I would now like to turn the conference over to our host, Mr. James Hurley. Please go ahead.
Good morning, and thank you for joining us on Ralph Lauren's Q4 and full year fiscal 2014 conference call. The agenda for this morning's call includes Jackie Nemerov, our President and Chief Operating Officer, who will give you an overview of the year and comment on our broader strategic initiatives. Chris Peterson, our Chief Administrative Officer and Chief Financial Officer, will provide operational and financial perspective on the Q4 in addition to reviewing our initial expectations for fiscal 2015. After the company's prepared remarks, we will open the call up for your questions, which we ask that you limit to 1 per caller. During today's call, we will be making some forward looking statements within the meaning of the federal securities laws, including our financial outlook.
Forward looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward looking statements. Our expectations contain many risks and uncertainties. The principal risks and uncertainties that could cause us to our results to differ materially from our current expectations are detailed in our SEC filings. With that, I'll turn the call over to Jackie.
Thank you, Jim, and good morning, everyone. We are pleased to be reporting better than expected 4th quarter and full year fiscal 14% revenue growth and 23% increase in earnings per share for the 4th quarter were a result of double digit top line expansion in each of our major geographic regions with Europe and Asia leading the pace in addition to strong profit flow through for core operations. The results reflect an acceleration from the 3rd quarter's strong growth rate despite a challenging retail environment, particularly in the United States. Our full year sales growth of 7% and earnings per share of $8.43 represent record levels for us and were achieved even with substantial investments in our growth initiatives and infrastructure and in the face of unfavorable foreign exchange headwinds through the quarter. When we provided our fiscal 2014 outlook a year ago, we characterized it as a tale of 2 halves.
We spoke about our spending margin being down in the first half impacted by more modest sales growth and upfront expenses related to the integration of formerly licensed operations and preopening costs for new stores. And we spoke about our second half in terms of an acceleration in revenue trends and improved profitability as a result of realizing the benefits of those newly integrated businesses and the store openings. The year played out as we anticipated, in fact a bit better than expected in the second half, which clearly demonstrates the discipline of our organization to both manage the business in real time and plan for the future. Fiscal 2014 was also a year of important progress on each of the company's long term growth objectives of extending our direct to consumer reach, expanding our international presence, innovation with new products and investing in our infrastructure. Our achievements included the creation of Polo for Women, the seamless transition of our Chapman sportswear business from licensed to owned, the integration of the Australia, New Zealand territories into our organization and a doubling of the size of ralphlauren.com's North American distribution center and a smooth transition to SAP for many of our most critical operations.
We also established a new leadership structure designed to enhance our progress on our long term growth objectives. We opened 46 stores during the year, which was an acceleration from the prior year and consistent with our focus on extending our direct to consumer reach. We also our direct to consumer reach. We also established greater clarity around our retail growth objectives with Polo Stores being an exciting new evolution in our direct to consumer efforts and a compelling complement to our Ralph Lauren luxury stores. Our global e commerce operations experienced another year of strong double digit expansion.
We expect this to continue to be one of our fastest growing channels over the next years, bolstered not only by consumer confidence in buying online, but also by new leadership of our e commerce team and a site re platform that will enhance functionality and allow us to provide an even stronger brand and customer experience. Turning now to our product. Both luxury apparel and accessories experienced significant growth during the year. Our men's Purple Label and Black Label lines were more fully developed through additional sportswear and denim elements respectively to provide more breadth to the product offering and more depth to their lifestyle expression. Men's and Women's Black Label performance was particularly strong as we see customers around the world connecting with this brand's modern streamlined sensibility.
We also saw continued momentum in outerwear and handbags with consumers responding positively to the distinctiveness of our aesthetic in these areas. Dresses were an important driver of growth in womenswear during the year. We began a more conservative focus on dresses about 5 years ago to both capitalize on an emerging trend and to express our brand voice in a category that was becoming increasingly important to the consumer. In a short period of time, through a combination of design strength, fit expertise and excellent value proposition and of course the strong appeal of our brand, we've established ourselves as a dominant force in the dress category with market leadership across nearly all of our wholesale distribution. Club Monaco also had a fantastic year, building on strong multi year trends.
The momentum has been equally strong at Club Monaco's 57 directly owned North American stores, e commerce operations and in international markets where the brand is present in over 120 points of distribution mostly concentrated in Asia. Club Monaco occupies a unique niche in the market offering the contemporary customer distinctive on trend merchandise at a great price. While women's has been a consistently strong performer over the years, the men's business had made great progress, thanks to the clarity of design direction and aesthetic, which is coming through in both the product and the shopping environment. We've supported Club Monaco's development by investing in growing and renovating the store base, most notably with the brand's spectacular new flagship in New York. Based on the success we've already seen, we intend to growth over the next 3 to 5 years.
