year period.
Net Cash Provided by (Used in) Investing Activities.    Net cash used in investing activities was $317.8$635.8 million during the nine months ended December 30, 2017,25, 2021, as compared to net cash provided by investing activities of $16.3$256.6 million during the nine months ended December 31, 2016.26, 2020. The $334.1$892.4 million net increasedecrease in cash used inprovided by investing activities was primarily driven by:
a $434.5•an $855.8 million increasedecrease in purchases of investments, less proceeds from sales and maturities of investments, less purchases of investments. During the nine months ended December 30, 2017,25, 2021, we made net investment purchases of $190.2investments of $520.1 million, as compared to receiving net investmentproceeds from sales and maturities of $244.3investments of $335.7 million during the nine months ended December 31, 2016.26, 2020; and
This•a $32.8 million increase in cash used in investing activities was partially offset by:
a $102.5 million decline in capital expenditures. During the nine months ended December 30, 2017,25, 2021, we spent $123.0$113.6 million on capital expenditures, as compared to $225.5$80.8 million during the nine months ended December 31, 2016.26, 2020. Our capital expenditures during the nine months ended December 30, 201725, 2021 primarily related to our global retail and

59

department store renovations, new store openings and the continuedrenovations, as well as enhancements to our global information technology systems.
We currently expect to spend approximately $200 million into $225 million on capital expenditures during Fiscal 2018,2022, lower than our previous estimate of $225$250 million to $275 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.2023.
Net Cash Used inProvided by (Used in) Financing Activities.    Net cash used in financing activities was $158.7$458.3 million during the nine months ended December 30, 2017,25, 2021, as compared to $369.5net cash provided by financing activities of $363.7 million during the nine months ended December 31, 2016.26, 2020. The $210.8$822.0 million net decrease in cash used inprovided by financing activities was primarily driven by:
•a $116.1$466.9 million declinedecrease in cash used to repayproceeds from the issuance of debt, less proceeds from debt issuances. Werepayments. During the nine months ended December 25, 2021, we did not issue or repay any debt during the nine months ended December 30, 2017.debt. On a comparative basis, during the nine months ended December 31, 2016,26, 2020, we made $90.0 millionreceived $1.242 billion in net repayments relatedproceeds from the issuance of our 1.700% unsecured notes and 2.950% unsecured senior notes, a portion of which was used to our commercial paper note issuances and repayments and repaid $26.1repay $475.0 million of borrowings previously outstanding under our credit facilities;facilities and our previously outstanding $300.0 million principal amount of unsecured 2.625% senior notes that matured August 18, 2020;
•a $99.1$304.3 million declineincrease in cash used to repurchase shares of our Class A common stock. During the nine months ended December 30, 2017, $15.925, 2021, we resumed activities under our common stock repurchase program and repurchased $300.0 million of shares of our Class A common stock, and an additional $40.4 million in shares of our 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. On a comparative basis, during the nine months ended December 31, 2016, we used $100.0 million to repurchase shares of Class A common stock pursuant to our common stock repurchase program, and an additional $15.026, 2020, $36.1 million in shares of our Class A common stock were surrendered or withheld for taxes.taxes; and
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•a $51.3 million increase in payments of dividends, driven by the reinstatement of our quarterly cash dividend program during Fiscal 2022 after being temporarily suspended at the beginning of the COVID-19 pandemic 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 ofand commercial paper notes,program, and other available financing options.
During the nine months ended December 30, 2017,25, 2021, we generated $951.1$821.7 million of net cash flows from our operations. As of December 30, 2017,25, 2021, we had $2.038$2.987 billion in cash, cash equivalents, and short-term investments, of which $1.203$1.062 billion were held by our subsidiaries domiciled outside the U.S. We are not dependent on foreign cash to fund our domestic operations. Given recent changesUndistributed foreign earnings that were subject to the taxationTax 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 withgenerated after December 31, 2017 that were not subject to the TCJA (as discussed within "Recent Developments"), we are exploring repatriation possibilities. Ifone-time mandatory transition tax. However, if our plans change and we choose to repatriate any fundspost-2017 earnings to the U.S. in the future, we could potentiallywould be subject to applicable state, local, and/orU.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 ourthe total availability, borrowings outstanding, and remaining availability under our credit and overdraft facilities and Commercial Paper Program as of December 30, 2017:25, 2021:
  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 25, 2021
Description(a)
Total
Availability		Borrowings
Outstanding		Remaining
Availability
 (millions)
Global Credit Facility and Commercial Paper Program(b)
$500 $10 (c)$490 
Pan-Asia Credit Facilities33 — 33 
Japan Overdraft Facility44 — 44 
(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 25, 2021.
We believe that ourthe Global Credit Facility is adequately diversified with no undue concentration in any one financial institution. In particular, as of December 30, 2017,25, 2021, there were nineeight 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 CreditBorrowing 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-commercedigital 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 pandemic diseases and other catastrophic events, 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 20172021 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.credit facilities.
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 secondanother 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 "2.625%"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 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.
The Global Credit Facility contains a number of covenants, as described in Note 10 to the accompanying consolidated financial statements. As of December 30, 2017,25, 2021, 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 CreditBorrowing 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 20172021 10-K for additional information relating to our debt and covenant compliance.
ContractualCommon Stock Repurchase Program
Repurchases of shares of our Class A common stock are subject to overall business and Other Obligations
In connection withmarket conditions, as well as other potential factors such as the TCJA's provision that subjectstemporary restrictions previously deferred foreign earningsin place under our Global Credit Facility. Accordingly, in response to 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 one-time mandatory transition tax (as described in "Recent Developments"),preemptive action to preserve cash and strengthen our liquidity position. However, we recorded a charge of $215.5 million withinresumed activities under our income tax provisionClass A common stock repurchase program during the third quarter of Fiscal 2018, together with a corresponding current2022 as restrictions under our Global Credit Facility were lifted (see Note 10 to the accompanying consolidated financial statements) and non-current income tax payable obligation withinoverall business and market conditions have improved since the COVID-19 pandemic first emerged.
As of December 25, 2021, the remaining availability under our Class A common stock repurchase program was approximately $280 million. On February 2, 2022, our Board of Directors approved an expansion of our existing common stock repurchase program that allowed us to repurchase up to an additional $1.500 billion of our Class A common stock.
See Note 14 to the accompanying consolidated balance sheets based upon the estimated timing of payments. This obligation, which was recorded on a provisional basis and is subjectfinancial statements for additional information relating to change, is expected to be paid over an eight-year period as follows:our Class A common stock repurchase program.
  
