Gap Inc. (NYSE: GPS) today reported that net sales for the
four-week period ended January 28, 2017 increased 2 percent to $828
million compared with net sales of $813 million for the four-week
period ended January 30, 2016. For the fourth quarter of fiscal
year 2016, Gap Inc.’s net sales increased 1 percent to $4.43
billion compared with $4.39 billion for the fourth quarter last
year.
“Against a challenging retail backdrop, we’re pleased to report
growth in our top-line and comp sales during the critical holiday
quarter,” said Art Peck, chief executive officer, Gap Inc. “We
remain focused on actions that will strengthen our brands and
recapture market share.”
January Comparable Sales Results
Gap Inc.’s comparable sales for January 2017 were up 1 percent
compared with a decline of 8 percent last year. Comparable sales by
global brand for January 2017 were as follows:
- Old Navy Global: positive 2
percent versus negative 6 percent last year
- Gap Global: positive 3 percent
versus negative 6 percent last year
- Banana Republic Global: negative
4 percent versus negative 17 percent last year
Fourth Quarter Comparable Sales Results
Gap Inc.’s comparable sales for the fourth quarter of fiscal
year 2016 were up 2 percent compared with a decline of 7 percent
last year. Comparable sales by global brand for the fourth quarter
were as follows:
- Old Navy Global: positive 5
percent versus negative 8 percent last year
- Gap Global: flat versus negative
3 percent last year
- Banana Republic Global: negative
3 percent versus negative 14 percent last year
Full-Year and Fourth Quarter Guidance
For fiscal year 2016, the company now expects its reported
diluted earnings per share to be in the range of $1.68 to $1.69. On
an adjusted basis, Gap Inc. now expects its full-year 2016 adjusted
earnings per share to be in the range of $2.01 to $2.02, excluding
the following impacts:
- Costs associated with the company’s
previously announced store closure and streamlining initiatives of
about $0.41, which includes the impact from a higher tax rate;
- A non-cash goodwill impairment charge
of about $0.18 related to Intermix;
- A gain of about $0.11 from insurance
proceeds related to a fire which occurred in a building on the
company’s Fishkill distribution center campus;
- A non-recurring tax benefit of about
$0.15.
Please see the reconciliation of adjusted diluted earnings per
share, a non-GAAP financial measure, in the table at the end of
this press release.
The company noted that its expected fiscal year 2016 adjusted
earnings per share range includes a fourth quarter benefit of about
$0.03 from a lower effective tax rate versus last year’s rate,
primarily due to changes in the company’s geographical mix of
earnings. As a result, Gap Inc. now expects a full-year reported
effective tax rate of about 40 percent, or about 39 percent
excluding restructuring costs and other one-time items.
For the fourth quarter of fiscal year 2016, the company expects
its reported diluted earnings per share to be in the range of $0.54
to $0.55, or about $0.50 to $0.51 on an adjusted basis. Please see
the reconciliation of adjusted diluted earnings per share, a
non-GAAP financial measure, in the table at the end of this press
release.
Additional insight into Gap Inc.’s sales performance is
available by calling 1-800-GAP-NEWS (1-800-427-6397). International
callers may call 706-902-4949. The recording will be available at
approximately 1:15 p.m. Pacific Time on February 6, 2017 and
available for replay until 1:15 p.m. Pacific Time on February 10,
2017.
Fourth Quarter Earnings
Gap Inc. will release its fourth quarter earnings results via
press release on February 23, 2017 at 1:15 p.m. Pacific Time. In
addition, the company will host a summary of Gap Inc.’s fourth
quarter results during a live conference call and webcast on
February 23, 2017 from approximately 2:00 p.m. to 3:00 p.m. Pacific
Time. The conference call can be accessed by calling 1-855-5000-GPS
or 1-855-500-0477 (participant passcode: 3648818). International
callers may dial 913-643-0954. The webcast can be accessed
at www.gapinc.com.