The first initiative is what I'll call the intensified development of the Polo brand. Polo achieved a significant milestone in fiscal 2014 with the creation of Polo for Women. We are very excited about the long term potential for women's polo, especially given the broad global success of our men's polo product. Today, the split between our men's and women's mix is about sixty-forty. The overall marketplace is in the reverse and we believe the introduction of women's polo is an opportunity for us to increase the penetration of our women's business.
Women's polo will replace our existing women's blue label line, so the launch is not entirely incremental for us in the near term. Over the long term, however, we believe the breadth and scope of the line's aesthetic, fit and price points will address a much broader market than we did with Blue Label. We are also taking back our men's clothing license and we'll be launching an expanded line of Polo tailored clothing this fall. This more comprehensive assortment of suits, sport coats and trousers will allow Polo to establish a strong foothold in these essential aspects of a man's wardrobe. Tailored clothing has always been an integral part of the Ralph Lauren DNA and is the perfect complement to Polo's leadership in sportswear.
We are also in the early stages of executing our plan to open Polo stores worldwide. We believe these stores will be a wonderful counterpart to our valued North America and European wholesale distribution. Polo stores will likely become the brand's primary distribution platform in certain international markets such as Asia and parts of Latin America where the wholesale channel is less developed. Between those operated by us and those operated by local partners around the world, we have 13 Polo stores today with approximately 15 to 20 planned for fiscal 2015. We are testing a variety of store formats as we refine our approach to market before accelerating growth.
Over the long term, we believe there is an opportunity to have between 102 100 Polo stores worldwide and with also concentration in international markets. Our second initiative is the global e commerce development. In fiscal 2014, we achieved $500,000,000 in revenues through our directly operated e commerce sites. That milestone was achieved as a result of sustained investment in the business, including distribution centers, customer service centers and building out our international operations. Based on the high growth and the profit creative dynamics of the channel, we intend to continue investing in this space.
In fiscal 2015, we will begin a 3 year project to upgrade our e commerce operations by transitioning to a new global operating platform. This is a proactive investment to advance our ability to continue to deliver best in class online and mobile customer experiences as well as leverage omnichannel opportunities more effectively. The global nature of the platform will provide a singular way for us to manage our customer touch points and experiences across regions and channels ensuring a consistent brand experience worldwide. With the additional capabilities of a more sophisticated platform and an expectation of continued double digit growth for the channel, we've set our sights on achieving $1,000,000,000 in annual e commerce revenues. The 3rd initiative is accessories in general and leather goods in particular.
I'd like to provide some on the excellent progress we've made with our leather goods offerings, which include handbags, footwear, belts and small leather goods. Beginning with footwear, which we converted from a licensed to owned model in 2,006, we've now spent 2 years reimagining our offerings and building the appropriate leadership, design talent and sourcing capabilities to elevate the quality and support our distribution and growth aspirations. We relaunched footwear in 2,008 and have made tremendous progress since then establishing ourselves as an important player in the category. 2,008 was also the year we assumed direct control of our handbag and small leather goods licenses. We've grown the leather goods category at a 20% compound annual rate.
As you know, we've made a big commitment to the Ricky Bag as our most iconic silhouette. The customer response to the quality and versatility of the product and to our advertising and marketing efforts has been extraordinary and the momentum continues to build. In total, handbags, footwear and small leather goods represented a high single digit percentage of our consolidated sales in fiscal 2014. We expect leather goods to grow faster than the overall company for the next several years, supported by expanded offerings and increased distribution. Our initial goal is for leather goods to represent 20% of our consolidated revenues, a target that should also have favorable margin implications.
The 3 initiatives I've just highlighted make it clear that we have a lot to achieve. With this in mind, we spent a considerable time developing and implementing the optimal leadership and organizational structure over this last year, one that we believe positions the company for continued growth and success. As you know, we recently appointed a President of Ralph Lauren Luxury Collections with global responsibility for the strategy, merchandising, distribution and overall expansion of apparel and accessories for our men's and women's collection brands. We've also made other important structural changes to our broader senior management group. These changes have moved some of our high performing talent into roles with more global oversight.
This leverages their experience and subject matter expertise allows us to more easily and confidently apply successes in one channel or region to another and evolves the more regional orientation we had in the past. We've consolidated oversight of the Americas under one leader, which is consistent with how we manage our operations in Europe and Asia. This new structure should enable us to better execute an omnichannel approach more effectively leveraging our robust planning, allocation and merchandising expertise. We also combined our sourcing and and manufacturing operations with our distribution and logistics team, creating a fully integrated end to end supply chain organization. These changes are aligned with the progress we've made in other areas of the company, such as the creation of the global merchandising team we've spoken about before and the more global oversight that Chris has instituted in finance and IT.
