Gap
Inc. (NYSE: GPS) today reported third quarter fiscal year 2014 net
income was $351 million, or $0.80 per share on a diluted basis,
representing an 11 percent increase over last year.
“As we move into the holiday season, our teams are focused on delivering
unique customer experiences which will differentiate our portfolio of
brands in the marketplace,” said Glenn Murphy, chairman and chief
executive officer, Gap Inc.
Business Highlights
-
Less than four years after the first Gap store opened in greater
China, the brand surpassed 100 stores in the region in November and is
on track to finish fiscal year 2014 with approximately 110 Gap and Gap
Outlet stores across mainland China, Hong Kong and Taiwan.
-
Old Navy continues its plans to expand to a broader global customer
base with its announcement to open franchise-operated stores in six
Middle Eastern countries beginning in Spring 2015. Following its debut
in China earlier in the year, Old Navy announced that it expects to
expand its footprint faster than originally planned in mainland China,
reaching 7 stores in 5 cities by the end of the fiscal year.
-
Athleta continues to build on its success as a performance and
lifestyle brand, opening 14 new stores during the quarter for a total
of 92 stores, and the brand remains on track to end fiscal year 2014
with about 100 stores in the U.S. The brand is also launching Reserve
in Store today in almost all Athleta stores, making it easy for online
and mobile shoppers to reserve their favorite items and pick them up
at the local store of their choice.
-
Gap Inc. continues to reach more customers with its omni-channel
services. This month, the company extended its Order in Store
capabilities to about 1,000 U.S. Gap, Old Navy, Banana Republic and
Athleta stores, allowing customers access to expanded inventory
including broader size, color and style selections. The company also
launched free customer Wifi in more than 1,100 U.S. Gap, Gap Factory,
Banana Republic, Banana Republic Factory, Old Navy and Athleta stores,
making in-store mobile experiences easily accessible to customers.
Third Quarter Comparable Sales Results
Gap Inc.’s comparable sales for the third quarter of fiscal year 2014
were down 2 percent versus a 1 percent increase last year. Comparable
sales by global brand for the third quarter of fiscal year 2014 were as
follows:
-
Gap Global: negative 5 percent versus positive 1 percent last
year
-
Banana Republic Global: flat versus negative 1 percent last year
-
Old Navy Global: positive 1 percent versus flat last year
Third Quarter Net Sales Results
For the third quarter of fiscal year 2014, Gap Inc.’s net sales were
$3.97 billion compared with $3.98 billion for the third quarter last
year. The company noted that the translation of net sales in foreign
currencies into U.S. dollars negatively impacted reported net sales by
approximately $31 million in the third quarter of fiscal year 2014.
Net sales increased 1 percent on a constant currency basis for the third
quarter of fiscal year 2014. In calculating net sales growth on a
constant currency basis, current year foreign exchange rates are applied
to both current year and prior year net sales. This is done to enhance
the visibility of underlying business trends, excluding the impact of
foreign currency exchange rate fluctuations.
The following table details the company’s third quarter net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) Quarter Ended November 1, 2014
|
|
Gap Global
|
|
Old Navy Global
|
|
Banana Republic Global
|
|
Other (2)
|
|
Total
|
|
Percentage of Net Sales
|
U.S. (1)
|
|
$
|
907
|
|
$
|
1,390
|
|
$
|
581
|
|
$
|
152
|
|
$
|
3,030
|
|
76
|
%
|
Canada
|
|
|
105
|
|
|
129
|
|
|
63
|
|
|
1
|
|
|
298
|
|
8
|
%
|
Europe
|
|
|
198
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
220
|
|
6
|
%
|
Asia
|
|
|
296
|
|
|
39
|
|
|
33
|
|
|
—
|
|
|
368
|
|
9
|
%
|
Other regions
|
|
|
49
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
56
|
|
1
|
%
|
Total
|
|
$
|
1,555
|
|
$
|
1,558
|
|
$
|
706
|
|
$
|
153
|
|
$
|
3,972
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) Quarter Ended November 2, 2013
|
|
Gap Global
|
|
Old Navy Global
|
|
Banana Republic Global
|
|
Other (2)
|
|
Total
|
|
Percentage of Net Sales
|
U.S. (1)
|
|
$
|
960
|
|
$
|
1,371
|
|
$
|
572
|
|
$
|
155
|
|
$
|
3,058
|
|
77
|
%
|
Canada
|
|
|
111
|
|
|
126
|
|
|
60
|
|
|
1
|
|
|
298
|
|
7
|
%
|
Europe
|
|
|
199
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
220
|
|
6
|
%
|
Asia
|
|
|
282
|
|
|
20
|
|
|
37
|
|
|
—
|
|
|
339
|
|
8
|
%
|
Other regions
|
|
|
53
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
61
|
|
2
|
%
|
Total
|
|
$
|
1,605
|
|
$
|
1,517
|
|
$
|
698
|
|
$
|
156
|
|
$
|
3,976
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) U.S. includes the United States, Puerto Rico, and Guam.
