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 continue to expand internationally;

• the impact of the global economic 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 28, 2009 (the "Fiscal 2009 10-K"). There are no material changes to such risk factors, nor are there any identifiable previously undisclosed risks 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 "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 2010 will end on April 3, 2010 and will be a 53-week period ("Fiscal 2010"). Fiscal year 2009 ended on March 28, 2009 and reflected a 52-week period ("Fiscal 2009"). In turn, the first quarter for Fiscal 2010 ended on June 27, 2009 and was a 13-week period. The first quarter for Fiscal 2009 ended on June 28, 2008 and also was 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 and liquidity, 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 period ended June 27, 2009. 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 periods ended June 27, 2009 and June 28, 2008.

• Financial condition and liquidity. This section provides an analysis of our cash flows for the three-month periods ended June 27, 2009 and June 28, 2008, as well as a discussion of our financial condition and liquidity as of June 27, 2009 as compared to the end of Fiscal 2009. 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 2009.

• Market risk management. This section discusses any significant changes in our interest rate, foreign currency and investment risk exposures, the types of derivative instruments used to hedge those exposures, and/or underlying market conditions since the end of Fiscal 2009.

• Critical accounting policies. This section discusses any significant changes in our accounting policies since the end of Fiscal 2009. 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 2009 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 recently issued.

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, American Living, Chaps and Club Monaco, among others.

We classify our businesses into three segments: Wholesale, Retail and Licensing. Our wholesale business (representing approximately 57% of Fiscal 2009 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 approximately 39% of Fiscal 2009 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 approximately 4% of Fiscal 2009 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 28% of our Fiscal 2009 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 shopping periods in the Retail segment. Accordingly, our operating results and cash flows for the three months ended June 27, 2009 are not necessarily indicative of the results and cash flows that may be expected for the full Fiscal 2010.

Summary of Financial Performance

Global Economic Developments

As discussed in our Fiscal 2009 10-K, the state of the global economy has continued to negatively impact to a significant degree the level of consumer spending for discretionary items over the course of the past year. This has affected our business as it is highly dependent on consumer demand for our products. Particularly, beginning in October 2008, our Retail segment began to experience sharp declines in comparable store sales, as did many of our traditional wholesale customers. To realign our cost base with lower sales trends, the Company initiated a restructuring plan during the fourth quarter of Fiscal 2009. Cost reduction actions related to the restructuring plan are anticipated to result in annualized pretax cash savings of approximately $25 million beginning in Fiscal 2010.

The global macroeconomic environment and the related anticipated contraction in the level of worldwide consumer spending will likely continue to have a negative effect on our sales and operating margins across all segments for the foreseeable future. As of June 27, 2009, largely in response to the global macroeconomic environment, our traditional retail partners have reduced their initial wholesale orders for Fall 2009 apparel products by approximately 10%.

We continue to evaluate strategies to control costs by focusing on operational efficiencies on a Company-wide basis, by conservatively managing our inventory levels, and by controlling capital spending. The implementation of these strategies may necessitate additional cost-savings actions going forward.

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 2009 10-K.

Operating Results

During the first quarter of Fiscal 2010, we reported revenues of $1.024 billion, net income of $76.8 million and net income per diluted share of $0.76. This compares to revenues of $1.114 billion, net income of $95.2 million and net income per diluted share of $0.93 during the first quarter of Fiscal 2009.

Our operating performance for the three months ended June 27, 2009 was primarily affected by an 8.1% decline in revenues, principally due to lower revenues from our domestic Wholesale business and a net decline in our comparable global Retail store sales largely associated with the current global economic environment. The decrease also was due to net unfavorable foreign currency effects. Despite the decline in revenues, we experienced an increase in gross profit percentage of 140 basis points to 58.7% primarily due to improved sell-through performance in our European businesses and lower reductions in the carrying cost of our retail inventory, as well as growth in our Japanese Wholesale operations due to the Japanese Childrenswear and Golf Acquisition (as defined and discussed under "Recent Developments" below). Selling, general and administrative ("SG&A") expenses decreased during the first quarter of Fiscal 2010 primarily as a result of lower variable expenses associated with lower sales and the implementation of various cost-savings initiatives in response to the current economic downturn.

Net income and net income per diluted share decreased during the first quarter of Fiscal 2010 as compared to the first quarter of Fiscal 2009, principally due to a $29.9 million decrease in operating income, offset in part by a $13.7 million decrease 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 quarter of Fiscal 2010 in a net cash and short-term investments position (total cash and cash equivalents, plus short-term investments less total debt) of $670.9 million, compared to $413.5 million as of the end of Fiscal 2009.