We believe that this streamlining of responsibilities allows us to be more nimble and responsive as an organization and to operate with a higher degree of global consistency. This new structure will enable us to make faster decisions, drive greater operational efficiencies and build a more effective go to market process. The changes have all been well received by the organization and we are settling nicely into the new structure with Ralph, Chris and I spending the appropriate time to ensure that everyone is transitioning smoothly into their new roles. I'm sure most of you have seen that Roger Farrow will retire from Ralph Lauren at the end of May. We are enormously grateful for the leadership and dedication Roger has provided over the last 14 years.
In partnership with Ralph, he has guided the company through a period of tremendous growth in sales and profits. In doing so, he's built an impressive team and his characteristic balance of prudence and creativity is a legacy that is ingrained in our culture and certainly in everyone he has mentored over the years. Roger, you are like none other and we wish you and your family all the best. The strength of the Ralph Lauren brand and the positive customer response to our expanding range of product offerings puts us in the best possible position to achieve our growth objectives. Before I turn the call over to Chris, on behalf of the Office of the Chairman, I'd like to thank our global team for their contributions to our record fiscal 20 14 results.
As Ralph said in this morning's press release, their creativity, passion and diligence is incredibly invigorating and they are a critical ingredient in our ability to deliver sustainable profit enhancing growth over the long term.
Thank you, Jackie, and good morning, everyone. As you've seen in this morning's press release, we're reporting strong 4th quarter sales and profit results today. Let me start with a brief recap of the quarter. Consolidated net revenues rose 14% to $1,900,000,000 reflecting robust wholesale segment growth and strong retail segment expansion. Revenue was up double digits in each of our geographic regions during the quarter.
The revenue results were better than the expectations we articulated in February due to stronger wholesale revenue as we gained market share in North America and returned to robust growth in Europe. For the full year, net revenues grew 7% to $7,400,000,000 and were up 9% excluding the impact of discontinued businesses and foreign exchange. Gross profit margin of 56.2 percent was 310 basis points below the prior year period. The decline in gross profit margin is primarily attributable to the mix impacts from the integration of the CHAPS men's sportswear operations, the mix impact from stronger wholesale revenue growth and negative foreign currency effects in the quarter. Operating expenses rose 4% to $825,000,000 but the operating expense rate of 44.2 percent was 400 basis points below the prior year.
We delivered substantial cost leverage on strong sales growth, which was achieved despite continued investments in the company's long term strategic growth initiatives and infrastructure. Operating income rose an impressive 24% to $225,000,000 in the 4th quarter, which was achieved on top of a 33% increase in the prior year period. Operating margin improved 90 basis points to 12%, which was at the high end of the outlook we provided in February. Operating income of $1,100,000,000 for the full year fiscal 2014 period was modestly above the prior year. Operating margin declined 100 basis points to 15.2 percent due to unfavorable foreign exchange and the mix impact from integrating the CHOPS men sportswear operations.
Net income for the Q4 was $153,000,000 20 percent greater than the prior year period and net income per diluted share increased 23% to $1.68 The significant increases in net income and net income per diluted share were achieved on top of strong double digit increases in the prior year. Higher operating income growth drove the strong growth in net income and net income per share. The effective tax rate of 30% compared to 25% in the Q4 of fiscal 2013, primarily due to a favorable discrete tax item in the prior year period. For fiscal 2014, net income rose 3% to $776,000,000 and net income per diluted share increased 5% to $8.43 Before I move on to segment level highlights, I want to discuss some changes we've made in our segment reporting. As Jackie mentioned, we've reshaped our organization structure to better support our long term strategic growth objectives.
Specifically, we've expanded the scope and reach of our centralized global shared service organization. We believe this change will increase productivity by enabling faster and more consistent execution against the company's key growth strategies. It also provides an opportunity for us to leverage our scale in a more cost effective manner going forward. As a result, we've organized key functions such as design, merchandising, advertising, supply chain, finance and IT to operate on a global basis. And certain of those costs that used to be allocated to our wholesale, retail and licensing segments are now reflected in the unallocated corporate expense bucket.
While this changes the financial information of our segments, as you see in this morning's press release, the change has no impact on the company's consolidated financial statements. Moving on to segment highlights for the quarter. Wholesale revenues of $983,000,000 were an impressive 24% greater than the prior year period, driven by double digit in for most merchandise categories in the Americas, including strong growth in accessories, the contribution from CHAPS Men's sportswear operations and double digit growth in Europe. Wholesale operating income grew 25 percent to $296,000,000 in the 4th quarter on top of double digit growth in the prior year period. And wholesale operating margin increased 40 basis points to 30.1 percent.
