RLRalph Lauren Corporation

We note you furnished full non-U.S. GAAP financial statements on pages 15 through 18. We consider the presentation of a non-GAAP income statement, alone or as part of the required non-GAAP reconciliation, as giving undue prominence to non-GAAP measures.

Rest of the question

Please refer to Question 102.10 of the Division of Corporation Finance’s Compliance & Disclosure Interpretations on Non-GAAP Financial Measures and revise to remove this presentation in future filings as necessary. Footnotes to Reconciliation of Non-U.S. GAAP Financial Measures, page 19 We note adjustments (f) and (g) exclude marketing and advertising expenses. Explain how you determined it is appropriate based on the guidance in Question 100.01 of the Division of Corporation Finance's Compliance & Disclosure Interpretations on Non- GAAP Financial Measures since it appears the adjustments represent normal 2. operating expenses related to your business. Please advise or revise your future filings to remove these adjustments. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Gross Profit, page 52 3. We note your disclosure that gross profit as a percentage of net revenues is dependent upon a variety of factors, including changes in the relative sales mix among distribution channels, changes in the mix of products sold, pricing, the timing and level of promotional activities, foreign currency exchange rates, and fluctuations in product costs. Please revise your future filings to quantify the extent to which changes in gross profit, as well as changes in segment operating margins (discussed on page 54) were materially impacted by changes in volume, product mix, and price. In this regard, expand your disclosure to explain any increases/decreases in segment net revenues (discussion starting on page 51) resulting from changes in volume of products sold, changes in average unit retail, and to quantify the impact of each of these underlying drivers. See Item 303(b)(2)(iii) of Regulation S-K. In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.

We respectfully acknowledge the

Staff's comment. In future filings, we will revise the presentation of our non-GAAP reconciliations to provide a separate reconciliation for each non-GAAP measure. This will ensure that such reconciliations do not resemble a non-GAAP income statement, in accordance with the guidance provided in Question 102.10 of the Division of Corporation Finance’s Compliance & Disclosure Interpretations on

Non-GAAP Financial Measures. Read in the reply ↗

We note in connection with the Way Forward Plan, on March 30, 2017, your Board of Directors approved the closure of your Polo store in New York City. You disclose that this location is no longer generating revenue and has no other economic activity. We also note that this appears to be a “build-to-suit” lease which has been capitalized.

Rest of the question

Please provide us with your impairment analysis of this leased asset, including your assumptions used to determine fair value.

We hereby advise the Staff that our former Polo store at 711 Fifth Avenue in New York City, which was closed during the first quarter of Fiscal 2018 in connection with our Way Forward Plan, has been accounted for as a “build-to-suit” lease, whereby the Company was deemed the owner of the underlying real estate asset for accounting purposes.

Rest of the answer

The following, most recent impairment analysis of this leased asset was performed as of March 30, 2019, in accordance with Accounting Standards Codification (“ASC”) Topic 360, “Property, Plant, and Equipment.”

Indicators of Impairment – Step 1

A long-lived asset shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Indicators of impairment were deemed to exist for the leased asset as the Company has vacated this location and is no longer using it to generate revenues, coupled with the declining state of the Fifth Avenue commercial real estate market, including increased availability of retail space and declining market rents. Based upon the presence of these impairment indicators, we have periodically evaluated the leased asset for impairment since our decision to close the store, most recently as of March 30, 2019.

Test for Recoverability – Step 2

In determining whether the leased asset was recoverable, we compared the estimated undiscounted cash flows expected to be generated by the asset during the remainder of its lease term to its carrying amount. Given that the store in question has been vacant since its closure during the first quarter of Fiscal 2018, the only other potential cash flows expected to arise from the Company’s use of the asset relate to any sublease income it is able to generate during the remainder of the lease term. However, as we have been unable to successfully sublease the space to date, coupled with the declining Fifth Avenue commercial real estate market rents, we concluded that any potential sublease income that could be generated during the remaining lease term would be lower than the leased asset’s carrying amount. Accordingly, it was concluded that the leased asset was not recoverable and therefore we proceeded to Step 3 of the impairment analysis.

Measuring an Impairment – Step 3

Under the build-to-suit lease accounting model, we are deemed the owner of the leased asset for accounting purposes. Accordingly, estimating the fair value of the asset was performed from an ownership perspective (and not from that of a lessee). With the assistance of a third-party real estate appraiser with expertise in the New York City borough of Manhattan, we determined the estimated fair value of the asset on a “fee simple” basis (i.e., from an ownership perspective). In accordance with valuation techniques permitted under ASC 820, “Fair Value Measurement,” such analysis was performed using the direct capitalization method, an income approach, incorporating assumptions for market rental rates, market-level vacancies and collection loss factors, market expenses associated with the ownership of real estate, and a market capitalization rate. Additionally, recent sales comparisons were considered under a market approach. Based on this analysis, the estimated fair value of the asset was determined to be approximately $295 million which, while lower than previous analyses, was still greater than the related carrying amount of approximately $165 million. Accordingly, it was concluded that the asset was not impaired as of March 30, 2019.

I am happy to discuss this response with you at your convenience.

Read in the reply ↗