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Ralph Lauren increases dividend by 25%, approves $1B share buyback program

Lifestyle brand Ralph Lauren Corp. said June 7 its board declared a quarterly dividend of 62.5 cents per share, a 25% increase.

The dividend is payable July 13 to shareholders of record at the close of business June 29. The company said this represents a new annual dividend of $2.50 per share.

The company also authorized a $1 billion share buyback program.

The New York-based company's repurchase program is in addition to the $100 million available at the end of the fourth quarter of fiscal 2018. With this, the company's total current authorization is $1.1 billion. Ralph Lauren said it plans to return 100% of free cash flow to shareholders in the next five years, returning over $2.5 billion on a cumulative basis through fiscal 2023 by dividends and repurchases.

The board also approved a restructuring plan for fiscal 2019. The company expects to incur restructuring charges between $100 million to $150 million associated with the activities primarily related to the rightsizing and consolidation of its global distribution network and corporate offices. These charges are apart from $100 million of Way Forward Plan charges that are expected to be recognized in fiscal 2019. The company expects the restructuring activities to result in approximately $60 million to $80 million of gross annualized expense savings, in addition to the cost savings realized associated with the company's Way Forward Plan.

The apparel retailer reaffirmed its fiscal 2019 outlook while providing a five-year financial outlook. Over the next five years, from fiscal 2018 to fiscal 2023, Ralph Lauren expects revenue to grow at a compounded annual growth rate of low to mid-single digits in constant currency. The company aims for a revenue growth in fiscal 2020 in constant currency.

In addition, the retailer said from fiscal first quarter 2019, its comparable store sales will reflect the change in sales of its stores that have been open for at least 13 fiscal months.

Ralph Lauren also nominated Linda Kozlowski to the company's board. Kozlowski, who is currently the COO for global marketplace Etsy Inc., will stand for election at the retailer's 2018 annual meeting of shareholders in August.