The improvement in wholesale operating margin was due to stronger profitability for core operations, which more than offset the mix impacts from the integration of Chaps Men's sportswear and net negative foreign exchange effects. 4th quarter retail segment sales rose 5% to $845,000,000 driven by growth in international operations and global store expansion, including newly transitioned operations in Australia and New Zealand. Excluding the impacts of discontinued businesses and foreign exchange, retail sales rose 7%. Our North America retail operations were negatively affected by the cold and late start to spring and the Easter shift from March to April, which caused traffic to decline during the quarter. Double digit growth in our European and Asian retail sales was strong enough to overcome the pressure in North America.
Retail segment operating income was $51,000,000 in the 4th quarter and the retail operating margin was 6.1%, 400 basis points below the prior year. The lower retail operating income margin reflects costs associated with the company's global store and e commerce development efforts and negative foreign exchange impacts. Retail operating margin was also affected by increased promotional activity in the U. S. Where the promotional tenor of marketplace intensified in the post holiday period due to the unseasonable weather conditions.
We anticipated a more intense promotional landscape when we provided our Q4 outlook in February and our results actualized better than we expected at that point in time. Licensing revenues of $39,000,000 in the 4th quarter were 10% below the prior year as mid single digit growth in licensing revenues for Ralph Lauren products was more than offset by lower revenues as a result of the CHAPS and Australia and New Zealand license take backs. Operating income for the Licensing segment was $35,000,000 in line with the prior year period. Consolidated inventory was 1,000,000,000 at the end of the fiscal year, reflecting incremental inventory associated with newly transitioned CHAPS and Australia, New Zealand operations and investments to support anticipated sales growth for existing operations and new store openings. We spent approximately $390,000,000 on capital expenditures to support new retail stores, shop installations and infrastructure investments during the year.
The company repurchased 3,200,000 shares of its common stock during fiscal 2014 at a cost of $548,000,000 and returned an additional $149,000,000 to shareholders via dividend repayments. In total, the company returned approximately $700,000,000 to shareholders during the year. At the end of the Q4, the company had $580,000,000 available under previously authorized share repurchase programs for future buybacks and we ended the year with approximately $1,300,000,000 in cash and investments. We are pleased with the strong Q4 and full year results, particularly with the accelerated top line trends. Disciplined planning and day to day execution enabled us to overcome meaningful foreign exchange and environmental headwinds and deliver higher profits even as we've continued to make substantial investments in our global retail development and product innovation and in our infrastructure to support our long term growth objectives.
Now I'd like to turn to fiscal 2015. As we articulated to you in February, we expect to maintain strong revenue growth this year. We are increasing our investments in the business to support that momentum and longer term shareholder value creation. The key areas of focus in fiscal 2015 include global retail development, infrastructure investments and increased advertising and marketing. With respect to retail store development, we plan to open approximately 40 to 45 new stores in fiscal 2015, a pace we'll likely maintain over the next several years.
As a result, we'll incur a substantial increase in preopening costs, particularly since our plans include a handful of large high profile stores that are scheduled to open in the next 2 years. Among the new store investments is a dual gender Ralph Lauren flagship store in Hong Kong, as well as flagship stores for the Polo brand in New York and London. This confluence of flagship store activity is important to elevate the brand equity and image, but puts near term pressure on our retail segment as stores of that scale have significantly greater pre opening costs and a lower profit contribution earlier in their development cycle. With respect to infrastructure, the largest area of investment continues to be SAP implementation. In fiscal 2015, we will be completing the transition of our North America wholesale operations from legacy systems to SAP and we will begin the implementation process in Europe.
Based on the current scope of the SAP initiative, fiscal 2015 will likely represent the peak level of investment for us. While we anticipate substantial SAP costs in fiscal 2016 2017, we currently expect them to be below 20 fifteen's level. Over time, we believe SAP will enable productivity improvements and procurement savings in addition to providing the company with a robust global platform for future growth. We also intend to begin a 3 year project to upgrade our global e commerce operating platform. We've been operating on our existing platform for over a decade.
While it continues to serve us well, we are proactively investing in capabilities that we believe will support accelerated revenue growth through increased productivity and improved conversion rates. Consumers are clearly choosing to shop more online and our objective with the new platform is to create world class shopping experiences that place us on the leading edge of the industry. To do this, we're moving to a more flexible platform, one that can better service a growing range of devices and enable more omnichannel capabilities, as well as more sophisticated CRM activities that should drive stronger engagement, retention and repeat purchases. This initiative requires a mix of capital and operating expense that will likely intensify as the project progresses. We've also planned a substantial increase in advertising and marketing.
