This summary is based on the fourth quarter fiscal 2008 earnings call conducted by Polo Ralph Lauren Corp. (RL: chart) on May 28, 2008.

Management:

- President and COO: Roger N. Farah
- CFO: Tracey T. Travis
- Investor Relations: James Hurley

Key Investors Issues

- Sales increased 20% to $1.24 billion.
- Net income increased 41% to $104 million or $1.00 from $73 million or 68 cents in the prior year.
- The firm repurchased 2.5 million shares of Class A common stock totaling $156 million.

Full Year Highlights:

- Net revenues grew 14% to $4.88 billion from $4.30 billion in 2007.
- Net income grew to $420 million, or $3.99 per diluted share, compared to net income of $401 million, or $3.73 per diluted share in the prior year.
- The firm repurchased 6.1 million total shares of Class A common stock for approximately $476 million.

Fourth Quarter Highlights

Polo achieved consolidated net revenues of $1.24 billion, an increase of 20% over the prior year due to a combination of organic growth and acquisition.

- It experienced strong sales across all distribution channels in Europe and in the U.S., deliveries for the launch of American Living at JC Penney also contributed to revenue growth.
- Consolidated comps in the directly operated retail stores were up 8.9% during the quarter, which was achieved on top of a 6.3% comp gain in the prior period.
- Gross profit dollars increased 21% to $674 million and the gross profit rate increased 20 basis points to 54.3% compared to 54.1% in 2007.
- Operating expenses increased 21% to $530 million compared to $438 million in 2007, reflecting the impact of the newly acquired businesses, higher stock-based compensation costs and higher expenses commensurate with the overall growth in the core businesses.

Operating income increased 20% to $144 million including approximately $8 million in non-cash amortization related to the purchase accounting for the recent acquisition.

- Net income increased 41% to $104 million or $1.00 from $73 million or 68 cents in the prior year as a result of growth in operating income as well a lower effective tax rate.
- The firm had $626 million in cash, cash equivalents and short-term investments compared to $564 million in 2007.
- Inventory was down 2% from the same period in the prior year, which compares to the 20% sales growth and includes the inventory associated with Japanese and small leather goods acquisitions.
- The firm repurchased 2.5 million shares of Class A common stock totaling $156 million.
- Polo currently has 392 million available under the share repurchase program and this includes a new $250 million authorization recently approved by the Board of Directors.

- Wholesale segment, sales grew 25% to $786 million or 13% excluding the Japan and small leather goods acquisitions.
- In the U.S., the increase in wholesale revenues was primarily driven by American Living as well as growth in Chaps women''s wear and the expanded footwear assortment.
- U.S. shipments of men''s sportswear and Lauren products were down, reflecting the impact of both slowing traffic to U.S. department stores as well as a more conservative U.S. consumer.
- European sales continued to show growth across all product categories and most regions with particular strength in Italy and the UK.
- The wholesale operating margin increased 28% to $178 million and reported wholesale operating margin was 22.6%, 50 basis points higher than the prior year''s operating margin.

- Retail group sales increased 16% to $400 million and overall comp store sales increased 8.9%, reflecting an increase of 5.6% at Ralph Lauren stores, 10% at factory stores and 12.5% at Club Monaco stores.
- RalphLauren.com sales were up 36% over the comparable period as comp growth in the U.S. was impacted by promotional activity in January and February as Polo was clearing fall holiday merchandise.

It opened five new stores, including a children''s store at the Short Hills Mall in New Jersey and a new Los Vegas location at the Palazzo Resort.

- The operating loss for the retail segment was $6 million, which compares to an operating loss of $2 million in 2007, reflective of increased occupancy costs related to future store openings and the cost of the new RalphLauren.com fulfillment center.
- Licensing royalties were $55 million, 2% below the prior year period and operating income decreased 26% to $27 million.
- The decline in licensing revenue and operating income was primarily due to the Japan acquisitions.

Operational Highlights:

- During the year, the firm integrated newly acquired businesses, new territories and created an entirely new lifestyle brand.
- The firm made significant strides in merchandise development, including expanding the highly successful black label collections for both men and women.
- Developments also include introducing the revitalized Lauren and Ralph Lauren collection footwear to selected U.S. wholesale accounts and creating a new dress division to support the Lauren American Living and Chaps brand.
- It also assumed direct control of the small leather goods products and successfully integrated the denim product offerings into a variety of the brands from a standalone business, allowing it to elevate the product and improve profitability.

The firm launched American Living at JC Penney, which is the first brand developed by Global Brand Concepts group and represents a major evolution of the channel diversification strategy.

- In February 2008, the firm successfully delivered and installed all of the fixtures and merchandise to support the 575 door launch that included more than 40 product categories such as men''s women''s, children''s, home and accessory products.
- The launch was supported by an extensive print and television media advertising campaign that was created to communicate the full lifestyle positioning of American Living.
- The firm will continue to introduce new product categories over the next year including young men''s, infant, layette, toddlers and men''s and women''s outwear, sleepwear, socks and slippers for fall 2008.
- The strategy behind the Global Brand Concepts group is to leverage work on a global scale, which is consistent with the long-term goals to diversify the geographic revenue mix.