- Increases Reported EPS Guidance to a
Range of $2.12 to $2.20 for Fiscal Year 2017
- Increases Adjusted EPS Guidance to a
Range of $2.02 to $2.10, Excluding Second Quarter Gain on Insurance
Proceeds of 10 cents per share, Compared to Previous Guidance of
$1.95 to $2.05
- Positive 1 Percent Comparable Sales
Growth, Representing Third Consecutive Quarter of Positive
Comparable Sales Growth
- Fourth Consecutive Quarter of Gross
Margin Expansion
- Distributed Approximately $380 Million
to Shareholders Through Share Repurchases and Dividends
Year-to-Date
Gap Inc. (NYSE: GPS) today reported results for the second
quarter of fiscal year 2017. On a reported basis, Gap Inc.’s second
quarter fiscal year 2017 diluted earnings per share were $0.68. On
an adjusted basis, the company’s second quarter fiscal year 2017
diluted earnings per share were $0.58, excluding a $0.10 benefit
from insurance proceeds related to the fire that occurred on the
company’s Fishkill distribution center campus in fiscal year 2016
(the “Fishkill fire”). 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.
“With a third consecutive quarter of comp sales growth, we are
seeing our investments in product, customer experience, and brand
equity begin to pay off,” said Art Peck, president and chief
executive officer, Gap Inc. “Based on the strength of the first
half, we are pleased to increase our full year earnings
guidance.”
Peck continued, “As we continue to focus on long-term growth, we
are accelerating our strategies that put the customer at the center
of everything we do – including a focus on product categories where
we have clear differentiation, continued investment in our online
and mobile offerings, and taking advantage of our operating scale
to drive speed to market, responsiveness to customer demands and
efficiency.”
Second Quarter 2017 Comparable Sales Results
Gap Inc.’s comparable sales for the second quarter of fiscal
year 2017 were up 1 percent versus a 2 percent decrease last year.
Comparable sales by global brand for the second quarter were as
follows:
- Old Navy Global: positive 5
percent versus flat last year
- Gap Global: negative 1 percent
versus negative 3 percent last year
- Banana Republic Global: negative
5 percent versus negative 9 percent last year
Net Sales Results
Net sales for the second quarter of fiscal year 2017 were $3.80
billion compared with $3.85 billion for the second quarter of
fiscal year 2016. The translation of foreign currencies into U.S.
dollars negatively impacted the company’s net sales for the second
quarter of fiscal year 2017 by about $37 million.1 Second quarter
net sales details appear in the tables at the end of this press
release.
Additional Second Quarter of Fiscal Year 2017 Results and
2017 Outlook
Earnings per Share
The company updated its reported diluted earnings per share
guidance for fiscal year 2017 to be in the range of $2.12 to $2.20.
Excluding the benefit from insurance proceeds related to the
Fishkill fire of about $0.10, the company expects its adjusted
diluted earnings per share to be in the range of $2.02 to $2.10.
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.
The company noted that foreign currency fluctuations negatively
impacted earnings per share for the second quarter of fiscal year
2017 by an estimated $0.02, or about 3 percentage points of
earnings per share growth.2
Comparable and Net Sales
The company continues to expect comparable sales for fiscal year
2017 to be flat to up slightly.
Net sales for fiscal year 2017 are expected to be slightly below
this range driven by an expected negative impact from foreign
currency fluctuations year-over-year as well as the impact from
international closures in fiscal year 2016.
Operating Expenses
Second quarter fiscal year 2017 operating expenses were $1.03
billion compared with $1.16 billion last year. Excluding the $64
million gain from insurance proceeds related to the Fishkill fire
recorded in the second quarter of fiscal year 2017 and
restructuring costs of $135 million recorded in the second quarter
of fiscal year 2016, second quarter fiscal year 2017 operating
expenses were up about $70 million when compared with last year on
an adjusted basis. The company noted the increase in adjusted
operating expenses was primarily driven by an increase in payroll,
largely due to bonus, as well as investments in digital and
customer initiatives that support the company’s long term growth.
Please see the reconciliation of adjusted operating expenses, a
non-GAAP financial measure, in the tables at the end of this press
release.
Operating Margin
The company’s operating margin for the second quarter of fiscal
year 2017 was 11.9 percent compared with 7.2 percent last year.
The company’s adjusted operating margin for the second quarter
of fiscal year 2017 was 10.2 percent compared with adjusted
operating margin of 11.1 percent last year. Please see the
reconciliation of adjusted operating margin, a non-GAAP financial
measure, in the tables at the end of this press release.