There are 3 main areas of investment, each of which is aligned with our core growth objectives. The first is incremental funds for our Polo brand, largely to support the launch of women's Polo, the opening of the Polo flagship store in New York City and additional Polo stores around the world. The second main area is to improve our brand awareness in Greater China. Have made excellent progress since opening the Princess Building store last year and we intend to build on that with stepped up outreach and messaging, including activities surrounding the Ralph Lauren flagship store opening in Lea Gardens. Final area of investment is for our luxury products, both to support the strong trends we are experiencing and to showcase our accessories offerings.
All told, our planned investment activities represent about 200 basis points of operating margin pressure for 2015 compared to 2014, with global retail development accounting for about half of that investment. We continue to expect these investments to deliver a rate of return that is well in excess of our cost of capital and they are meant to support shareholder value creation over the long term. With that as backdrop, I'd like to review our initial outlook for the year, which was outlined in this morning's press release. For the full year fiscal 2015 period, we expect consolidated revenues to increase by 6% to 8%, led by Retail segment growth. Revenue growth is expected to be primarily organic as there is no material contribution from license take backs this year and we expect foreign exchange impacts to be relatively neutral.
We expect our full year fiscal 2015 operating margin to be approximately 75 basis points below fiscal 2014 level due to accelerated investment in our strategic growth initiatives and infrastructure. Excluding the impacts of the incremental investment in the company's strategic growth initiatives, underlying operating income growth would be up low double digits for the year. Our fiscal 2015 tax rate is expected to be 30%. The higher level of investment that's flowing through the P and L is also reflected in our capital spending plans. We are planning approximately $400,000,000 to $500,000,000 in capital expenditures in fiscal 2015 to support our global direct to consumer and infrastructure investments as well as wholesale shop development for the women's polo launch.
For the Q1 of 2015, we expect consolidated net revenues to increase by 3% to 5%, led by retail segment growth as wholesale segment sales are expected to be essentially in line with the prior year period. Our operating margin for the Q1 is expected to be approximately 300 basis points to 3.50 basis points below the prior year period, primarily due to higher operating expenses related to the timing of investments to support the company's strategic growth objectives. In addition, we will not be anniversarying the one time gain on the Chaps acquisition that we had in the prior year period, which accounts for about 100 basis points of this decline. The Q1 tax rate is estimated at 30%. Our opportunities for growth are tremendous and our strategies are clear.
We are focused on executing with excellence and are committed to being prudent stewards of capital and global brand development. The investments we are making in our long term growth initiatives along with our new management structure are intended to maximize our sales and profit growth over the long term. At this point, we'd like to open up the call for your questions. Operator, can you assist us with that?
The first question comes from Omar Saad with ISI Group. Your line is open.
Thanks. Good morning and thanks for all the color heading into 2015. It's really helpful. I wanted to ask you a question to maybe get you to elaborate a little bit on some of the realignments in the organizational shifts that are going on and the shared services, especially in the context of the recent announcement around Valerie becoming the President of the Luxury Ralph Lauren Brands. Are you going to do something similar maybe with the Polo brand as it's growing?
And how it kind of all fits together? And what some of the benefits you think are of some of these realignments around the org structure? Thanks.
What we've done is we've really looked at our overall structure and what our plan was to consolidate our viewpoint of all three regions. So Europe and Asia had already had a consolidated approach between our retail business and our wholesale business. We decided that there was value in doing that in the Americas. And looking at the overall business in the region between North America and now South America is in that world and to be able to really strategize our viewpoint in an omnichannel way. So to really look across our wholesale businesses, our retail businesses and make the best decisions as to how we should move forward in the region rather than with a more siloed approach that we had operated under.
So the leadership of that is under Joy Hertfeld, who'd spent 25 years in our company and ran our Polo and Children's businesses and has obviously run our biggest and most profitable businesses within the company. Reporting to Joy is Kim Roy, who is Head of our U. S. Wholesale Business, also a veteran of Ralph Lauren and has been with the company for 11 years, has done an outstanding job in building the world of Lauren and Chaps, and great visibility over during that time for the to strengthen the balance of our wholesale division and Kim is often running in her new role. We also promoted and expanded Don Bounds' role who was Head of all of Manufacturing and sourcing.
We really saw great benefit in combining manufacturing sourcing with supply chain. And Don now has full oversight of that end to end seamless execution from beginning to the end of process from distribution out to our stores and our customers. And we believe that there will be great benefit over time in the seamless end view of that organization. We've also had very strong success strong success in our merchandising organization by taking a global view in our product and our presentation worldwide. And led by David Rosenberg, we started with the consolidation in our men's merchandising world and now we are expanding that based on its success addressing SKU count and a more cohesive presentation around the world to the balance of our businesses and that's moving along quite well.
