Ralph Lauren (0KTS) Risk Analysis

The global economy and retail industry are affected by numerous factors beyond our control, including, among others, changes in diplomatic and trade relationships (including the imposition of new tariffs or other changes to international trade policies or agreements); domestic and international political conditions; consumer perceptions of current and future economic conditions (including an economic slowdown or potential downturn, inflation, interest rates, foreign currency exchange rates, commodity availability and price (including fuel and energy costs)); employment levels and wage rates; stock market performance; housing market conditions; consumer debt levels and access to consumer credit; the health and stability of the banking sector; global food supplies; taxation; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; consumer perceptions of personal well-being and safety; man-made or natural disasters (including pandemic diseases); and weather conditions. In April 2025, the U.S. announced significant changes to its trade policies under the authority of the International Emergency Economic Powers Act ("IEEPA"), including widespread tariff increases on imported goods and the potential for additional tariffs and further increases to existing tariffs, and revisions or terminations of existing trade agreements. In response, many countries announced retaliatory tariffs on U.S. exports and other trade restrictions. In February 2026, the U.S. Supreme Court invalidated the IEEPA tariffs previously applied to our imports, after which the current administration announced a new round of tariffs under an alternative U.S. Trade Act authority. In March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection to refund IEEPA tariffs that were previously collected, and in April 2026, U.S. Customs and Border Protection announced the refund process leveraging the Consolidated Administration and Processing of Entries Claim Portal through a phased rollout. Although we have taken steps to preserve our rights with respect to potential refunds, there can be no assurance that we will receive any refunds, in whole or in part. These developments have increased uncertainty regarding the future relationship between the U.S. and other countries and could contribute to a global trade war, higher inflation, and a global economic slowdown, any of which has caused, and could continue to cause, volatility in global stock markets and foreign currency exchange rates. Other recent economic conditions, including increases in oil and other energy prices, ongoing inflationary pressures, organized labor disputes, high interest rates, significant foreign currency volatility, and military conflicts (as discussed below), continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond. In response to such pressures, as well as to reduce elevated inventory levels, many retailers (particularly in the U.S. and Europe) continue to resort to promotional activity in an attempt to offset traffic declines and increase conversion. Our gross margins could be adversely impacted if we were to apply a similar strategy over a prolonged period of time. The global economy has also been negatively impacted by ongoing military conflicts, including the conflicts involving Iran and other hostilities in the Middle East. Although our ongoing operations in the Middle East are not material, our business has been, and may continue to be, affected by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and financial market volatility, among other factors, which have adversely impacted consumer sentiment and confidence. It is not clear at this time how long these conflicts will endure, or if they will escalate further with additional countries taking part, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global economic slowdown or recession. Consumer purchases of discretionary items and luxury retail products, including our products, tend to decline during periods of economic weakness, high inflation, or rising interest rates, and at other times when disposable income is lower. Unfavorable economic conditions and other factors, such as pandemic diseases and other health-related concerns, political unrest, military conflicts, and acts of terrorism, may also reduce consumers' willingness and ability to travel to major cities and vacation destinations in which our stores and shop-within-shops are located. Further, consumers may prefer to spend more of their discretionary income on "experiences," such as dining and entertainment, over consumer goods. Accordingly, a downturn or an uncertain outlook in the economies in which we, or our wholesale customers and licensing partners, sell our products, or other changes in consumer preferences, may materially adversely affect our business.

The global economy and retail industry are affected by numerous factors beyond our control, including, among others, changes in diplomatic and trade relationships (including the imposition of new tariffs or other changes to international trade policies or agreements); domestic and international political conditions; consumer perceptions of current and future economic conditions (including an economic slowdown or potential downturn, inflation, interest rates, foreign currency exchange rates, commodity availability and price (including fuel and energy costs)); employment levels and wage rates; stock market performance; housing market conditions; consumer debt levels and access to consumer credit; the health and stability of the banking sector; global food supplies; taxation; the threat, outbreak, or escalation of terrorism, military conflicts, or other hostilities; consumer perceptions of personal well-being and safety; man-made or natural disasters (including pandemic diseases); and weather conditions. In April 2025, the U.S. announced significant changes to its trade policies under the authority of the International Emergency Economic Powers Act ("IEEPA"), including widespread tariff increases on imported goods and the potential for additional tariffs and further increases to existing tariffs, and revisions or terminations of existing trade agreements. In response, many countries announced retaliatory tariffs on U.S. exports and other trade restrictions. In February 2026, the U.S. Supreme Court invalidated the IEEPA tariffs previously applied to our imports, after which the current administration announced a new round of tariffs under an alternative U.S. Trade Act authority. In March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection to refund IEEPA tariffs that were previously collected, and in April 2026, U.S. Customs and Border Protection announced the refund process leveraging the Consolidated Administration and Processing of Entries Claim Portal through a phased rollout. Although we have taken steps to preserve our rights with respect to potential refunds, there can be no assurance that we will receive any refunds, in whole or in part. These developments have increased uncertainty regarding the future relationship between the U.S. and other countries and could contribute to a global trade war, higher inflation, and a global economic slowdown, any of which has caused, and could continue to cause, volatility in global stock markets and foreign currency exchange rates. Other recent economic conditions, including increases in oil and other energy prices, ongoing inflationary pressures, organized labor disputes, high interest rates, significant foreign currency volatility, and military conflicts (as discussed below), continue to impact consumer discretionary income levels, spending, and sentiment in the U.S. and beyond. In response to such pressures, as well as to reduce elevated inventory levels, many retailers (particularly in the U.S. and Europe) continue to resort to promotional activity in an attempt to offset traffic declines and increase conversion. Our gross margins could be adversely impacted if we were to apply a similar strategy over a prolonged period of time. The global economy has also been negatively impacted by ongoing military conflicts, including the conflicts involving Iran and other hostilities in the Middle East. Although our ongoing operations in the Middle East are not material, our business has been, and may continue to be, affected by the broader macroeconomic implications resulting from these and other military conflicts, including inflationary pressures, unfavorable foreign currency exchange rates, increases in energy prices, food shortages, and financial market volatility, among other factors, which have adversely impacted consumer sentiment and confidence. It is not clear at this time how long these conflicts will endure, or if they will escalate further with additional countries taking part, which could further amplify the impacts of the various macroeconomic factors described above and potentially result in a global economic slowdown or recession. Consumer purchases of discretionary items and luxury retail products, including our products, tend to decline during periods of economic weakness, high inflation, or rising interest rates, and at other times when disposable income is lower. Unfavorable economic conditions and other factors, such as pandemic diseases and other health-related concerns, political unrest, military conflicts, and acts of terrorism, may also reduce consumers' willingness and ability to travel to major cities and vacation destinations in which our stores and shop-within-shops are located. Further, consumers may prefer to spend more of their discretionary income on "experiences," such as dining and entertainment, over consumer goods. Accordingly, a downturn or an uncertain outlook in the economies in which we, or our wholesale customers and licensing partners, sell our products, or other changes in consumer preferences, may materially adversely affect our business.