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 are based on current expectations and are indicated by words or phrases such as "anticipate," "estimate," "expect," "project," "we believe," "is or remains optimistic," "currently envisions" 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. Forward-looking statements include statements regarding, among other items:

• our anticipated growth strategies;

• our plans to expand internationally;

• the impact of the global credit crisis on the ability of our customers, suppliers and vendors to access sources of liquidity;

• the impact of the significant downturn in the global economy on consumer purchases of premium lifestyle products that we offer for sale;

• our plans to open new retail stores;

• our ability to make certain strategic acquisitions of certain selected licenses held by our licensees;

• our intention to introduce new products or enter into new alliances;

• anticipated effective tax rates in future years;

• future expenditures for capital projects;

• our ability to continue to pay dividends and repurchase Class A common stock;

• our ability to continue to maintain our brand image and reputation;

• our ability to continue to initiate cost cutting efforts and improve profitability; and

• our efforts to improve the efficiency of our distribution system.

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 March 29, 2008 (the "Fiscal 2008 10-K") and 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 "Polo," "ourselves," "we," "our," "us" and the "Company" refer to Polo Ralph Lauren Corporation and its subsidiaries, unless the context indicates otherwise. Due to the collaborative and ongoing nature of our relationships with our licensees, such licensees are sometimes referred to in this Form 10-Q as "licensing alliances." We utilize a 52-53 week fiscal year ending on the Saturday closest to March 31. As such, fiscal year 2009 will end on March 28, 2009 and will be a 52-week period ("Fiscal 2009"). Fiscal year 2008 ended on March 29, 2008 and reflected a 52-week period ("Fiscal 2008"). In turn, the second quarter for Fiscal 2009 ended on September 27, 2008 and was a 13-week period. The second quarter for Fiscal 2008 ended on September 29, 2007 and was also a 13-week period.

INTRODUCTION

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

• Overview. This section provides a general description of our business and a summary of financial performance for the three-month and six-month periods ended September 27, 2008. 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 six-month periods ended September 27, 2008 and September 29, 2007.

• Financial condition and liquidity. This section provides an analysis of our cash flows for the six-month periods ended September 27, 2008 and September 29, 2007, as well as a discussion of our financial condition and liquidity as of September 27, 2008 as compared to the end of Fiscal 2008. The discussion of our financial condition and liquidity includes (i) our available financial capacity under our credit facility, (ii) a summary of our key debt compliance measures and (iii) any material changes in our financial condition and contractual obligations since the end of Fiscal 2008.

• Market risk management. This section discusses any significant changes in our interest rate and foreign currency exposures, the types of derivative instruments used to hedge those exposures, and/or underlying market conditions since the end of Fiscal 2008.

• Critical accounting policies. This section discusses any significant changes in our accounting policies since the end of Fiscal 2008. Significant changes include those considered to be important to our financial condition and results of operations and which require significant judgment and estimates on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Notes 3 and 4 to our audited consolidated financial statements included in our Fiscal 2008 10-K.

• Recently issued accounting standards. This section discusses the potential impact to our reported financial condition and results of operations of accounting standards that have been issued, but which we have not yet adopted.

OVERVIEW

Our Business

Our Company is a global leader in the design, marketing and distribution of premium lifestyle products including men's, women's and children's apparel, accessories, fragrances and home furnishings. Our long-standing reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets. Our brand names include Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Rugby, Ralph Lauren Childrenswear, Chaps, Club Monaco and American Living, among others.

We classify our businesses into three segments: Wholesale, Retail and Licensing. Our wholesale business (representing 57% of Fiscal 2008 net revenues) consists of wholesale-channel sales made principally to major department stores, specialty stores and golf and pro shops located throughout the U.S., Europe and Asia. Our retail business (representing 39% of Fiscal 2008 net revenues) consists of retail-channel sales directly to consumers through full-price and factory retail stores located throughout the U.S., Canada, Europe, South America and Asia, and through our retail internet sites located at www.RalphLauren.com and www.Rugby.com. In addition, our licensing business (representing 4% of Fiscal 2008 net revenues) consists of royalty-based arrangements under which we license the right to third parties to use our various trademarks in connection with the manufacture and sale of designated products, such as apparel, eyewear and fragrances, in specified geographical areas for specified

periods. Approximately 25% of our Fiscal 2008 net revenues was earned in international regions outside of the U.S. and Canada.

Our business is typically affected by seasonal trends, with higher levels of wholesale sales in our second and fourth quarters and higher retail sales in our second and third quarters. These trends result primarily from the timing of seasonal wholesale shipments and key vacation travel, back-to-school and holiday periods in the Retail segment. Accordingly, our operating results for the three-month and six-month periods ended September 27, 2008, and our cash flows for the six-month period ended September 27, 2008 are not necessarily indicative of the results and cash flows that may be expected for the full Fiscal 2009.