Valerie in her new role focused on our luxury opportunity. As you know Valerie to us with tremendous experience, spent her career in that sector and we believe that there is great opportunity in building our both our apparel and of course, our accessory business under her leadership. In addition, we brought in Denise Encandela, who is now heading came from Saks Fifth Avenue, is now heading our online business. And we are very excited about having Denise on board and the understanding of this space both as a merchant and as a marketer. As you know she had the CMO role as well at Saks and think that there are many opportunities that we have not yet taken advantage of that Denise has really brought to the table.
So as we are looking at our entire organization and we're looking at the strength of that leadership and the past 7 months that we've all been operating under this structure, we've already seen some very, very positive results. And our Polo brand is really built centrally designed, merchandised, marketed and then distributed in the regions each taking that as a key centerpiece for what we believe the opportunities are going forward both in Polo stores, Polo product expansion with women's and clothing for men's and of course with the exciting entry into the market of our new store on Fifth Avenue, which is expected to open at around Labor Day and then of course the new Ralph Lauren restaurant that will follow that opening. So that kind of summarizes our leadership changes.
The other thing I would say Omar to your question is that as we're really a lot of these moves are meant to globalize the company. And it starts with an underpinning from a system standpoint, which is what the SAP project is about, which is what the e commerce replatforming project is about. A lot of the management moves that we're doing are taking multiple organizations that we had acquired over the years through license take backs that operated in silos and combining organizations so that instead of doing the same job 3 times or 4 times, we do it once. And over time, what we believe and what we're already starting to see opportunity for is we think that's going to lead to significant opportunity for cost leverage, which should result in SG and A leverage over time as we get into the new structure and as we begin to we're we're early days into sort of this globalization. And I think a lot of these themes are going to play out more fully when we get into fiscal 2016 than in fiscal 2015.
Next question please.
Thank you. The next question comes from Michael Binetti with UBS.
Good morning guys. I guess two quick questions here. One is as I think about the factory outlets in the U. S, I think those have been struggling with traffic for a lot of the last year. And those are obviously very big percent of the U.
S. Retail comps. Can you tell us a little bit more about your thinking in that channel based on what you're seeing now? And if you think sales there turned back to positive in fiscal 2015? And then Chris you also talked about obviously gave us a lot of good color on a number of initiatives that are baked into the SG and A guidance for this year with a lot of projects that have varying durations.
And as we look at the longer term comments that you're making and think about our models, which tend to focus on the longer term for the Ralph Lauren Company in particular, how you guys are thinking about maybe some of the payback period analysis that you did or whether the EBIT margins can start to expand as soon as fiscal 2016? Thanks.
Okay. Well, I'll start with the factory channel. So in the Q4, we saw actually very good growth in the factory channel in Europe and Asia. The U. S.
Factory business was down in the Q4 and that was because we saw traffic and again our Q4 is Jan through March. And the traffic trend that we experienced in the Q4 was down double digits in traffic in that period, which had a significant impact in the company's comps. The encouraging part of that is that in the Q1, to date, the 1st part of April May, we're already seeing the traffic trends reaccelerate in the U. S. To the factory outlet channel.
So we're seeing not the same trend that we saw in January, March that in the U. S. Market. From a longer term perspective on some of the margin trends going forward, I think you're right that some of the things have different payback periods. So I would characterize, if you wanted to parse it into 2 broad areas, the infrastructure investments that we're making, whether it be SAP or the e commerce platform, are we're likely to be in investment mode for on an aggregate of those two things for a couple of years because the e commerce replatforming is a 2 or 3 year project where you're investing before you turn on the new platform.
On the flip side, the Polo investments that we're making whether it be women's Polo or the flagship stores, the start the rollout of new stores, we should start seeing and be able to report a much stronger progress on that as we get toward the end of this fiscal year because we'll have experience in the market when women's polo launches in the fall and we'll begin to get some initial reads from the stores that we're opening. So it's too soon for us to say how all of that nets together from a fiscal 2016 and beyond perspective externally because we typically provide guidance 1 year out, but that's a little bit of how we expect the underlying trends to play out.
Next question?
Thank you. The next question comes from David Glick with Buckingham Research.
Thank you. Just continuing on that trend, I mean is I think the concern that we're hearing from investors is that the operating margin has been down, this is called 100 basis points a year, FY 'fourteen and then kind of taking the midpoint in FY 'fifteen. I mean you've given us a lot of qualitative. I mean is it reasonable to assume that you could see at least some margin stabilization in FY 'sixteen assuming that the Polo initiative and the new store openings open as you planned them? And then second for Jackie, just when will we start to see the Polo women's merchandise in stores?
