The Company had $66 million in capital expenditures in the first quarter of Fiscal 2014, compared to $62 million in the prior year period. Free cash flow, which is defined as net cash provided by operating activities less capital expenditures, increased 11% to $229 million. The Company repurchased approximately 0.9 million shares of Class A Common Stock during the first quarter at an average cost of $175.64 per share, utilizing $150 million of its authorized share repurchase programs. Approximately $427 million remained available under the Company’s authorized share repurchase programs at the end of the quarter.

Global Retail Store Network

The Company ended the first quarter of Fiscal 2014 with 396 directly operated stores, comprised of 123 Ralph Lauren stores, 59 Club Monaco stores and 214 Polo factory stores. The Company also operated 505 concession shop locations worldwide at the end of the first quarter. In addition to Company-operated locations, international licensing partners operated 69 Ralph Lauren stores and 33 dedicated shops, as well as 89 Club Monaco stores and shops at the end of the first quarter.

Fiscal 2014 Outlook

The Company continues to expect 4%-7% growth in consolidated net revenues for Fiscal 2014, including a 150 basis point net negative impact from foreign currency translation and an additional 100 basis point headwind from discontinued businesses. Operating margin for Fiscal 2014 is still expected to be 25-75 basis points below the prior year’s record level due to the integration of certain formerly licensed merchandise categories and geographic regions to directly controlled operations, accelerated investment in the Company’s long-term growth initiatives and unfavorable foreign currency effects. The full year Fiscal 2014 tax rate is estimated at 31%.

In the second quarter of Fiscal 2014, the Company expects consolidated net revenues to increase by a low-single-digit percentage, including a 200 basis point net negative impact from foreign currency translation and discontinued businesses. Retail sales are expected to grow at a mid-single digit rate while wholesale revenues are expected to be flat to the prior year period as a result of the timing of certain seasonal shipments and a planned conversion from legacy systems to SAP. Operating margin for the second quarter of Fiscal 2014 is expected to be approximately 300-350 basis points below the comparable prior year period due to the integration of newly assumed operations, the timing of investments to support the Company’s strategic growth objectives and unfavorable foreign currency effects. The second quarter tax rate is estimated at 31.5%.

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