Segment Information

12 Months Ended

Mar. 28, 2020

The Company has three 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 retail and wholesale businesses in the U.S. and Canada, excluding Club Monaco. In North America, the Company's retail business is primarily comprised of its Ralph Lauren stores, its factory stores, and its digital commerce site, www.RalphLauren.com. The Company's wholesale business in North America is comprised primarily of sales to department stores, and to a lesser extent, specialty stores.

•

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 retail and wholesale businesses in Europe, the Middle East, and Latin America, excluding Club Monaco. In Europe, the Company's retail business is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its various digital commerce sites. The Company's wholesale business in Europe is comprised of a varying mix of sales to both department stores and specialty stores, depending on the country, 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 Asia is primarily comprised of its Ralph Lauren stores, its factory stores, its concession-based shop-within-shops, and its digital commerce site, www.RalphLauren.cn, which launched in September 2018. In addition, the Company sells its products online through various third-party digital partner commerce sites. In Asia, the Company's wholesale business is comprised primarily of sales to department stores, with related products distributed through shop-within-shops.

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

The Company's segment reporting structure is consistent with how it establishes its overall business strategy, allocates resources, and assesses performance of its business. The accounting policies of the Company's segments are consistent with those described in Notes 2 and 3. Sales and transfers between segments are generally recorded at cost and treated as transfers of inventory. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Each segment's performance is evaluated based upon net revenues and operating income before restructuring-related charges, impairment of assets, and certain other one-time items, 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. Asset information by segment is not utilized for purposes of assessing performance or allocating resources, and therefore such information has not been presented.

Effective beginning in the first quarter of Fiscal 2020, operating results related to the Company's business in Latin America are included within its Europe segment due to a change in how the Company manages this business. Previously, such results were included within the Company's other non-reportable segments. All prior period segment information has been recast to reflect this change on a comparative basis.

Net revenues for each of the Company's segments are as follows:



	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
	(millions)
Net revenues:
North America	$	3,140.5	$	3,202.9	$	3,231.0
Europe	1,632.2		1,683.0		1,608.3
Asia	1,017.2		1,041.0		933.7
Other non-reportable segments	369.9		386.1		409.3
Total net revenues	$	6,159.8	$	6,313.0	$	6,182.3

Operating income for each of the Company's segments is as follows:



	Fiscal Years Ended
	March 28, 2020			March 30, 2019			March 31, 2018
	(millions)
Operating income^(a):
North America	$	486.6		$	682.8		$	677.6
Europe	336.3			392.8			361.0
Asia	124.8			161.0			137.2
Other non-reportable segments	85.2			118.7			103.2
	1,032.9			1,355.3			1,279.0
Unallocated corporate expenses	(648.7		)	(663.4		)	(672.8		)
Unallocated restructuring and other charges^(b)	(67.2		)	(130.1		)	(108.0		)
Total operating income	$	317.0		$	561.8		$	498.2

^(a)

Segment operating income during Fiscal 2020 reflects bad debt expense of $38.7 million, $15.2 million, $1.7 million, and $3.1 million related to North America, Europe, Asia, and other non-reportable segments, respectively, primarily related to adverse impacts associated with COVID-19 business disruptions. Segment operating income during Fiscal 2020 also reflects higher inventory charges of approximately $108 million, $42 million, $17 million, and $8 million as compared to the prior fiscal year related to North America, Europe, Asia, and other non-reportable segments, respectively, primarily related to adverse impacts associated with COVID-19 business disruptions. Segment operating income and unallocated corporate expenses during the fiscal years presented also included asset impairment charges (see Note 8), which are detailed below:



	Fiscal Years Ended
	March 28, 2020			March 30, 2019			March 31, 2018
	(millions)
Asset impairment charges:
North America	$	(1.9	)	$	(3.1	)	$	(4.7	)
Europe	—			(5.4		)	(1.2		)
Asia	(3.7		)	(4.4		)	(1.0		)
Other non-reportable segments	(19.3		)	(7.0		)	(22.4		)
Unallocated corporate expenses	(6.7		)	(5.9		)	(20.7		)
Total asset impairment charges	$	(31.6	)	$	(25.8	)	$	(50.0	)


^(b)	The fiscal years presented included certain unallocated restructuring and other charges (see Note 9), which are detailed below:



	Fiscal Years Ended
	March 28, 2020			March 30, 2019			March 31, 2018
	(millions)
Unallocated restructuring and other charges:
North America-related	$	(1.2	)	$	(27.0	)	$	(15.5	)
Europe-related	(3.3		)	(14.9		)	(4.6		)
Asia-related	(0.9		)	(0.9		)	2.5
Other non-reportable segment-related	(0.8		)	(4.5		)	(8.4		)
Corporate operations-related	(31.4		)	(46.3		)	(53.2		)
Unallocated restructuring charges	(37.6		)	(93.6		)	(79.2		)
Other charges (see Note 9)	(29.6		)	(36.5		)	(28.8		)
Total unallocated restructuring and other charges	$	(67.2	)	$	(130.1	)	$	(108.0	)

The following tables summarize depreciation and amortization expense and capital expenditures for each of the Company's segments:



	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
	(millions)
Depreciation and amortization expense:
North America	$	74.6	$	81.8	$	82.5
Europe	32.8		33.6		34.9
Asia	59.3		49.1		50.3
Other non-reportable segments	5.4		7.2		10.6
Unallocated corporate	97.4		95.5		102.8
Unallocated restructuring and other charges (see Note 9)	—		14.1		14.1
Total depreciation and amortization expense	$	269.5	$	281.3	$	295.2



	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
	(millions)
Capital expenditures:
North America	$	48.5	$	74.6	$	41.9
Europe	34.3		26.6		28.8
Asia	59.6		45.2		40.7
Other non-reportable segments	7.3		5.0		5.0
Unallocated corporate	120.6		46.3		45.2
Total capital expenditures	$	270.3	$	197.7	$	161.6

Net revenues and long-lived assets by geographic location of the reporting subsidiary are as follows:



	Fiscal Years Ended
	March 28, 2020		March 30, 2019		March 31, 2018
	(millions)
Net revenues^(a):
The Americas^(b)	$	3,516.4	$	3,602.2	$	3,652.1
Europe^(c)	1,625.3		1,668.6		1,595.2
Asia^(d)	1,018.1		1,042.2		935.0
Total net revenues	$	6,159.8	$	6,313.0	$	6,182.3



	March 28, 2020		March 30, 2019
	(millions)
Long-lived assets^(a)(e):
The Americas^(b)	$	1,383.6	$	789.6
Europe^(c)	772.9		140.0
Asia^(d)	334.6		109.6
Total long-lived assets	$	2,491.1	$	1,039.2


^(a)	Net revenues and long-lived assets 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. were $3.308 billion, $3.379 billion, and $3.427 billion in Fiscal 2020, Fiscal 2019, and Fiscal 2018, respectively. Long-lived assets located in the U.S. were $1.327 billion and $766.1 million as of March 28, 2020 and March 30, 2019, respectively.


^(c)	Includes the Middle East.


^(d)	Includes Australia and New Zealand.

^(e)

Long-lived assets as of March 28, 2020 reflect operating lease ROU assets resulting from the Company’s adoption of ASU 2016-02 (see Note 4).