And I'm curious what to make of the American Living appearance at Macy's whether that's a significant opportunity for you guys? Yes. So I
guess on the operating margin, let me start with fiscal 2014 just to make sure we're clear. So in fiscal 2014, the primary driver of the operating margin being down in fiscal 2014 versus the year ago was foreign exchange. So if you took out the impact of foreign exchange on our profitability, our earnings per share would be up double digits in fiscal 2014. In fiscal 2015, I think we've provided perspective around the impacts of the investments, which together account for 200 basis points of the operating margin pressure, which the midpoint of our guidance range is down 100. So if you looked at the operating margin excluding those investments, the operating margin would be up 100 basis points in fiscal 2015.
As I mentioned on fiscal 2016, there's going to be varying impacts of these investments because they have different payback periods. And we'll provide more color on that in our normal guidance pattern as we go forward.
On Polar Women's, David, we'll start to ship Polar Women's in mid to end August and will the first impact will be in our retail stores in over the Labor Day weekend and in our wholesale customers approximately the same time. We're building beautiful shops as a backdrop for the Polo women's brand. We have a lot of confidence in that opportunity and feel that so I said, if we can get a relation to what we're doing in Polo Men's and which we're fairly confident about that we can really grow that business and we're really excited about our fall shipments for that brand. As it relates to American Living, as you know, we had it exclusively at JCPenney up until the time that they had their change in management. And for many reasons, we decided to withdraw the brand from JCPenney.
Penney. Interestingly, we had built it into quite a big successful volume brand for J. C. Penney and felt that it had a great future and kind of put it on the sidelines until we could determine what the next opportunity might be. We had a great conversation with Macy's and we decided that we would utilize the American Living brand in conjunction with their American Icon marketing strategy, which incorporates Memorial Day into July 4, into Labor Day.
And so we shipped the brand for the beginning of April. And it has been a very exciting launch so far. And we're very, very pleased with the results. We have another concept package going in for holiday. And then I believe we'll determine how we build the brand and opportunity from there.
And that's as I said, it's very early days at this point, but nice results.
Next question please.
Thank you. The next question comes from Kate McShane with Citi Research.
Thanks. Good morning. Were there any sales pulled into Q4 from Q1 and that's why we're seeing a deceleration in the Q1 top line guidance for Q1 fiscal year 2015? And is there a change in guidance that you're conveying today on the top line? I had noted that you're guiding high single digits for fiscal year 2015 and now at 6% to 8% it seems a little bit lower than that.
So I was hoping you can reconcile that for us. Thanks.
Sure. So on the first question, I would say, yes, there was a little bit of a shift in timing of the wholesale business. March April are in a lot of cases viewed somewhat together. And so a lot we do have a set of shipments that go out March 25. Some of those shipments went out a little bit early at the request of our customers, but it wasn't a material impact.
One of the key drivers of that is Easter. So I think it's probably a fair comment that looking at the wholesale business on a rolling basis as opposed to a quarter to quarter basis is a more accurate is a better reflection of the trends in that business. And you see that in our guidance for the Q1 where we had very strong wholesale shipments in the January, March period. But in the April to June period, we're effectively guiding wholesale shipments about flat versus year ago. Over the 6 month period, it will be a very strong wholesale pickup.
On the top line for the total company, yes, we expect high single digits. I think 6% to 8% is consistent with that in my view. So there's no there's really no change in our thinking there going forward.
Next question? Thank you. The next question comes from Lindsey Drucker Mann with Goldman Sachs. Thanks. Good morning, everyone.
Just to follow-up on that question, it sounds as if even if we were to adjust for some of the shipment timing that your U. S. Wholesale business is still running up very strong, high single, maybe low double digit type of growth. Is that first of all, am I right in thinking about it that way? And second of all, do you contemplate that sort of growth rate continuing as we move into the back part of the year?
And for your sales guidance of the 6% to 8% for the full year, how much incremental sales from these new initiatives are contemplated in that guidance?
So yes, I would say that the U. S. Wholesale business continues to operate very strongly. If you look at the sell out of the business in our customers, we continue to gain share consistently in that channel. I think the other encouraging thing in our wholesale segment results is as we talked about at the last call, we had made a strategic pullback in shipments primarily in Southern Europe on the specialty store channel.
We've now annualized that and so we're starting to see a return to strong wholesale growth in the European business as well. And so we had a double digit increase in wholesale in the quarter in Europe as well. So I think the trends in our wholesale business broadly are very encouraging and I think we expect them to continue. On the new initiatives, I think that it's the 6 percent to 8% revenue growth is effectively organic growth in our view. There's no acquisitions in that.
There's no foreign exchange in that. I think the women's polo impact during the year is going to be somewhat muted because we're launching in fall, so we'll have a part year impact and we're replacing the blue label business. And so during the transition, I think we see opportunity, but I think we see even stronger opportunity as we begin to get into fiscal 2016 as we really get behind the women's Polo line and as we open more freestanding Polo stores.