|
(2) Includes Piperlime, Athleta, and Intermix.
|
|
Total online sales increased to $621 million for the third quarter of
fiscal year 2014 compared with $589 million in the third quarter last
year.
Additional Third Quarter Results and 2014 Outlook
Earnings per Share
Third quarter fiscal year 2014 diluted earnings per share were $0.80
compared with diluted earnings per share of $0.72 in the third quarter
of fiscal year 2013. As previously communicated, the company’s diluted
earnings per share for the third quarter of fiscal year 2014 includes a
non-recurring benefit of about $0.06 from a lower effective tax rate
versus the third quarter of fiscal year 2013, primarily due to the
recognition of certain foreign tax credits.
The company updated its diluted earnings per share guidance for the full
fiscal year 2014 to be in the range of $2.73 to $2.78, which includes
the gain on the asset sale of $39 million communicated in connection
with the company’s second quarter of fiscal year 2014 financial results.
Operating Expenses
During the quarter, the company continued its disciplined management of
operating expenses. Third quarter operating expenses were up $29 million
to $1.04 billion, compared with $1.01 billion in the third quarter of
last year.
Marketing expenses for the third quarter were up $14 million to $176
million, compared with last year, driven primarily by increased spending
at Gap brand.
Operating Margin
The company’s operating margin was 13.9 percent in the third quarter
versus 14.5 percent last year. The company now expects its full-year
fiscal 2014 operating margin to be about 12.5 percent compared to 13.3
percent during fiscal year 2013.
Effective Tax Rate
The effective tax rate was 34.5 percent for the third quarter of fiscal
year 2014. The company updated its expected full-year fiscal year 2014
tax rate to be about 38.0 percent, down from 38.5 percent, primarily to
reflect the previously discussed third quarter tax benefit.
Inventory
During the quarter, the company also maintained strong discipline over
inventory management. On a year-over-year basis, inventory dollars per
store were down 2 percent at the end of the third quarter of fiscal year
2014, below its prior guidance of up in the low single digits.
At the end of the fourth quarter of fiscal year 2014, the company
expects year-over-year inventory dollars per store to be down slightly
compared with the fourth quarter last year.
Cash and Cash Equivalents
The company ended the third quarter of fiscal year 2014 with $954
million 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, was an inflow of $606 million compared with an
inflow of $466 million last year. 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.
Share Repurchases
During the third quarter of fiscal year 2014, the company used $433
million to repurchase 11.4 million shares, and the company ended the
third quarter of fiscal year 2014 with 424 million shares outstanding.
As announced on October 16, 2014, the company approved a $500 million
share repurchase authorization for the company’s common stock, of which
about $450 million was still available as of the end of the third
quarter of fiscal year 2014, reinforcing the company’s commitment to
returning excess cash to shareholders.
Dividends
The company paid a dividend of $0.22 per share during the third quarter
of fiscal year 2014. In addition, on November 12, 2014, the company
announced that its Board of Directors authorized a fourth quarter
dividend of $0.22 per share.
Capital Expenditures
Fiscal year-to-date capital expenditures were $508 million.
For fiscal year 2014, the company now expects capital spending to be
approximately $700 million, down from the previous guidance of about
$750 million.
Depreciation and Amortization
The company now expects depreciation and amortization expense, net of
amortization of lease incentives, to be approximately $500 million for
fiscal year 2014, down from the previous guidance of about $520 million.
Real Estate
The company ended the third quarter of fiscal year 2014 with 3,680 store
locations in 50 countries, of which 3,266 were company-operated.
