Gap Inc. (NYSE: GPS) today announced that the company no longer
intends to separate Old Navy into a standalone public company.
“The plan to separate was rooted in our commitment to value
creation from our portfolio of iconic brands,” said Robert Fisher,
Gap Inc. interim president and chief executive officer. “While the
objectives of the separation remain relevant, our board of
directors has concluded that the cost and complexity of splitting
into two companies, combined with softer business performance,
limited our ability to create appropriate value from
separation.”
“The work we’ve done to prepare for the spin shone a bright
light on operational inefficiencies and areas for improvement,”
continued Fisher. “We have learned a lot and intend to operate Gap
Inc. in a more rigorous and transformational manner that empowers
our growth brands, Old Navy and Athleta, and appropriately focuses
on profitability for Banana Republic and Gap brand. Our board is
focused on supporting this work and appointing new leadership with
the appropriate experience necessary to lead a portfolio of retail
brands and to support our transformation efforts.”
Leadership Update
The company’s board of directors intends to appoint a new CEO to
oversee the full portfolio of brands and corporate strategy. As
previously communicated, in the interim, four of the company’s
senior leaders have been elevated and have taken on additional
responsibilities reporting to Mr. Fisher. Mark Breitbard, president
and CEO, Banana Republic, will now lead Gap Inc.’s collection of
specialty brands, including Gap, Banana Republic, Athleta, Janie
and Jack, Intermix and Hill City; Sonia Syngal, president and CEO,
Old Navy, will continue to lead the Old Navy business; Teri
List-Stoll, executive vice president and chief financial officer,
will lead corporate operations related to finance, supply chain,
technology and real estate; and Julie Gruber, executive vice
president, global general counsel, corporate secretary and chief
compliance officer, will lead corporate administrative functions
including legal, corporate facilities and services, human resources
and communications, loss prevention, sustainability, government
affairs and foundation.
Additionally, the company today announced that Neil Fiske,
president and CEO of Gap brand, will leave the company.
Fiscal Year 2019 Outlook
The company now expects total company fiscal 2019 comparable
sales and net sales to both be at the higher end of its previous
guidance range of down mid-single digits and down low-single
digits, respectively. As a result of better than anticipated
promotional levels over the holiday period, particularly at Old
Navy, the company now expects its adjusted fiscal year 2019
earnings per share to be moderately above its previous guidance of
$1.70 - $1.75.
“We are working aggressively to stabilize and improve business
results,” said Teri List-Stoll, executive vice president and chief
financial officer, Gap Inc. “We are committed to sharpened
strategic focus, tailored operating strategies and operational
discipline and accountability that can strengthen the health and
profitability of our brands.”
Fourth Quarter and Fiscal 2019 Earnings
Gap Inc. will release its fourth quarter and fiscal 2019
earnings results via press release on February 27, 2020 at 1:15
p.m. Pacific Time. In addition, the company will host a summary of
Gap Inc.’s fourth quarter and fiscal 2019 results during a live
conference call and webcast on February 27, 2020 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: 7436665). International callers may dial 1-323-794-2078.
The webcast can be accessed at www.gapinc.com.
Forward-Looking Statements
This press release contains 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,” and similar
expressions also identify forward-looking statements.
Forward-looking statements include, without limitation, statements
regarding comparable sales, net sales and earnings per share for
fiscal year 2019.
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 its
financial information; the risks associated with the termination of
our plan to separate into two independent publicly-traded
companies; 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 attract and retain key personnel, or effectively manage
succession; the risk that the company’s investments in customer,
digital, and 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 that a failure of, or updates or changes to, the
company’s information technology systems may disrupt its
operations; 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 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 of foreign currency exchange rate
fluctuations; 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 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 of natural disasters, public
health crises, political crises, negative global climate patterns,
or other catastrophic events; the risk of reductions in income and
cash flow from the company’s credit card arrangement related to its
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, and claims.
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 February 2, 2019, as well as
the company’s subsequent filings with the Securities and Exchange
Commission.
These forward-looking statements are based on information as of
January 16, 2020. 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 Old Navy, Gap, Banana Republic, Athleta,
Intermix, Janie and Jack, and Hill City brands. Fiscal year 2018
net sales were $16.6 billion. Gap Inc. products are available for
purchase in more than 90 countries worldwide through
company-operated stores, franchise stores, and e-commerce sites.
For more information, please visit www.gapinc.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200116005795/en/
Investor Relations: Tina Romani (415) 427-5264
Investor_relations@gap.com
Media Relations: Sarah Meron (347) 891-1770
Press@gap.com
Gap (NYSE:GPS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gap (NYSE:GPS)
Historical Stock Chart
From Apr 2023 to Apr 2024