Effective Tax Rate
The effective tax rate was 38.3 percent for the second quarter
of fiscal year 2017.
The company continues to expect its fiscal year 2017 effective
tax rate to be about 39 percent.
Inventory
At the end of the second quarter of fiscal year 2017, total
inventory was up 5 percent.
The company noted about half of the increase is due to the
timing of in-transit inventory and the remaining increase is due to
mixing into key loyalty categories that have higher costs but also
typically deliver higher merchandise margins.
Cash and Cash Equivalents
The company ended the second quarter of fiscal year 2017 with
$1.6 billion in cash and cash equivalents. Year-to-date free cash
flow, defined as net cash provided by operating activities less
purchases of property and equipment, net of insurance proceeds
related to loss of property and equipment, was $270 million,
reflecting the timing of lease payments and a larger increase in
inventory from the beginning of the fiscal year to the end of the
quarter when compared to the same period in fiscal year 2016.
Please see the reconciliation of free cash flow, a non-GAAP
financial measure, from the GAAP financial measure in the tables at
the end of this press release.
Cash Distribution
During the quarter, Gap Inc. repurchased 4.5 million shares for
about $100 million and ended the second quarter of fiscal year 2017
with 392 million shares outstanding.
The company expects to spend about $100 million on share
repurchases in the third quarter of fiscal year 2017.
The company paid a dividend of $0.23 per share during the second
quarter of fiscal year 2017. In addition, on August 10, 2017, the
company announced that its board of directors authorized a third
quarter dividend of $0.23 per share.
Capital Expenditures
Fiscal year-to-date 2017 capital expenditures were $275 million.
The company continues to expect capital spending to be
approximately $625 million for fiscal year 2017, excluding an
estimated $200 million associated with the rebuilding of the
company’s Fishkill, New York distribution center campus and related
supply chain spend. The company noted the majority of these costs
are expected to be covered by insurance proceeds. Please see the
reconciliation of adjusted capital expenditures, a non-GAAP
financial measure, in the tables at the end of this press
release.
Real Estate
The company ended the second quarter of fiscal year 2017 with
3,642 store locations in 47 countries, of which 3,179 were
company-operated.
The company continues to expect store count to be about flat at
the end of fiscal year 2017 compared with fiscal year 2016.
1 The translation impact on net sales is calculated by applying
foreign exchange rates applicable for the second quarter of fiscal
year 2017 to net sales for the second quarter of fiscal year 2016.
This is done to enhance the visibility of underlying sales trends,
excluding the impact of foreign currency exchange rate
fluctuations.
2 In estimating the earnings per share impact from foreign
currency exchange rate fluctuations, the company estimates current
gross margins using the appropriate prior year rates (including the
impact of merchandise-related hedges), translates current period
foreign earnings at prior year rates, and excludes the
year-over-year earnings impact of balance sheet remeasurement and
gains or losses from non-merchandise-related foreign currency
hedges. This is done in order to enhance the visibility of business
results excluding the direct impact of foreign currency exchange
rate fluctuations.
Webcast and Conference Call Information
Jennifer Fall, senior vice president of Corporate Finance and
Investor Relations at Gap Inc., will host a summary of the
company’s second quarter fiscal year 2017 results during a
conference call and webcast from approximately 2:00 p.m. to 3:00
p.m. Pacific Time today. Ms. Fall will be joined by Art Peck, Gap
Inc. president and chief executive officer, and Teri List-Stoll,
Gap Inc. executive vice president and chief financial officer.
The conference call can be accessed by calling 1-855-5000-GPS or
1-855-500-0477 (participant passcode: 6432748). International
callers may dial 1-323-794-2078. The webcast can be accessed at
www.gapinc.com.
Forward-Looking Statements
This press release and related conference call and webcast
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 the
following: earnings per share, comparable sales and net sales for
fiscal year 2017; foreign exchange impact in fiscal year 2017;
effective tax rate for fiscal year 2017; share repurchases in the
third quarter of fiscal year 2017;capital expenditures for fiscal
year 2017; costs related to rebuilding the Fishkill distribution
center; insurance recovery for costs related to the fire at our
Fishkill distribution center; new stores and store count at the end
of fiscal year 2017; SG&A for the third quarter of fiscal year
2017; and online growth in fiscal year 2017.