The improvement in our financial position was primarily due to our operating cash flows, partially offset by investing activities. Our stockholders' equity increased to $2.831 billion as of June 27, 2009, compared to $2.735 billion as of March 28, 2009, primarily due to our net income during the first quarter of Fiscal 2010.

We generated $292.3 million of cash from operations during the three months ended June 27, 2009, compared to $396.7 million during the three months ended June 28, 2008. We used some of our cash availability to reinvest in our business. In particular, we spent $17.8 million for capital expenditures primarily associated with our 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 months ended June 27, 2009 and June 28, 2008 has been affected by the Japanese Childrenswear and Golf Acquisition (as defined and discussed under "Recent Developments" below) that occurred on August 1, 2008.

The following discussion of results of operations highlights, as necessary, the significant changes in operating results arising from this transaction. 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

Agreement to Acquire Southeast Asia Licensed Operations

In February 2009, the Company entered into an agreement with Dickson Concepts International Limited ("Dickson") to assume direct control of its Polo-branded licensed apparel businesses in Southeast Asia effective January 1, 2010 in exchange for a payment of $20 million and certain other consideration. Dickson is currently the Company's licensee for Polo-branded apparel in the Southeast Asia region, which is comprised of China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand. In connection with this agreement, the Company entered into a one-year extension of its underlying sub-license agreement with Dickson, which was originally scheduled to expire on December 31, 2008. The transaction is subject to certain customary closing conditions. The Company expects to account for this transaction as an asset purchase during the fourth quarter of Fiscal 2010.

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 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"). The Company funded the Japanese Childrenswear and Golf Acquisition with available cash on-hand. 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.

The results of operations for the Polo-branded childrenswear and golf apparel businesses in Japan have been consolidated in the Company's results of operations commencing August 2, 2008.

RESULTS OF OPERATIONS

Three Months Ended June 27, 2009 Compared to Three Months Ended June 28, 2008

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


                                                         Three Months Ended
                                                      June 27,         June 28,
                                                        2009             2008          $ Change        % Change
                                                          (millions, except per share data)

Net revenues                                         $   1,023.7       $ 1,113.6      $    (89.9 )        (8.1)%
Cost of goods sold(a)                                     (422.5 )        (475.2 )          52.7         (11.1)%

Gross profit                                               601.2           638.4           (37.2 )        (5.8)%
Gross profit as % of net revenues                           58.7 %          57.3 %
Selling, general and administrative expenses(a)           (478.9 )        (486.5 )           7.6          (1.6)%
SG&A as % of net revenues                                   46.8 %          43.7 %
Amortization of intangible assets                           (5.2 )          (4.9 )          (0.3 )         6.1 %
Restructuring charges                                       (0.4 )          (0.4 )             -           0.0 %

Operating income                                           116.7           146.6           (29.9 )       (20.4)%
Operating income as % of net revenues                       11.4 %          13.2 %
Foreign currency gains (losses)                              0.9             0.1             0.8         800.0 %
Interest expense                                            (6.6 )          (7.0 )           0.4          (5.7)%
Interest and other income, net                               2.8             7.2            (4.4 )       (61.1)%
Equity in income (loss) of equity-method investees           0.3            (0.7 )           1.0        (142.9)%

Income before provision for income taxes                   114.1           146.2           (32.1 )       (22.0)%
Provision for income taxes                                 (37.3 )         (51.0 )          13.7         (26.9)%

Effective tax rate(b)                                       32.7 %          34.9 %
Net income                                           $      76.8       $    95.2      $    (18.4 )       (19.3)%

Net income per share - Basic                         $      0.77       $    0.96      $    (0.19 )       (19.8)%

Net income per share - Diluted                       $      0.76       $    0.93      $    (0.17 )       (18.3)%

(a) Includes total depreciation expense of $39.1 million and $41.2 million for the three-month periods ended June 27, 2009 and June 28, 2008, respectively.

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

Net Revenues. Net revenues decreased by $89.9 million, or 8.1%, to $1.024 billion in the first quarter of Fiscal 2010 from $1.114 billion in the first quarter of Fiscal 2009. The decrease was principally due to lower revenues from our global Wholesale business and a net decline in our global Retail store sales, both including net unfavorable foreign currency effects. Excluding the effect of foreign currency, net revenues decreased by 5.8%. On a reported basis, Wholesale revenues decreased by $55.0 million, primarily as a result of a net sales decline in most of our domestic product lines largely due to the ongoing challenging U.S. retail environment, offset in part by increased revenues from our Japanese business as a result of the Japanese Childrenswear and Golf Acquisition. Retail revenues decreased by $29.4 million primarily as a result of a net decrease in comparable global full-price and domestic factory store sales largely associated with the current negative global economic environment, partially offset by an increase in our comparable European factory store sales, continued store expansion and growth in RalphLauren.com sales. Licensing revenue decreased $5.5 million, primarily due to a decrease in international licensing royalties as a result of the loss of licensing revenues from the Japanese childrenswear and golf businesses, which are now consolidated as part of the Wholesale segment.