Forward-Looking Statements
This press release and related sales recording contain
forward-looking statements within the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. All
statements other than those that are purely historical are
forward-looking statements. Words such as "expect," "anticipate,"
"believe," "estimate," "intend," "plan," "project," and similar
expressions also identify forward-looking statements.
Forward-looking statements include statements regarding:
- earnings per share for the fourth
quarter of fiscal year 2016 and fiscal year 2016; and
- the effective tax rate for fiscal year
2016.
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause the
company's actual results to differ materially from those in the
forward-looking statements. These factors include, without
limitation, the following:
- the risk that additional information
may arise during the company’s close process or as a result of
subsequent events that would require the company to make
adjustments to its financial expectations.
Additional information regarding factors that could cause
results to differ can be found in the company’s Annual Report on
Form 10-K for the fiscal year ended January 30, 2016, as well as
the company’s subsequent filings with the Securities and Exchange
Commission.
These forward-looking statements are based on information as of
February 6, 2017. The company assumes no obligation to publicly
update or revise its forward-looking statements even if experience
or future changes make it clear that any projected results
expressed or implied therein will not be realized.
About Gap Inc.
Gap Inc. is a leading global retailer offering clothing,
accessories, and personal care products for men, women, and
children under the Gap, Banana Republic, Old Navy, Athleta, and
Intermix brands. Fiscal year 2016 net sales were $15.5 billion. Gap
Inc. products are available for purchase in more than 90 countries
worldwide through about 3,300 company-operated stores, about 450
franchise stores, and e-commerce sites. For more information,
please visit www.gapinc.com.
The Gap, Inc. NON-GAAP FINANCIAL MEASURES
UNAUDITED ADJUSTED DILUTED
EARNINGS PER SHARE RANGE Adjusted diluted earnings per
share is a non-GAAP financial measure. Expected adjusted diluted
earnings per share for the fourth quarter and full year of fiscal
year 2016 is provided to enhance visibility into the company's
expected underlying results for the period excluding the impact of
one-time charges including estimated restructuring costs, estimated
goodwill impairment charge, estimated gain from insurance proceeds,
and the estimated tax impact of a legal structure realignment.
Management believes the adjusted metrics are useful for the
assessment of ongoing operations as we believe the adjusted items
are not indicative of our ongoing operations due to the one-time
nature of the charges, and management believes that the
presentation of adjusted financial information provides additional
information to investors to facilitate the comparison of results
against prior years. Additionally, management uses adjusted
earnings per share as a key performance measure for the purposes of
evaluating performance internally. However, this non-GAAP financial
measure is not intended to supersede or replace the GAAP measure.
13 Weeks EndedJanuary 28,
2017
52 Weeks EndedJanuary 28,
2017
Low End High End Low End High
End Expected earnings per share - diluted $ 0.54 $ 0.55 $ 1.68
$ 1.69 Add: Estimated restructuring costs (a) 0.04 0.04 0.41 0.41
Add: Estimated goodwill impairment (b) 0.18 0.18 0.18 0.18 Less:
Estimated insurance gain (c) (0.11 ) (0.11 ) (0.11 ) (0.11 ) Less:
Estimated tax impact of a legal structure realignment (d)
(0.15 ) (0.15 ) (0.15 ) (0.15 ) Adjusted
expected earnings per share - diluted $ 0.50 $ 0.51 $
2.01 $ 2.02 ____________________ (a)
Represents the estimated earnings per share impact of restructuring
costs related to store closures, streamlining the company's
operations and certain incremental tax expenses. (b)
Represents the estimated goodwill impairment charge related to
Intermix, which is not deductible for tax purposes. (c)
Represents the estimated gain from insurance proceeds, net of tax,
related to the fire that occurred in one of the buildings at a
Company-owned distribution center campus in Fishkill, New York.
(d) Represents the estimated favorable income tax impact of
a legal structure realignment.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170206006039/en/
Gap Inc.Investor Relations Contact:Tina Romani,
415-427-5264Investor_relations@gap.comorMedia Relations
Contact:Jennifer Poppers, 415-427-1729Press@gap.com
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