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 risks, any of which could have an adverse
effect on the Company’s financial condition, results of operations,
and reputation: 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 the
unaudited financial information; the risk that the company or its
franchisees will be unsuccessful in gauging apparel trends and
changing consumer preferences; the highly competitive nature of the
company’s business in the United States and internationally; the
risk of failure to maintain, enhance and protect the company’s
brand image; the risk of failure to attract and retain key
personnel, or effectively manage succession; the risk that trade
matters could increase the cost or reduce the supply of apparel
available to the company; the risk of changes in the regulatory or
administrative landscape; the risk that the company’s investments
in omni-channel shopping initiatives may not deliver the results
the company anticipates; the risk if the company is unable to
manage its inventory effectively; the risk that the company is
subject to data or other security breaches that may result in
increased costs, violations of law, significant legal and financial
exposure, and a loss of confidence in the company’s security
measures; the risk of foreign currency exchange rate fluctuations;
the risks to the company’s business, including its costs and supply
chain, associated with global sourcing and manufacturing; the risk
of changes in global economic conditions or consumer spending
patterns; the risks to the company’s efforts to expand
internationally, including its ability to operate under a global
brand structure and operating in regions where it has less
experience; the risks to the company’s reputation or operations
associated with importing merchandise from foreign countries,
including failure of the company’s vendors to adhere to its Code of
Vendor Conduct; the risk that the company’s franchisees’ operation
of franchise stores is not directly within the company’s control
and could impair the value of its brands; the risk that the company
or its franchisees will be unsuccessful in identifying,
negotiating, and securing new store locations and renewing,
modifying, or terminating leases for existing store locations
effectively; the risk that comparable sales and margins will
experience fluctuations; the risk that changes in the company’s
credit profile or deterioration in market conditions may limit the
company’s access to the capital markets; the risk that updates or
changes to the company’s information technology systems may disrupt
its operations; the risk of natural disasters, public health
crises, political crises, or other catastrophic events; the risk of
reductions in income and cash flow from our marketing and servicing
arrangement related to our private label and co-branded credit
cards; the risk that the adoption of new accounting pronouncements
will impact future results; the risk that the company does not
repurchase some or all of the shares it anticipates purchasing
pursuant to its repurchase program; and the risk that the company
will not be successful in defending various proceedings, lawsuits,
disputes, claims, and audits.
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 28, 2017, as well as
the company’s subsequent filings with the Securities and Exchange
Commission.
These forward-looking statements are based on information as of
August 17, 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,
Intermix, and Weddington Way brands. Fiscal year 2016 net sales
were $15.5 billion. Gap Inc. products are available for purchase in
more than 90 countries worldwide through about 3,200
company-operated stores, about 450 franchise stores, and e-commerce
sites. For more information, please visit www.gapinc.com.
The Gap, Inc. CONDENSED CONSOLIDATED BALANCE
SHEETS UNAUDITED
July 29, July 30,
($ in millions)
2017 2016 ASSETS Current assets: Cash and cash
equivalents $ 1,609 $ 1,681 Merchandise inventory 2,051 1,951 Other
current assets 598 669 Total current assets 4,258
4,301 Property and equipment, net 2,643 2,755 Other long-term
assets 716 681 Total assets $ 7,617 $ 7,737
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current
maturities of debt $ - $ 424 Accounts payable 1,230 1,224 Accrued
expenses and other current liabilities 1,062 1,063 Income taxes
payable 107 70 Total current liabilities 2,399
2,781 Long-term liabilities: Long-term debt 1,248 1,321
Lease incentives and other long-term liabilities 1,025
1,076 Total long-term liabilities 2,273 2,397
Total stockholders' equity 2,945 2,559 Total
liabilities and stockholders' equity $ 7,617 $ 7,737
The Gap, Inc. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME UNAUDITED 13
Weeks Ended 26 Weeks Ended July 29, July
30, July 29, July 30, ($ and shares in
millions except per share amounts) 2017 2016
2017 2016 Net sales $ 3,799 $ 3,851 $ 7,239 $ 7,289
Cost of goods sold and occupancy expenses 2,320 2,414