Net revenues for our three business segments are provided below:

                                  Three Months Ended
                              June 27,        June 28,
                                2009            2008          $ Change      % Change
                                             (millions)

         Net Revenues:
         Wholesale            $   519.5     $      574.5     $    (55.0 )      (9.6)%
         Retail                   463.0            492.4          (29.4 )      (6.0)%
         Licensing                 41.2             46.7           (5.5 )     (11.8)%

         Total net revenues   $ 1,023.7     $    1,113.6     $    (89.9 )      (8.1)%

Wholesale net revenues - The net decrease primarily reflects:

• a $45 million aggregate net decrease in our domestic businesses primarily due to a decrease in menswear and womenswear sales (including a decline in revenues from related American Living product categories) as a result of the ongoing challenging U.S. retail environment (as discussed further in the "Overview" section), offset in part by an increase in childrenswear sales;

• a $14 million net decrease in revenues due to an unfavorable foreign currency effect related to the weakening of the Euro, partially offset by a favorable foreign currency effect related to the strengthening of the Yen, both in comparison to the U.S. dollar in the first quarter of Fiscal 2010; and

• a $2 million net decrease in our European businesses on a constant currency basis primarily driven by decreased sales in our menswear and childrenswear product lines, partially offset by an increase in womenswear sales due in part to the launch of the Lauren product line in Europe in the first quarter of Fiscal 2010.

The above net decrease was partially offset by:

• a $6 million net increase in our Japanese operations on a constant currency basis as a result of the inclusion of revenues from the Japanese Childrenswear and Golf Acquisition (see "Recent Developments" for further discussion), offset in part by sales declines in our core businesses.

Retail net revenues - For purposes of the discussion of Retail operating performance below, we refer to the measure "comparable store sales." Comparable store sales refer to the growth of sales in stores that are open for at least one full fiscal year. Sales for stores that are closing during a fiscal 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 closed for 30 or more consecutive days for renovation are also excluded from the calculation of comparable store sales until such stores have been in their location or in a newly renovated state for at least one full fiscal year. Comparable store sales information includes both Ralph Lauren (including Rugby) and Club Monaco stores, as well as RalphLauren.com.

The net decrease in retail net revenues primarily reflects:

• a $47 million aggregate net decrease in comparable physical store sales driven by our global full-price and domestic factory stores, including a net aggregate unfavorable foreign currency effect of $13 million primarily related to the weakening of the Euro in comparison to the U.S. dollar in the first quarter of Fiscal 2010. This decrease was partially offset by a $5 million increase in RalphLauren.com sales. Comparable store sales are provided below:

                                                                         Three Months
                                                                            Ended
                                                                        June 27, 2009

Increases/(decreases) in comparable store sales as reported:
Full-price Ralph Lauren store sales                                                (25 )%
Full-price Club Monaco store sales                                                 (15 )%
Factory store sales                                                                 (4 )%
RalphLauren.com sales                                                              14  %
Total decrease in comparable store sales as reported                                (9 )%

Increases/(decreases) in comparable store sales excluding the effect
of foreign currency:
Full-price Ralph Lauren store sales                                                (22 )%
Full-price Club Monaco store sales                                                 (15 )%
Factory store sales                                                                 (2 )%
RalphLauren.com sales                                                              14  %
Total decrease in comparable store sales excluding the effect of
foreign currency                                                                    (7 )%

The above net decrease was partially offset by:

• a $13 million aggregate net increase in sales from non-comparable stores, primarily relating to new store openings within the past twelve months. There was a net increase in average global store count of 10 stores, to a total of 325 stores, as compared to the first quarter of Fiscal 2009. The net increase in store count was primarily due to a number of new domestic and international full-price and factory store openings.

Licensing revenue - The net decrease primarily reflects:

• a $3 million decrease in international licensing royalties, primarily due to the Japanese Childrenswear and Golf Acquisition (see "Recent Developments" for further discussion); and

• a $2 million decrease in domestic licensing royalties, primarily driven by a decrease in fragrance-related royalties.

Gross Profit. Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and import costs, as well as changes in reserves for shrinkage and inventory realizability. The costs of selling merchandise, including those associated with preparing the merchandise for sale, such as picking, packing, warehousing and order charges, are included in SG&A expenses.

. . .