Company Guides to Third Quarter Earnings per
Share Range
Gap Inc. (NYSE: GPS) today reported that net sales for the
four-week period ended October 29, 2016 were $1.20 billion, or flat
when compared with the four-week period ended October 31, 2015. For
the third quarter of fiscal year 2016, Gap Inc.’s net sales were
$3.80 billion compared with $3.86 billion for the third quarter of
last year.
“As we close out the quarter, we are pleased to see a continued
positive customer response to our Old Navy product collections,”
said Sabrina Simmons, chief financial officer, Gap Inc.
October Comparable Sales Results
Gap Inc.’s comparable sales for October 2016 were down 1 percent
versus a 3 percent decrease last year. The company estimated that
the fire, which occurred in a building on its Fishkill, New York
distribution center campus, negatively impacted Gap Inc.’s October
2016 comparable sales by approximately 3 percentage points.
Comparable sales by global brand for October 2016 were as
follows:
- Gap Global: negative 7 percent,
including an estimated negative impact from the Fishkill
distribution center fire of approximately 5 percentage points,
versus negative 4 percent last year
- Banana Republic Global: negative
4 percent, including an estimated negative impact from the Fishkill
distribution center fire of approximately 4 percentage points,
versus negative 15 percent last year
- Old Navy Global: positive 3
percent, including an estimated negative impact from the Fishkill
distribution center fire of approximately 1 percentage point,
versus positive 2 percent last year
The company noted that October merchandise margin rates
actualized significantly higher than previously expected, which
more than offset the estimated earnings impact from lost sales and
increased logistics costs during the month that resulted from the
Fishkill distribution center fire.
Third Quarter Comparable Sales Results
Gap Inc.’s comparable sales for the third quarter of fiscal year
2016 were down 3 percent, including an estimated negative impact
from the Fishkill distribution center fire of approximately 2
percentage points, versus a 2 percent decrease last year.
Comparable sales by global brand for the third quarter of fiscal
year 2016 were as follows:
- Gap Global: negative 8 percent,
including an estimated negative impact from the Fishkill
distribution center fire of approximately 4 percentage points,
versus negative 4 percent last year
- Banana Republic Global: negative
8 percent, including an estimated negative impact from the Fishkill
distribution center fire of approximately 2 percentage points,
versus negative 12 percent last year
- Old Navy Global: positive 3
percent, including an estimated negative impact from the Fishkill
distribution center fire of approximately 1 percentage point,
versus positive 4 percent last year
Third Quarter Guidance
On a reported basis, the company expects its diluted earnings
per share for the third quarter of fiscal year 2016 to be in the
range of $0.50 to $0.51.
Excluding the $0.09 negative impact associated with its
previously announced store closure and streamlining measures, which
includes the impact from a higher tax rate, the company expects its
adjusted diluted earnings per share to be in the range of $0.59 to
$0.60 for the third quarter of fiscal year 2016. Please see the
reconciliation of adjusted diluted earnings per share, a non-GAAP
financial measure, from the 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 November 7, 2016 and
available for replay until 1:15 p.m. Pacific Time on November 11,
2016.
Third Quarter Earnings
Gap Inc. will release its third quarter earnings results via
press release on November 17, 2016 at 1:15 p.m. Pacific Time. In
addition, the company will host a summary of Gap Inc.’s third
quarter results during a live conference call and webcast on
November 17, 2016 from approximately 1:30 p.m. to 2:15 p.m. Pacific
Time. The conference call can be accessed by calling 1-855-5000-GPS
or 1-855-500-0477 (participant passcode: 5419872). International
callers may dial 913-643-0954. The webcast can be accessed
at www.gapinc.com.
November Sales
The company will report November sales at 1:15 p.m. Pacific Time
on December 1, 2016.
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 third
quarter of 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; and
- the risk that comparable sales and
margins will experience fluctuations.
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
November 7, 2016. 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 2015 net sales were $15.8 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 EXPECTED ADJUSTED EARNINGS
PER SHARE FOR THE THIRD QUARTER OF FISCAL YEAR 2016
Expected adjusted diluted earnings per share is a non-GAAP
financial measure. Expected adjusted diluted earnings per share for
the third quarter of fiscal year 2016 is provided to enhance
visibility into the company's expected underlying results for the
period excluding the impact of restructuring costs. However, this
non-GAAP financial measure is not intended to supersede or replace
the GAAP measure.
13 Weeks Ended
October 29, 2016
Low End High End Expected earnings per share -
diluted $ 0.50 $ 0.51 Add: Estimated restructuring costs (a) ~0.09
~0.09 Expected adjusted earnings per share - diluted $ 0.59 $ 0.60
____________________ (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.
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version on businesswire.com: http://www.businesswire.com/news/home/20161107006377/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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