The FINANCIAL — Gap Inc. on February 6 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.
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, according to Gap.
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.