Summary of Financial Performance

Global Economic Developments

Over the course of the past year, the global economic environment has deteriorated significantly and has evolved into what is commonly called a "global credit crisis." Negative developments include declining values in real estate, restricted criteria for obtaining credit and capital, liquidity concerns over major financial institutions, and recent significant declines and volatility in our global financial markets. In response to these unprecedented market conditions, on October 3, 2008, the U.S. enacted the Emergency Economic Stabilization Act of 2008, with an objective to promote the stability of the U.S. financial system. Many international countries have taken similar measures to stabilize the state of their local financial systems, including those located in Europe and Asia. Notwithstanding these measures, consumer confidence in the U.S. as measured by the Conference Board reached an all-time low in October 2008.

We believe that the global economic uncertainty and credit crisis have negatively impacted the level of consumer spending for discretionary items over the course of the past year and through October 2008. This has affected our business as it is highly dependent on consumer demand for our products. Despite the more challenging economic environment that affected both the Company's wholesale customers and retail channels, we continued to experience reported revenue growth during the first half of Fiscal 2009. However, in October 2008, our Retail segment began to experience much softer revenue performance due in a large part to a drop-off in sales in our retail stores. If the global macroeconomic environment continues to be weak, these worsening economic conditions will likely have a negative effect on the Company's sales and operating margin growth rates across all segments for at least the remainder of the current fiscal year.

See a detailed discussion of significant risk factors that have the potential to cause our actual results to differ materially from our expectations included in

Operating Results

Three Months Ended September 27, 2008 Compared to Three Months Ended September 29, 2007

During the second quarter of Fiscal 2009, we reported revenues of $1.429 billion, net income of $161.0 million and net income per diluted share of $1.58. This compares to revenues of $1.299 billion, net income of $115.3 million and net income per diluted share of $1.09 during the second quarter of Fiscal 2008.

Our operating performance for the three months ended September 27, 2008 was primarily driven by 10.0% revenue growth, principally due to strength in our European Wholesale business, domestic shipments of our new American Living product line, increased global Retail sales, and favorable foreign currency effects. These increases were partially offset by lower wholesale sales to our traditional department and specialty store customers in the U.S. associated with the current negative economic environment. We also experienced an increase in gross profit percentage of 170 basis points to 55.2%, primarily due to the continued growth of our European wholesale operations and the net decrease of unfavorable purchase accounting effects primarily in our Retail segment, offset in part by higher reductions in the carrying cost of our retail inventory. These increases were partially offset by higher selling, general and administrative ("SG&A") expenses attributable largely to our new business initiatives.

Net income and net income per diluted share increased during the second quarter of Fiscal 2009 as compared to the second quarter of Fiscal 2008, principally due to a $50.3 million increase in operating income, offset in part by a $8.6 million increase in the provision for income taxes.

Six Months Ended September 27, 2008 Compared to Six Months Ended September 29, 2007

During the six months ended September 27, 2008, we reported revenues of $2.542 billion, net income of $256.2 million and net income per diluted share of $2.51. This compares to revenues of $2.369 billion, net income of $203.6 million and net income per diluted share of $1.92 during the six months ended September 29, 2007.

Our operating performance for the six months ended September 27, 2008 was primarily driven by 7.3% revenue growth, principally due to strength in our European Wholesale business, domestic shipments of our new American Living product line, increased global Retail sales, and favorable foreign currency effects. These increases were partially offset by lower wholesale sales to our traditional department and specialty store customers in the U.S. associated with the current negative economic environment. We also experienced an increase in gross profit percentage of 180 basis points to 56.1%, primarily due to the continued growth of our European wholesale operations and the net decrease of unfavorable purchase accounting effects primarily in our Retail segment, offset in part by higher reductions in the carrying cost of our retail inventory. These increases were partially offset by higher SG&A expenses attributable largely to our new business initiatives.

Net income and net income per diluted share increased during the six months ended September 27, 2008 as compared to the six months ended September 29, 2007, principally due to a $51.1 million increase in operating income, offset in part by a $2.8 million increase in the provision for income taxes.

Financial Condition and Liquidity

Our financial position reflects the overall relative strength of our business results. We ended the first half of Fiscal 2009 in a net debt position (total debt less total cash and cash equivalents) of $21.6 million, compared to a net debt position of $127.7 million as of the end of Fiscal 2008.