4,457 4,643 Gross profit 1,479 1,437 2,782 2,646
Operating expenses 1,028 1,158 2,077
2,145 Operating income 451 279 705 501 Interest, net 12
16 28 34 Income before income taxes 439 263
677 467 Income taxes 168 138 263 215
Net income $ 271 $ 125 $ 414 $ 252 Weighted-average number
of shares - basic 395 398 397 398 Weighted-average number of shares
- diluted 396 399 398 399 Earnings per share - basic $ 0.69
$ 0.31 $ 1.04 $ 0.63 Earnings per share - diluted $ 0.68 $ 0.31 $
1.04 $ 0.63
The Gap, Inc. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
26 Weeks Ended July 29,
July 30, ($ in millions) 2017 2016 Cash
flows from operating activities: Net income $ 414 $ 252
Depreciation and amortization (a) 249 272 Change in merchandise
inventory (203 ) (52 ) Other, net 26 262
Net cash provided by operating activities 486
734 Cash flows from investing activities:
Purchases of property and equipment (275 ) (270 ) Insurance
proceeds related to loss on property and equipment 59 - Other
(3 ) (1 ) Net cash used for investing activities
(219 ) (271 ) Cash flows from financing
activities: Payments of current maturities of debt (67 ) - Proceeds
from issuances under share-based compensation plans 14 16
Withholding tax payments related to vesting of stock units (14 )
(17 ) Repurchases of common stock (200 ) - Excess tax benefit from
exercise of stock options and vesting of stock units - 1 Cash
dividends paid (182 ) (183 ) Other - 23
Net cash used for financing activities (449 ) (160 )
Effect of foreign exchange rate fluctuations on cash and
cash equivalents 8 8 Net increase
(decrease) in cash and cash equivalents (174 ) 311 Cash and cash
equivalents at beginning of period 1,783 1,370
Cash and cash equivalents at end of period $ 1,609 $
1,681 (a) Depreciation and amortization
is net of amortization of lease incentives.
The Gap, Inc. NON-GAAP FINANCIAL MEASURES
UNAUDITED FREE CASH FLOW Free cash flow
is a non-GAAP financial measure. We believe free cash flow is an
important metric because it represents a measure of how much cash a
company has available for discretionary and non-discretionary items
after the deduction of capital expenditures, net of insurance
proceeds related to loss on property and equipment, as we require
regular capital expenditures to build and maintain stores and
purchase new equipment to improve our business. We use this metric
internally, as we believe our sustained ability to generate free
cash flow is an important driver of value creation. However, this
non-GAAP financial measure is not intended to supersede or replace
our GAAP results.
26 Weeks Ended July 29,
July 30, ($ in millions) 2017 2016 Net
cash provided by operating activities $ 486 $ 734 Less: Purchases
of property and equipment (275 ) (270 ) Add: Insurance proceeds
related to loss on property and equipment (a) 59
- Free cash flow $ 270 $ 464
____________________ (a) Represents insurance proceeds
related to loss on property and equipment from the fire that
occurred on the company-owned distribution center campus in
Fishkill, New York on August 29, 2016.
The Gap,
Inc. NON-GAAP FINANCIAL MEASURES UNAUDITED
ADJUSTED INCOME STATEMENT METRICS The following
adjusted income statement metrics are non-GAAP financial measures.
These measures are provided to enhance visibility into the
company's underlying results for the period excluding the impact of
the gain from insurance proceeds in the second quarter of fiscal
year 2017 and restructuring activities in the second quarter of
fiscal year 2016. 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 nature of the adjustments, and management believes that the
presentation of adjusted financial information provides additional
information to investors to facilitate the comparison of results
against prior years. However, these non-GAAP financial measures are
not intended to supersede or replace the GAAP measures.
($ in millions)
Operating
Operating
Operating
Expenses as a % of
Operating
Income as a % of
13 Weeks Ended July 29, 2017 Gross Profit Gross
Margin Expenses
Net Sales (c)
Income
Net Sales (c)
GAAP metrics, as reported $ 1,479 38.9 % $ 1,028 27.1 % $ 451 11.9
% Adjustments for gain from insurance proceeds (a) -
- 64 1.7 % (64 ) (1.7 )% Non-GAAP
metrics $ 1,479 38.9 % $ 1,092 28.7 % $ 387
10.2 %
($ in millions)
Operating
Operating
Operating
Expenses as a % of
Operating
Income as a % of
13 Weeks Ended July 30, 2016 Gross Profit Gross
Margin Expenses
Net Sales (c)
Income
Net Sales (c)
GAAP metrics, as reported $ 1,437 37.3 % $ 1,158 30.1 % $ 279 7.2 %
Adjustments for impact of fiscal year 2016 restructuring costs (b)
15 0.4 % (135 ) (3.5 )% 150 3.9
% Non-GAAP metrics $ 1,452 37.7 % $ 1,023 26.6 % $
429 11.1 %
______________________________ (a) Represents the gain from
insurance proceeds related to the fire that occurred in one of the
buildings at a company-owned distribution center campus in
Fishkill, New York and impact on percentage of net sales.
