Gap Inc. (NYSE: GPS) today reported that net sales for the
four-week period ended August 1, 2015 were $1.12 billion compared
with net sales of $1.17 billion for the four-week period ended
August 2, 2014. For the second quarter of fiscal year 2015, Gap
Inc.’s net sales decreased 2 percent to $3.90 billion compared with
$3.98 billion for the second quarter last year.
On a constant currency basis, net sales for the second quarter
of fiscal year 2015 were about flat versus last year.1 The company
noted that the translation of foreign currencies into U.S. dollars
negatively impacted the company’s reported net sales for the second
quarter of fiscal year 2015 by about $100 million, primarily due to
the weakening Japanese yen and Canadian dollar.
“We’re pleased that Old Navy delivered another consecutive
quarter of growth, while we continued to make progress against
previously announced strategic actions at Gap brand,” said Sabrina
Simmons, chief financial officer, Gap Inc.
July Comparable Sales Results
Gap Inc. comparable sales for July 2015 were down 3 percent
versus a 2 percent increase last year. Comparable sales by global
brand for July 2015 were as follows:
- Gap Global: negative 7 percent
versus negative 2 percent last year
- Banana Republic Global: negative
10 percent versus positive 6 percent last year
- Old Navy Global: positive 3
percent versus positive 3 percent last year
The company noted that tax-free holidays in several states
shifted from July last year to August this year. In addition, the
company noted that this year’s Labor Day holiday is one week later,
as compared to last year.
Second Quarter Comparable Sales Results
Gap Inc. comparable sales for the second quarter of fiscal year
2015 were down 2 percent versus flat last year. Comparable sales by
global brand for the second quarter of fiscal year 2015 were as
follows:
- Gap Global: negative 6 percent
versus negative 5 percent last year
- Banana Republic Global: negative
4 percent versus flat last year
- Old Navy Global: positive 3
percent versus positive 4 percent last year
1 In calculating the net sales change on a constant currency
basis, current year foreign exchange rates are applied to both
current year and prior year net sales. This is done to enhance the
visibility of underlying sales trends, excluding the impact of
foreign currency exchange rate fluctuations.
Second Quarter Guidance
The company noted that its second quarter fiscal year 2015
earnings per share range includes impacts associated with foreign
currency fluctuations, West Coast port delays, and previously
announced strategic actions primarily related to Gap brand.
Excluding the negative impact from the strategic actions, which
was about $0.12, the company expects its adjusted diluted earnings
per share to be in the range of $0.63 to $0.64 for the second
quarter of fiscal year 2015.
On a reported basis, the company expects diluted earnings per
share for the second quarter of fiscal year 2015 to be in the range
of $0.51 to $0.52. 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 1:00 p.m. Pacific Time on August 10, 2015 and
available for replay until 1:00 p.m. Pacific Time on August 14,
2015.
Second Quarter Earnings
Gap Inc. will release its second quarter earnings results via
press release on August 20, 2015 at 1:00 p.m. Pacific Time. In
addition, the company will host a summary of Gap Inc.’s second
quarter results during a live conference call and webcast on August
20, 2015 from approximately 2:00 p.m. to 2:45 p.m. Pacific Time.
The conference call can be accessed by calling 1-855-5000-GPS or
1-855-500-0477 (participant passcode: 7779269). International
callers may dial 913-643-0954. The webcast can be accessed
at www.gapinc.com.
August Sales
The company will report August sales on September 3, 2015.
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 second
quarter of fiscal year 2015.
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 31, 2015, 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 10, 2015. 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 2014 net sales were $16.4 billion. Gap
Inc. products are available for purchase in more than 90 countries
worldwide through about 3,300 company-operated stores, over 400
franchise stores, and e-commerce sites. For more information,
please visit www.gapinc.com.
The Gap, Inc.NON-GAAP FINANCIAL
MEASURESUNAUDITED
ADJUSTED EXPECTED EARNINGS PER SHARE RANGE
Adjusted expected diluted earnings per share is a non-GAAP
financial measure. This guidance is provided to enhance visibility
into the company's expected results for the second quarter of
fiscal year 2015 excluding impact from its strategic actions
primarily related to Gap brand.
13 Weeks Ended August 1, 2015 Low End
High End Expected earnings per share - diluted $ 0.51
$ 0.52 Add: Impact from strategic actions 0.12 0.12
Adjusted expected earnings per share - diluted $ 0.63 $ 0.64
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version on businesswire.com: http://www.businesswire.com/news/home/20150810006098/en/
Gap Inc.Investor Relations Contact:Jack Calandra,
415-427-1726Investor_relations@gap.comMedia Relations
Contact:Kari Shellhorn, 415-427-1805Press@gap.com
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