Next question?
Thank you. The next question comes from Liz Dunn with Macquarie. Hi. Thanks for taking my question. If Roger is listening, best of luck.
It's been an absolute pleasure. And Jackie and Chris, thank you so much for all the detail, particularly quantifying some of the things like e commerce and the amount of pressure that you're expecting next year on the operating margin. In terms of that 6% to 8%, I don't mean to keep hitting the same point, but does that imply that as we go forward perhaps beyond fiscal 2015 that the 6% to 8% will accelerate or could potentially accelerate as some of these growth initiatives begin to really kick in? And then relative to the accessories business, are you Jackie do you think that the progress that we've seen so far has been slower than you anticipated? Or is it just one of these businesses that takes time to build and now you're finally seeing some signs that that growth is beginning to accelerate?
Thanks.
I'll address the long term revenue growth. So on the long term revenue growth, I think our view is that we'd like to try to target high single digit growth sort of on a continuous basis. But in any given year, I think we want to be prepared for mid single digit growth. And a lot of it's going to depend on the macroeconomic environment, the timing of initiatives, the timing of store openings. But I think our goal, you will, is to try to be a consistent high single digit type of grower.
On the accessory front, Liz, I think that we're pleased with our introduction beginning in accessories in 2,008 as that was not a core competence of the company and we have made it one since in 2 critical areas, one being the luxury accessory business. And I think that over this last year, we've seen some great traction with the Ricky and continue to fuel that opportunity. We've also had some great success with our Lauren accessory business and we're seeing very nice growth in that brand as well. So I would say that in our whole leather goods category, we've accomplished a 20% compound annual rate growth. So look we always hope for more, but we are pleased with where we are and we think we finally have put in the right foundations to continue to build from.
Next question?
Thank you. The next question comes from Erinn Murphy with Piper Jaffray. Great. Thank you. Good morning.
I was just hoping you could follow-up on the strength that you saw in Europe in the Q4. Could you elaborate a little bit more about country specific or regional trends that you're seeing? And then with the pace of wholesale growth there, should we assume that you're also seeing that type of double digit growth in the fall order book? Thank you.
Yes. So I guess if I were to step back and talk about Europe for the year, we've pretty consistently grown our retail segment revenues in Europe double digits every quarter for the past year. But we saw wholesale really start to accelerate a little bit in the Q3 and then get to double digits in the Q4. And that's what allowed us to translate into double digit growth in Europe in the quarter with both retail and wholesale at that pace. I think we're at a place where we expect that to continue in terms of revenue growth going forward in a strong way.
If you look at the trends within the region, I think we're seeing the U. K. Is probably the strongest part of our business. The GDP has improved there markedly. I think we're seeing Southern Europe stabilize.
So it's no longer going down. It's not necessarily going up, but it's stabilizing. And I think we're seeing some strength in the Scandinavia region, in Germany and some stability in France. The other encouraging trend that I would point to in Europe is that as we've invested in resetting the brand image in Greater China, particularly with the opening of the men's Princess flagship store and a number of the other luxury stores, we're starting to see the Chinese tourist business in Europe increase at a significant rate off of a low base, but we're up very, very strong double digits in terms of our business to Chinese tourists in Europe, which is helping to fuel the growth of that business right now. And we think as we open the Lee Gardens flagship store and increase the marketing and advertising spending behind Greater China where we have a low awareness, we think that's going to translate through both in Europe and in the U.
S. Business.
Operator, we're ready for our last question.
Thank you. The final question comes from Joan Pason with Barclays.
Hi, good morning and thank you for taking my question. I just wanted to ask another question on Europe actually and the Polo full price opportunity in particular. Given your store network over there, how many retail stores do you think the region could support overall? And you also mentioned the 100 to 200 store number for Polo Full Price being a little more weighted towards Asia and Latin America. But what how do you really think about the allocation in terms of the regional perspective with those?
I think we see a big opportunity for full price stores in Europe. We're in the middle of prioritizing locations around the world and we're doing it on a global basis. I think we think there's both an opportunity in Western Europe and we think there's an opportunity in Central and Eastern Europe and the Middle East for Polo stores. If you think about the allocation of that 100 to 200, I would expect that maybe we could have 20% to 30% of those stores in Europe over time.
We're excited also about our London opening on Regent Street for Polo, which we believe will set the tone for Polo in Europe.
All right. Well, thank you for joining us this morning. I think we're pleased with the Q4 results that we've reported today. I think and we're looking forward to coming out and talking more about it and following up with you. And please feel free to call Jim or myself with any additional questions.
Thank you very much.
Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and you may now disconnect.