The decrease in our net debt position as of September 27, 2008 as compared to the end of Fiscal 2008 was primarily due to growth in operating cash flows, partially offset by our treasury stock repurchases, capital expenditures and the funding of our recent Japanese Childrenswear and Golf Acquisition (as defined under "Recent Developments"). Our short-term investments, classified in our consolidated balance sheet outside of cash and cash equivalents, increased to $92.3 million as of September 27, 2008, compared to $74.3 million as of the end of Fiscal 2008. Our stockholders' equity increased to $2.525 billion as of September 27, 2008, compared to $2.390 billion as of March 29, 2008. This increase was primarily due to our higher net income during the first half of Fiscal 2009, offset in part by our share repurchase activity.

We generated $388.0 million of cash from operations during the six months ended September 27, 2008, compared to $254.2 million during the six months ended September 29, 2007. We used our cash availability to support our common stock repurchase program, to reinvest in our business through capital spending, to fund our recent Japanese Childrenswear and Golf Acquisition for approximately $26.0 million, and to repay $196.8 million of debt that matured in May 2008 relating to our Japanese Business Acquisitions (as defined under "Recent Developments"). In particular, we used $169.3 million to repurchase 2.5 million shares of Class A common stock. We also spent $85.3 million for capital expenditures primarily associated with global retail store expansion, construction and renovation of department store shop-in-shops and investments in our facilities and technological infrastructure.

Transactions Affecting Comparability of Results of Operations and Financial Condition

The comparability of the Company's operating results for the three-month and six-month periods ended September 27, 2008 and September 29, 2007 has been affected by acquisitions that occurred in the second quarter of Fiscal 2009, the first quarter of Fiscal 2008 and the fourth quarter of Fiscal 2007. Specifically, the Company completed the Japanese Childrenswear and Golf Acquisition on August 1, 2008 (as defined and discussed under "Recent Developments"), the Japanese Business Acquisitions on May 29, 2007, the Small Leathergoods Business Acquisition on April 13, 2007 and the RL Media Minority Interest Acquisition on March 28, 2007 (each as defined and discussed in Note 5 of the Fiscal 2008 10-K).

The following discussion of results of operations highlights, as necessary, the significant changes in operating results arising from these items and transactions. However, unusual items or transactions may occur in any period. Accordingly, investors and other financial statement users individually should consider the types of events and transactions that have affected operating trends.

Recent Developments

Japanese Childrenswear and Golf Acquisition

On August 1, 2008, in connection with the transition of the Polo-branded childrenswear and golf apparel businesses in Japan from a licensed to a wholly owned operation, the Company acquired certain net assets (including certain inventory) from Naigai Co. Ltd. ("Naigai") in exchange for a payment of approximately ¥2.8 billion (approximately $26 million as of the acquisition date) and certain other consideration (the "Japanese Childrenswear and Golf Acquisition"). Naigai was the Company's licensee for childrenswear, golf apparel and hosiery under the Polo by Ralph Lauren and Ralph Lauren brands in Japan. In conjunction with the Japanese Childrenswear and Golf Acquisition, the Company also entered into an additional 5-year licensing and design-related agreement with Naigai for Polo and Chaps-branded hosiery in Japan and a transition services agreement for the provision of a variety of operational, human resources and information systems-related services over a period of up to eighteen months from the date of the closing of the transaction.

Japanese Business Acquisitions

On May 29, 2007, the Company completed the transactions to acquire control of certain of its Japanese businesses that were formerly conducted under licensed arrangements, consistent with the Company's long-term strategy of international expansion. In particular, the Company acquired approximately 77% of the outstanding shares of Impact 21 Co., Ltd. ("Impact 21") that it did not previously own in a cash tender offer (the "Impact 21 Acquisition"), thereby increasing its ownership in Impact 21 from approximately 20% to approximately 97%. Impact 21 previously conducted the Company's men's, women's and jeans apparel and accessories business in Japan under a pre-existing, sub-license arrangement. In addition, the Company acquired the remaining 50% interest in Polo Ralph Lauren Japan Corporation ("PRL Japan"), which holds the master license to conduct Polo's business in Japan, from Onward Kashiyama and Seibu (the "PRL Japan Minority Interest Acquisition"). Collectively, the Impact 21 Acquisition and the PRL Japan Minority Interest Acquisition are herein referred to as the "Japanese Business Acquisitions."

The purchase price initially paid in connection with the Japanese Business Acquisitions was approximately $360 million, including transaction costs of approximately $12 million. In January 2008, at an Impact 21 shareholders meeting, the Company obtained the necessary approvals to complete the process of acquiring the remaining approximately 3% of outstanding shares not exchanged as of the close of the tender offer period (the "minority squeeze-out"). In February 2008, the Company acquired approximately 1% of the remaining Impact 21 shares outstanding at an aggregate cost of $5 million. During the first quarter of Fiscal 2009, the Company completed the minority squeeze-out at an aggregate cost of approximately $9 million.