During the third quarter of fiscal year 2014, the company opened 84 and
closed 18 company-operated stores. Square footage of company-operated
stores was up 2.2 percent compared with the third quarter of fiscal year
2013.
For the full fiscal year 2014, the company continues to expect to open
about 185 company-operated stores, focused on China, Old Navy in Japan,
Athleta, and global outlet stores. In addition, for the full fiscal year
2014 the company plans to close about 70 company-operated stores, which
are weighted toward Gap North America and consistent with its previously
stated strategy. Given its focus on growing through new channels and
geographies, the company continues to expect square footage to increase
about 2.5 percent in fiscal year 2014.
Store count, openings, closings, and square footage for our stores are
as follows:
|
|
|
|
|
13 Weeks Ended November 1, 2014
|
|
|
Store Locations Beginning of Q3
|
|
Store Locations Opened
|
|
Store Locations Closed
|
|
Store Locations End of Q3
|
|
Square Feet (millions)
|
Gap North America
|
|
966
|
|
16
|
|
5
|
|
977
|
|
10.2
|
Gap Asia
|
|
235
|
|
15
|
|
1
|
|
249
|
|
2.5
|
Gap Europe
|
|
190
|
|
-
|
|
1
|
|
189
|
|
1.6
|
Old Navy North America
|
|
1,006
|
|
14
|
|
5
|
|
1,015
|
|
17.3
|
Old Navy Asia
|
|
28
|
|
8
|
|
-
|
|
36
|
|
0.5
|
Banana Republic North America
|
|
598
|
|
15
|
|
3
|
|
610
|
|
5.1
|
Banana Republic Asia
|
|
47
|
|
-
|
|
2
|
|
45
|
|
0.2
|
Banana Republic Europe
|
|
11
|
|
-
|
|
-
|
|
11
|
|
0.1
|
Athleta North America
|
|
79
|
|
14
|
|
1
|
|
92
|
|
0.4
|
Piperlime North America
|
|
1
|
|
-
|
|
-
|
|
1
|
|
-
|
Intermix North America
|
|
39
|
|
2
|
|
-
|
|
41
|
|
0.1
|
Company-operated stores total
|
|
3,200
|
|
84
|
|
18
|
|
3,266
|
|
38.0
|
Franchise
|
|
394
|
|
26
|
|
6
|
|
414
|
|
N/A
|
Total
|
|
3,594
|
|
110
|
|
24
|
|
3,680
|
|
38.0
|
|
|
|
|
|
|
|
|
|
|
|
Webcast and Conference Call Information
Katrina O'Connell, vice president of Corporate Finance and Investor
Relations at Gap Inc., will host a summary of the company’s third
quarter 2014 results during a conference call and webcast starting at
approximately 2:00 p.m. Pacific Time today. Ms. O’Connell will be joined
by Glenn Murphy, Gap Inc. chairman and chief executive officer, and
Sabrina Simmons, Gap Inc. chief financial officer.
The conference call can be accessed by calling 1-855-5000-GPS or
1-855-500-0477 (participant passcode:1609362). International callers may
dial 913-643-0954. The webcast can be accessed at www.gapinc.com.
November Sales
The company will report November sales on December 4, 2014.
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 for fiscal year 2014;
-
Gap store openings in Asia, Old Navy store openings in Asia and the
Middle East, and Athleta store openings in the United States;
-
operating margin for fiscal year 2014;
-
effective tax rate for fiscal year 2014;
-
inventory dollars per store at the end of the fourth quarter of fiscal
year 2014;
-
returning excess cash to shareholders;
-
future dividends;
-
capital expenditures for fiscal year 2014;
-
depreciation and amortization for fiscal year 2014;
-
store openings and closings, and weightings by brand, in fiscal year
2014;
-
square footage for fiscal year 2014;
-
expectation that the holiday season will remain highly promotional and
competitive;
-
expectations regarding foreign exchange rates and the impact on
earnings;
-
expense deleverage in the fourth quarter of fiscal year 2014; and
-
omni-channel strategies driving sales in the fourth quarter of fiscal
year 2014.