(b) Represents the restructuring costs related to fiscal year 2016
store closures and streamlining the company's operations incurred
in the second quarter of fiscal year 2016 and impact on percentage
of net sales. The costs primarily include lease termination fees,
store asset impairments, and employee-related costs. (c)
Operating expenses and operating income as a percentage of net
sales was computed individually for each line item; therefore, the
sum of the percentages may not equal the total.
The Gap, Inc. NON-GAAP FINANCIAL MEASURES
UNAUDITED ADJUSTED NET INCOME FOR THE SECOND
QUARTER OF FISCAL YEARS 2017 AND 2016 Adjusted net
income is a non-GAAP financial measure. Adjusted net income is
provided to enhance visibility into the company's underlying
results for the periods excluding the impact of the gain from
insurance proceeds in the second quarter of fiscal year 2017 and
restructuring activities in the second quarter of fiscal year 2016.
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 nature of
the adjustments, 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 net income 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 Ended ($ in millions) July 29, 2017 July
30, 2016 Net income, as reported $ 271 $ 125 Add: Fiscal year
2016 restructuring costs (a) - 150 Less: Tax benefit related to
fiscal year 2016 restructuring costs (b) - (63 ) Add: Incremental
tax expense related to fiscal year 2016 restructuring costs (c) -
26 Less: Gain from insurance proceeds (d) (64 ) - Add: Tax expense
related to gain from insurance proceeds (e) 24
- Adjusted net income $ 231 $ 238
____________________ (a) Represents the restructuring
costs incurred related to fiscal year 2016 store closures and
streamlining the company's operations, and primarily include lease
termination fees, store asset impairments, and employee-related
costs. $135 million was recorded in operating expenses and $15
million was recorded in cost of goods sold and occupancy expenses
during the second quarter of fiscal year 2016. (b) The
amount of tax benefit associated with the fiscal year 2016
restructuring costs is calculated using the adjusted effective tax
rate. (c) Represents the incremental tax expense related to
fiscal year 2016 restructuring costs. (d) Represents the
gain from insurance proceeds related to the fire that occurred in
one of the buildings at a company-owned distribution center campus
in Fishkill, New York. (e) Represents the tax impact of the
gain from insurance proceeds, calculated at the reported effective
tax rate, related to the fire that occurred in one of the buildings
at a company-owned distribution center campus in Fishkill, New
York.
The Gap, Inc. NON-GAAP
FINANCIAL MEASURES UNAUDITED ADJUSTED EARNINGS
PER SHARE FOR THE SECOND QUARTER OF FISCAL YEARS 2017 AND 2016
Adjusted diluted earnings per share is a non-GAAP financial
measure. Adjusted diluted earnings per share is provided to enhance
visibility into the company's expected underlying results for the
period excluding the impact of the gain from insurance proceeds in
the second quarter of fiscal year 2017 and restructuring activities
in the second quarter of fiscal year 2016. 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 nature of the adjustments, 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 Ended July 29, 2017 July 30, 2016 Earnings
per share - diluted, as reported $ 0.68 $ 0.31 Add: Impact of
fiscal year 2016 restructuring costs (a) - 0.22 Add: Impact of
incremental tax expenses related to fiscal year 2016 restructuring
costs (b) - 0.07 Less: Impact of gain from insurance proceeds (c)
(0.10 ) - Diluted earnings per share adjusted for
certain items $ 0.58 $ 0.60 Add: Estimated impact from
foreign exchange (d) 0.02 Diluted earnings per share
adjusted for certain items and foreign exchange $ 0.60
Earnings per share decline adjusted for certain items (3 )%
Foreign exchange impact on adjusted earnings per share growth
3 % Earnings per share growth adjusted for certain items and
foreign exchange 0 % ____________________ (a)
Represents the earnings per share impact of restructuring costs
incurred related to fiscal year 2016 store closures and
streamlining the company's operations, calculated net of tax at the
adjusted effective tax rate. The costs primarily include lease
termination fees, store asset impairments, and employee-related
costs. (b) Represents the earnings per share impact of
incremental tax expenses related to fiscal year 2016 restructuring
costs. (c) Represents the gain from insurance proceeds,
calculated net of tax at the reported effective tax rate, related
to the fire that occurred in one of the buildings at a
company-owned distribution center campus in Fishkill, New York.
