Ralph Lauren Corporation (NYSE:RL) Q3 2023 Earnings Call Transcript

Operator: Our final question comes from Ike Boruchow with Wells Fargo.

Ike Boruchow : So Jane, that’s actually what I wanted to ask about. So understanding the pricing strategies are working in the margins themselves in absolute terms are still very healthy, can you just explain, versus three months ago looking into Q4, the gross margin differential? Because you’re lowering the gross margin for the year. I think The Street was looking at like flattish gross margin. Now you’re guiding down 140. I know that that’s FX-driven, but just directionally, something is a little bit worse ex currency. So I don’t know if that has to do with wholesale being weaker, but can you just kind of explain exactly what’s kind of taking place in Q4 versus maybe the prior plan?

Jane Nielsen : So I think that when we guided in May, we gave guidance based on our best estimate of consumer response and pressures. I think the consumer — the value consumer that we’ve called out is more pressured than when we gave our original guidance. And we’ve also looked at the fourth quarter and want to ensure that we are in good shape as we start fiscal year ’24 from an inventory perspective. As we’ve committed, we’re going to have inventories more closely aligned to sales, and that’s been responding to the desires of our value consumers to have a really compelling value. Total value for us has made us a little more responsive to that and as well that we want to make sure that we’re healthy on inventories as we move out of the fourth quarter.

Patrice Louvet : Okay. Well, listen, thank you, everyone, for joining us today. We look forward to sharing our fourth quarter and full year fiscal ’23 results with you in late May. And until then, stay safe, and have a great day.

Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.