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 the financial information;
-
the risk that the adoption of new accounting pronouncements will
impact future results;
-
the risk that changes in global economic conditions or consumer
spending patterns could adversely impact our results of operations;
-
the highly competitive nature of our business in the United States and
internationally;
-
the risk that we or our franchisees will be unsuccessful in gauging
apparel trends and changing consumer preferences;
-
the risk that if we are unable to manage our inventory effectively,
our gross margins will be adversely affected;
-
the risks to our efforts to expand internationally, including our
ability to operate under a global brand structure, foreign exchange,
and operating in regions where we have less experience;
-
the risks to our business, including our costs and supply chain,
associated with global sourcing and manufacturing;
-
the risks to our reputation or operations associated with importing
merchandise from foreign countries, including failure of our vendors
to adhere to our Code of Vendor Conduct;
-
the risk that trade matters could increase the cost or reduce the
supply of apparel available to us and adversely affect our business,
financial condition, and results of operations;
-
the risk that our franchisees’ operation of franchise stores is not
directly within our control and could impair the value of our brands;
-
the risk that we or our 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 our credit profile or deterioration in market
conditions may limit our access to the capital markets and adversely
impact our financial results or our business initiatives;
-
the risk that the failure to attract and retain key personnel could
have an adverse impact on our results of operations;
-
the risk that our investments in omni-channel shopping initiatives may
not deliver the results we anticipate;
-
the risk that updates or changes to our information technology (“IT”)
systems may disrupt our operations;
-
the risk that we are 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 our security
measures, which could have an adverse effect on our results of
operations and our reputation;
-
the risk that natural disasters, public health crises, political
crises, or other catastrophic events could adversely affect our
operations and financial results, or those of our franchisees or
vendors;
-
the risk that changes in the regulatory or administrative landscape
could adversely affect our financial condition, strategies, and
results of operations;
-
the risk that we do not repurchase some or all of the shares we
anticipate purchasing pursuant to our repurchase program; and
-
the risk that we 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 February 1, 2014, 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
20, 2014. 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, Piperlime, Athleta, and Intermix brands.
Fiscal year 2013 net sales were $16.1 billion. Gap Inc. products are
available for purchase in more than 90 countries worldwide through about
3,200 company-operated stores, over 400 franchise stores, and e-commerce
sites. For more information, please visit www.gapinc.com.
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|
|
The Gap, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
November 1,
|
|
|
November 2,
|
($ in millions)
|
|
|
2014
|
|
|
2013
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
954
|
|
|
$
|
996
|
Merchandise inventory
|
|
|
|
2,553
|
|
|
|
2,471
|
Other current assets
|
|
|
|
816
|
|
|
|
923
|
Total current assets
|
|
|
|
4,323
|
|
|
|
4,390
|
Property and equipment, net
|
|
|
|
2,777
|
|
|
|
2,714
|
Other long-term assets
|
|
|
|
719
|
|
|
|
682
|
Total assets
|
|
|
$
|
7,819
|
|
|
$
|
7,786
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Current maturities of debt
|
|
|
$
|
22
|
|
|
$
|
-
|
Accounts payable
|
|
|
|
1,477
|
|
|
|
1,513
|
Accrued expenses and other current liabilities
|
|
|
|
1,011
|
|
|
|
1,064
|
Income taxes payable
|
|
|
|
12
|
|
|
|
54
|
Total current liabilities
|
|
|
|
2,522