(d) In estimating the earnings per share impact from foreign
currency exchange rate fluctuations, the company estimates current
gross margins using the appropriate prior year rates (including the
impact of merchandise-related hedges), translates current period
foreign earnings at prior year rates, and excludes the
year-over-year earnings impact of balance sheet remeasurement and
gains or losses from non-merchandise-related foreign currency
hedges.
The Gap, Inc.
NON-GAAP FINANCIAL MEASURES UNAUDITED
EXPECTED ADJUSTED EARNINGS PER SHARE FOR FISCAL YEAR 2017
Expected adjusted diluted earnings per share is a non-GAAP
financial measure. Expected adjusted diluted earnings per share for
fiscal year 2017 is provided to enhance visibility into the
company's expected underlying results for the period excluding the
impact of the gain from insurance proceeds. However, this non-GAAP
financial measure is not intended to supersede or replace the GAAP
measure.
53 Weeks Ending February 3, 2018
Low End
High End
Expected earnings per share - diluted $ 2.12 $ 2.20 Less: Estimated
impact of gain from insurance proceeds (a) (0.10 )
(0.10 ) Expected adjusted earnings per share - diluted $ 2.02
$ 2.10 ____________________ (a)
Represents the estimated gain from insurance proceeds, calculated
net of tax at the effective tax rate, related to the fire that
occurred in one of the buildings at a company-owned distribution
center campus in Fishkill, New York.
The Gap,
Inc. NON-GAAP FINANCIAL MEASURES UNAUDITED
EXPECTED ADJUSTED CAPITAL EXPENDITURES Expected
adjusted capital expenditures is a non-GAAP financial measure.
Expected adjusted capital expenditures for fiscal year 2017
excludes estimated costs associated with rebuilding our Fishkill
distribution center and related supply chain spend, the majority of
which is expected to be covered by insurance proceeds. However,
this non-GAAP financial measure is not intended to supersede or
replace the GAAP measure.
53 Weeks Ending ($ in
millions) February 3, 2018 Expected capital expenditures
$ 825 Less: Estimated costs associated with rebuilding our Fishkill
distribution center (200 ) Expected adjusted capital
expenditures $ 625
The Gap, Inc. NET SALES RESULTS
UNAUDITED The following table details the company’s
second quarter fiscal year 2017 net sales:
($ in millions)
Old Navy
Banana
Percentage of 13 Weeks Ended July 29, 2017 Gap
Global Global
Republic Global
Other (2) Total Net Sales U.S. (1) $ 719 $
1,596 $ 492 $ 231 $ 3,038 80 % Canada 91 133 54 - 278 7 % Europe
148 - 3 - 151 4 % Asia 252 12 24 - 288 8 % Other regions 22
16 6 - 44 1 % Total $ 1,232 $ 1,757 $
579 $ 231 $ 3,799 100 %
($ in millions)
Old Navy Banana Percentage of 13 Weeks
Ended July 30, 2016 Gap Global Global Republic
Global Other (3) Total Net Sales U.S. (1)
$ 749 $ 1,500 $ 523 $ 200 $ 2,972 77 % Canada 92 129 57 - 278 7 %
Europe 159 - 17 - 176 5 % Asia 280 66 29 - 375 10 % Other regions
33 10 7 - 50 1 % Total $ 1,313 $
1,705 $ 633 $ 200 $ 3,851 100 % (1) U.S. includes the United
States, Puerto Rico, and Guam. (2) Includes Athleta, Intermix, and
Weddington Way. (3) Includes Athleta and Intermix.
The Gap, Inc. REAL ESTATE
Store count, openings, closings, and square footage for our
stores are as follows:
13 Weeks Ended July 29, 2017
Store Locations Store Locations Store
Locations Store Locations Square Feet
Beginning of Q2 Opened Closed End of Q2
(millions) Gap North America 835 3 4 834 8.6 Gap Asia 307 1
3 305 2.9 Gap Europe 163 - 4 159 1.4 Old Navy North America 1,047 8
4 1,051 17.5 Old Navy Asia 13 - - 13 0.2 Banana Republic North
America 597 3 4 596 5.0 Banana Republic Asia 49 - 1 48 0.2 Athleta
North America 133 - - 133 0.6 Intermix North America 42 - 2 40 0.1
Company-operated stores total 3,186 15 22 3,179 36.5 Franchise 466
7 10 463 N/A Total 3,652 22 32 3,642 36.5
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170817005970/en/
Gap Inc.Investor Relations Contact:Tina Romani,
415-427-5264Investor_relations@gap.comorMedia Relations
Contact:Kari Shellhorn, 415-427-1805Press@gap.com
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