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
(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.64

Dividends
Except as discussed below, we have maintained a regular quarterly cash dividend program on our common stock since 2003.
In response to 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. On May 19, 2021, our Board of Directors approved the reinstatement of our quarterly cash dividend program at the pre-pandemic amount of $0.6875 per share. The third quarter Fiscal 2022 dividend of $0.6875 per share was declared on December 10, 2021, was payable to shareholders of record at the close of business on December 24, 2021, and was paid on January 7, 2022.
We intend to continue to pay regular dividends on outstanding shares of our common stock. However, any decision to declare and pay dividends in the future will ultimately 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
There have been no material changes to our contractual and other obligations as disclosed in our Fiscal 2021 10-K, other than those which occur in the ordinary course of business. Refer to the"Financial Condition and Liquidity — Contractual and Other Obligations"section of the MD&A in our Fiscal 20172021 10-K for detailed disclosure of our other commitmentscontractual and contractualother obligations as of April 1, 2017.March 27, 2021.
MARKET RISK MANAGEMENT
As discussed in Note 1413 of the Fiscal 20172021 10-K and Note 12 to the accompanying consolidated financial statements, we are exposed to a variety of levels and types of risks, including the impact of changes in foreign currency exchange rates relating toon foreign currency-denominated balances, certain anticipated cash flows fromof 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 changesfluctuations in benchmark interest rates. Consequently, at times,Accordingly, in the normal course of business we employassess such risks and, in accordance with our established policies and procedures, including themay use of derivative financial instruments to manage such risks.and mitigate them. We do not enter into derivative transactionsuse derivatives for speculative or trading purposes.
As a result of theGiven our use of derivative instruments, we are exposed to the risk that the counterparties to oursuch contracts will fail to meet their contractual obligations. To mitigate thissuch counterparty credit risk, we have ait is our policy ofto only enteringenter 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, 2017.25, 2021. However, we do have in aggregate $4.2$28.3 million of derivative instruments in net asset positions with threeheld across four creditworthy financial institutions.
Foreign Currency Risk Management
We manage our exposure to changes in foreign currency exchange rates through the use ofusing 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, outstandingas well as the impact on earnings and other comprehensive income of such instruments as of December 30, 2017.