|
|
|
|
2,631
|
Long-term liabilities:
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
1,358
|
|
|
|
1,247
|
Lease incentives and other long-term liabilities
|
|
|
|
1,084
|
|
|
|
952
|
Total long-term liabilities
|
|
|
|
2,442
|
|
|
|
2,199
|
Total stockholders' equity
|
|
|
|
2,855
|
|
|
|
2,956
|
Total liabilities and stockholders' equity
|
|
|
$
|
7,819
|
|
|
$
|
7,786
|
|
|
|
|
|
|
|
|
|
|
The Gap, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
39 Weeks Ended
|
|
|
|
November 1,
|
|
|
November 2,
|
|
|
November 1,
|
|
|
November 2,
|
($ and shares in millions except per share amounts)
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
Net sales
|
|
|
$
|
3,972
|
|
|
$
|
3,976
|
|
|
$
|
11,727
|
|
|
$
|
11,573
|
Cost of goods sold and occupancy expenses
|
|
|
|
2,376
|
|
|
|
2,387
|
|
|
|
7,096
|
|
|
|
6,873
|
Gross profit
|
|
|
|
1,596
|
|
|
|
1,589
|
|
|
|
4,631
|
|
|
|
4,700
|
Operating expenses
|
|
|
|
1,042
|
|
|
|
1,013
|
|
|
|
3,067
|
|
|
|
3,073
|
Operating income
|
|
|
|
554
|
|
|
|
576
|
|
|
|
1,564
|
|
|
|
1,627
|
Interest, net
|
|
|
|
18
|
|
|
|
20
|
|
|
|
53
|
|
|
|
38
|
Income before income taxes
|
|
|
|
536
|
|
|
|
556
|
|
|
|
1,511
|
|
|
|
1,589
|
Income taxes
|
|
|
|
185
|
|
|
|
219
|
|
|
|
568
|
|
|
|
616
|
Net income
|
|
|
$
|
351
|
|
|
$
|
337
|
|
|
$
|
943
|
|
|
$
|
973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares - basic
|
|
|
|
432
|
|
|
|
463
|
|
|
|
439
|
|
|
|
465
|
Weighted-average number of shares - diluted
|
|
|
|
437
|
|
|
|
468
|
|
|
|
444
|
|
|
|
471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
|
$
|
0.81
|
|
|
$
|
0.73
|
|
|
$
|
2.15
|
|
|
$
|
2.09
|
Earnings per share - diluted
|
|
|
$
|
0.80
|
|
|
$
|
0.72
|
|
|
$
|
2.12
|
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Gap, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended
|
|
|
|
November 1,
|
|
|
November 2,
|
($ in millions)
|
|
|
2014
|
|
|
2013
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
943
|
|
|
|
$
|
973
|
|
Depreciation and amortization (a)
|
|
|
|
365
|
|
|
|
|
349
|
|
Change in merchandise inventory
|
|
|
|
(644
|
)
|
|
|
|
(723
|
)
|
Other, net
|
|
|
|
450
|
|
|
|
|
354
|
|
Net cash provided by operating activities
|
|
|
|
1,114
|
|
|
|
|
953
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
(508
|
)
|
|
|
|
(487
|
)
|
Proceeds from sale of property and equipment
|
|
|
|
121
|
|
|
|
|
-
|
|
Maturities of short-term investments
|
|
|
|
-
|
|
|
|
|
50
|
|
Other
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
Net cash used for investing activities
|
|
|
|
(388
|
)
|
|
|
|
(439
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Issuances under share-based compensation plans, net
|
|
|
|
25
|
|
|
|
|
90
|
|
Repurchases of common stock
|
|
|
|
(1,046
|
)
|
|
|
|
(875
|
)
|
Excess tax benefit from exercise of stock options and vesting of
stock units
|
|
|
|
35
|
|
|
|
|
55
|
|
Cash dividends paid
|
|
|
|
(290
|
)
|
|
|
|
(232
|
)
|
Other
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
Net cash used for financing activities
|
|
|
|
(1,276
|
)
|
|
|
|
(963
|
)
|
|
|
|
|
|
|
|
Effect of foreign exchange rate fluctuations on cash and cash
equivalents
|
|
|
|
(6
|
)
|
|
|
|
(15
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
(556
|
)
|
|
|
|
(464
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
1,510
|
|
|
|
|
1,460
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
954
|
|
|
|
$
|
996
|
|
|
|
|
|
|
|
|
(a) Depreciation and amortization is net of amortization of lease
incentives.
|
|
|
The Gap, Inc.
|
SEC REGULATION G
|
UNAUDITED
|
|
|
|
|
|
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO
FREE CASH FLOW
|
|
|
|
|
|
|
|
39 Weeks Ended
|
|
|
November 1,
|
|
November 2,
|
($ in millions)
|
|
2014
|
|
2013
|
Net cash provided by operating activities
|
|
$
|
1,114
|
|
|
$
|
953
|
|
Less: purchases of property and equipment
|
|
|
(508
|
)
|
|
|
(487
|
)
|
Free cash flow (a)
|
|
$
|
606
|
|
|
$
|
466
|
|
_________
|
|
|
|
|
(a) 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,
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.
|
Copyright Business Wire 2014