The Company funded the Japanese Business Acquisitions with available cash on-hand and ¥20.5 billion of borrowings under a one-year term loan agreement pursuant to an amendment and restatement to the Company's existing credit facility. The Company repaid the borrowing by its maturity date on May 22, 2008 using $196.8 million of Impact 21's cash on-hand acquired as part of the acquisition.

The results of operations for Impact 21, which were previously accounted for using the equity method of accounting, have been consolidated in the Company's results of operations commencing April 1, 2007. Accordingly, the Company recorded within minority interest expense the amount of Impact 21's net income allocable to the holders of the approximate 80% of the Impact 21 shares not owned by the Company prior to the closing date of the tender offer. The results of operations for PRL Japan had already been consolidated by the Company in all prior periods.

American Living

In Fiscal 2008, the Company launched American Living, a new lifestyle brand created exclusively in the U.S. for distribution by J.C. Penney Company, Inc. ("JCPenney") through the Company's new Global Brand Concepts ("GBC") group. The Company began shipping related product to JCPenney in December 2007 to support the launch of this new product line. American Living and the introduction of new product categories in both the U.S. and overseas are expected to be adversely impacted during at least the remainder of Fiscal 2009 by ongoing global economic uncertainty.

RESULTS OF OPERATIONS

Three Months Ended September 27, 2008 Compared to Three Months Ended September
29, 2007

The following table summarizes our results of operations and expresses the
percentage relationship to net revenues of certain financial statement captions:


                                                        Three Months Ended
                                                September 27,        September 29,
                                                    2008                 2007             $ Change       % Change
                                                        (millions, except per share data)

Net revenues                                   $       1,428.9      $       1,299.1      $    129.8           10.0   %
Cost of goods sold(a)                                   (640.7 )             (603.9 )         (36.8 )          6.1   %

Gross profit                                             788.2                695.2            93.0           13.4   %
Gross profit as % of net revenues                         55.2 %               53.5 %
Selling, general and administrative
expenses(a)                                             (533.2 )             (488.2 )         (45.0 )          9.2   %
SG&A as % of net revenues                                 37.3 %               37.6 %
Amortization of intangible assets                         (5.0 )              (14.4 )           9.4          (65.3 ) %
Impairment of assets                                      (7.1 )                  -            (7.1 )           NM

Operating income                                         242.9                192.6            50.3           26.1   %
Operating income as % of net revenues                     17.0 %               14.8 %
Foreign currency gains (losses)                            2.7                 (0.9 )           3.6         (400.0 ) %
Interest expense                                          (6.1 )               (6.2 )           0.1           (1.6 ) %
Interest and other income, net                             5.9                  5.5             0.4            7.3   %
Equity in income (loss) of equity-method
investees                                                 (0.8 )               (0.6 )          (0.2 )         33.3   %
Minority interest expense                                    -                 (0.1 )           0.1         (100.0 ) %

Income before provision for income taxes                 244.6                190.3            54.3           28.5   %
Provision for income taxes                               (83.6 )              (75.0 )          (8.6 )         11.5   %

Effective tax rate(b)                                     34.2 %               39.4 %
Net income                                     $         161.0      $         115.3      $     45.7           39.6   %

Net income per share - Basic                   $          1.62      $          1.12      $     0.50           44.6   %

Net income per share - Diluted                 $          1.58      $          1.09      $     0.49           45.0   %

(a) Includes total depreciation expense of $42.0 million and $37.1 million for the three-month periods ended September 27, 2008 and September 29, 2007, respectively.

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

NM Not meaningful.

Net Revenues. Net revenues increased by $129.8 million, or 10.0%, to $1.429 billion in the second quarter of Fiscal 2009 from $1.299 billion in the second quarter of Fiscal 2008. The increase was principally due to strength in

our Wholesale business and increased global Retail sales (both including favorable foreign currency effects). Excluding the effect of foreign currency, net revenues increased by 7.4%. On a reported basis, Wholesale revenues increased by $74.4 million, primarily as a result of the inclusion of revenues from the newly launched American Living product line and strong performance in Europe, offset in part by decreased sales in our core domestic product lines. Retail revenues increased by $56.6 million as a result of improved comparable global retail store sales, continued store expansion and growth in RalphLauren.com sales. Licensing revenue remained relatively consistent with the comparable prior year period.

Net revenues for our three business segments are provided below:

                                Three Months Ended
                         September 27,       September 29,
                             2008                2007            $ Change       % Change
                                              (millions)

   Net Revenues:
   Wholesale            $         846.2     $         771.8     $     74.4            9.6   %
   Retail                         530.6               474.0           56.6           11.9   %

Total net revenues $ 1,428.9 $ 1,299.1 $ 129.8 10.0 %

Wholesale net revenues - The net increase primarily reflects:

. . .