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25, 2021.
Forward Foreign Currency Exchange Contracts
We enter into forward foreign currency exchange contracts as hedges to reduce ourmitigate 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 managefor managing the
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level of exposure to the risk of foreign currencysuch 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 currencyrelated exposures anticipated over a two-year period. In doing so, we usethe next twelve months using forward foreign currency exchange contracts that generally havewith maturities of two months to two yearsone year to provide continuing coverage throughoutover 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.
Cross-Currency Swap Contracts
During our fiscal year ended April 2, 2016 ("Fiscal 2016"), we entered into two pay-floatingWe periodically designate pay-fixed rate, receive-floatingreceive-fixed rate cross-currency swaps, with notional amounts of €280 million and €274 million, which we designatedswap 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-fixed rate, receive-fixed rate cross-currency swap thecontracts swap U.S. Dollar-denominated variablefixed interest rate payments based on the 3-month London Interbank Offered Rate ("LIBOR") plus acontract's notional amount and the fixed spreadrate of interest payable on certain of our senior notes for Euro-denominated variablefixed interest rate payments, based on the 3-month Euro Interbank Offered Rate plusthereby economically converting a fixed spread. As a result, the Cross-Currency Swaps, in conjunction with the Interest Rate Swaps (as defined below), economically convertportion of our $300 million fixed-rate 2.125% and $300 million fixed-rate 2.625%U.S. Dollar-denominated senior note obligations to €280 million and €274 million floating-ratefixed rate Euro-denominated liabilities, respectively.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 pay-floating rate, receive-fixed rate interest rate swap contracts which we designated as hedges against changes in the respective fair values of our fixed-rate 2.125% Senior Notes and our fixed-rate 2.625% 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 our 2.125% Senior Notes and 2.625% Senior Notes for variable interest rates based on 3-month LIBOR plus a fixed spread.
Investment Risk Management
As of December 30, 2017,25, 2021, we had cash and cash equivalents on-hand of $1.176$2.277 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$710.2 million of short-term investments, consisting of investments in time deposits and commercial paper with original maturities greater than 90 days; $47.5and $8.6 million of restricted cash placedheld 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, 2017.25, 2021.

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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 20172021 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, seerefer to the "Critical Accounting Policies" section of the MD&A in our Fiscal 20172021 10-K.
There have been no significant changes in the application of our critical accounting policies since April 1, 2017.March 27, 2021.
Goodwill Impairment Assessment
We performed our annual goodwill impairment assessment using a qualitative approach as of the beginning of the second quarter of Fiscal 2018.2022. 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
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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

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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, there25, 2021. There has been no change in the Company's internal control over financial reporting during the fiscal quarter ended December 30, 201725, 2021 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
OperatingAlthough there have been no material changes in the Company's internal control over financial reporting, we continue to experience varying degrees of business disruptions related to the COVID-19 pandemic, including periods of temporary closure of our stores, distribution centers, and Financial Reporting System Implementation
Duringcorporate facilities, as described within "Recent Developments," with a significant portion of our corporate employees continuing to work remotely. Additionally, in connection with our Fiscal 2021 Strategic Realignment Plan, as described within "Recent Developments," we made a significant reduction to our global workforce during the first quartersecond half of Fiscal 2018, we completed the migration of our European operations to an operating and 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,2021. Despite such cumulative actions, we have not experienced certain changes to our processes and procedures which, in turn, resulted inany material changes to our internal controlcontrols 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, managementWe 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, seecontrols. See Item 1A — "Risk Factors — Risks and uncertaintiesFactors" in the Fiscal 2021 10-K for additional discussion regarding risks to our business associated with the implementation of information systems may negatively impactCOVID-19 pandemic and our business" in the Fiscal 2017 10-K.restructuring plans.
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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 20172021 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 20172021 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 withThere are no material changes to the risk factors and informationpreviously disclosed, innor has the Fiscal 2017 10-K.
The impact to ourCompany 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.
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 is complex and widely considered to be the most significant overhaul to the U.S. federal tax code since 1986.
Although we expect the TCJA will ultimately benefit ouroperating 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' expectationsfinancial condition.
Item 2.    Unregistered Sales of Equity Securities and there can be no assurance that the TCJA will ultimately benefit our resultsUse of operations and financial condition in future periods.Proceeds.

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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, 2017.25, 2021.
(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, 2017:25, 2021:
 
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, 201711,257
 $88.92
 —
 $100
October 29, 2017 to December 2, 2017—
 —
 —
 100
December 3, 2017 to December 30, 20173,238

101.38
 —
 100
 14,495
   —
  
Total Number of Shares PurchasedAverage
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(a)
    (millions)
September 26, 2021 to October 23, 20215,058 (b)$114.53 — $580 
October 24, 2021 to November 27, 20211,132,330 127.04 1,132,330 436 
November 28, 2021 to December 25, 20211,325,407 (c)117.86 1,325,346 280 
2,462,795 2,457,676 
(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)On February 2, 2022, the Company's Board of Directors approved an expansion of the common stock repurchase program that allows it to repurchase up to an additional $1.500 billion of its Class A common stock. Repurchases of shares of the Company's Class A common stock are subject to overall business and market conditions.
(b)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.
(c)Includes 61 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.

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Item 6.    Exhibits.
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*
ComputationCredit Agreement, dated as of RatioAugust 12, 2019 and as amended by the Second Amendment, dated as of Earnings to Fixed Charges.January 3, 2022, among the Company, Ralph Lauren Europe Sàrl, RL Finance B.V. and Ralph Lauren Asia Pacific Limited as the borrowers, the lenders party thereto, Bank of America, N.A., as syndication agent, Wells Fargo Bank, N.A., HSBC Bank USA, N.A., ING Bank N.V., Dublin Branch, and Deutsche Bank Securities Inc., as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent
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 2002.2002
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 2002.2002
101*101.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.
* Filed herewith.



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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, 20183, 2022



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