Gap
Inc. (NYSE:GPS) today reported fourth quarter and fiscal year 2015
results and provided guidance for fiscal year 2016.
The company’s adjusted diluted earnings per share were $0.57 for the
fourth quarter of fiscal year 2015 and $2.43 for fiscal year 2015,
excluding the $25 million and $132 million pre-tax impacts of previously
announced strategic actions, respectively. Please see the
reconciliations of adjusted diluted earnings per share, a non-GAAP
financial measure, from the GAAP financial measures in the tables at the
end of this press release.
On a reported basis, the company’s diluted earnings per share were $0.53
for the fourth quarter of fiscal year 2015 and $2.23 for fiscal year
2015.
The company noted that the translation of foreign currencies into U.S.
dollars negatively impacted the company’s reported net sales for fiscal
year 2015 by about $363 million. In calculating net sales on a constant
currency basis, current year foreign exchange rates are applied to both
current year and prior year net sales. The company also noted that
foreign currency fluctuations negatively impacted earnings per share for
fiscal year 2015 by an estimated $0.14, or about 5 percentage points of
earnings per share growth.1
“With a year of transition behind us, I’m confident that we have the
right strategies in place to fuel our long-term growth,” said Art Peck,
chief executive officer, Gap Inc. “We made significant progress in 2015
transforming our product operating model, enabling us to be more
responsive to trends and market conditions, and consistently deliver
on-brand product collections.”
Peck continued, "Our brands are strengthening their connections with
customers through digital, and especially mobile, enhancements that
create richer experiences whether shopping online or in stores, or any
combination of channels."
1 In calculating earnings per share excluding the
impact of foreign exchange, 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.
Business Highlights
-
Old Navy delivered its fourth consecutive year of net sales growth in
2015.
-
Gap brand made significant progress on its transformation agenda
during fiscal year 2015, implementing a clear product aesthetic
framework and new product operating model, as well as actions to
create a smaller, more vibrant fleet of stores.
-
Athleta grew its footprint to 120 U.S. store locations by the end of
2015, and is scheduled to open about 15 additional U.S. stores in
fiscal year 2016. A new category for the brand, Athleta Girl will
launch in Summer 2016, bringing versatile, performance-based clothing
to girls 6-14 years old.
-
At the end of fiscal year 2015, Gap Factory and Banana Republic
Factory launched on a dedicated, fully responsive e-commerce platform,
making it more convenient for value shoppers to engage in a
multi-channel shopping experience.
-
For fiscal year 2015, the company generated free cash flow of about
$870 million, demonstrating the cash generating power of the Gap Inc.
portfolio. Please see the reconciliation of free cash flow, a non-GAAP
financial measure, from the GAAP financial measure in the table at the
end of this press release.
-
The company distributed about $1.4 billion to shareholders in fiscal
year 2015 through share repurchases and dividends, reinforcing Gap
Inc.’s commitment to returning excess cash to shareholders.
Comparable Sales Results
The company’s fourth quarter fiscal year 2015 comparable sales were down
7 percent versus positive 2 percent last year. For fiscal year 2015, the
company’s comparable sales were down 4 percent versus flat last year.
Comparable sales by global brand for fiscal year 2015 were as follows:
-
Gap Global: negative 6 percent versus negative 5 percent last
year
-
Banana Republic Global: negative 10 percent versus flat last
year
-
Old Navy Global: flat versus positive 5 percent last year
Net Sales Results
On a constant currency basis, net sales were $16.2 billion for fiscal
year 2015. Please see the reconciliation of adjusted net sales, a
non-GAAP financial measure, from the GAAP financial measure in the table
at the end of this press release.
On a reported basis, fourth quarter fiscal year 2015 net sales were $4.4
billion and fiscal year 2015 net sales were $15.8 billion. The
translation of foreign currencies into U.S. dollars negatively impacted
the company’s reported net sales for fiscal year 2015 by about $363
million.
The following table details the company’s fourth quarter and fiscal year
2015 net sales (unaudited):
($ in millions)
|
|
|
|
Old Navy
|
|
Banana
|
|
|
|
|
|
Percentage of
|
13 Weeks Ended January 30, 2016
|
|
Gap Global
|
|
Global
|
|
Republic Global
|
|
Other (2)
|
|
Total
|
|
Net Sales
|
U.S. (1)
|
|
$
|
935
|
|
$
|
1,635
|
|
$
|
613
|
|
$
|
201
|
|
|
3,384
|
|
77%
|
Canada
|
|
|
97
|
|
|
123
|
|
|
62
|
|
|
1
|
|
|
283
|
|
7%
|
Europe
|
|
|
204
|
|
|
-
|
|
|
17
|
|
|
-
|
|
|
221
|
|
5%
|
Asia
|
|
|
360
|
|
|
52
|
|
|
32
|
|
|
-
|
|
|
444
|
|
10%
|
Other regions
|
|
|
31
|
|
|
15
|
|
|
7
|
|
|
-
|
|
|
53
|
|
1%
|
Total
|
|
$
|
1,627
|
|
$
|
1,825
|
|
$
|
731
|
|
$
|
202
|
|
$
|
4,385
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
Old Navy
|
|
Banana
|
|
|
|
|
|
Percentage of
|
13 Weeks Ended January 31, 2015
|
|
Gap Global
|
|
Global
|
|
Republic Global
|
|
Other (3)
|
|
Total
|
|
Net Sales
|
U.S. (1)
|
|
$
|
990
|
|
$
|
1,765
|
|
$
|
700
|
|
$
|
206
|
|
|
3,661
|
|
78%
|
Canada
|
|
|
104
|
|
|
143
|
|
|
75
|
|
|
1
|
|
|
323
|
|
7%
|
Europe
|
|
|
219
|
|
|
-
|
|
|
22
|
|
|
-
|
|
|
241
|
|
5%
|
Asia
|
|
|
352
|
|
|
47
|
|
|
38
|
|
|
-
|
|
|
437
|
|
9%
|
Other regions
|
|
|
35
|
|
|
3
|
|
|
8
|
|
|
-
|
|
|
46
|
|
1%
|
Total
|
|
$
|
1,700
|
|
$
|
1,958
|
|
$
|
843
|
|
$
|
207
|
|
$
|
4,708
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
Old Navy
|
|
Banana
|
|
|
|
|
|
Percentage of
|
52 Weeks Ended January 30, 2016
|
|
Gap Global
|
|
Global
|
|
Republic Global
|
|
Other (3)
|
|
Total
|
|
Net Sales
|
U.S. (1)
|
|
$
|
3,303
|
|
$
|
5,987
|
|
$
|
2,211
|
|
$
|
712
|
|
$
|
12,213
|
|
77%
|
Canada
|
|
|
348
|
|
|
467
|
|
|
229
|
|
|
3
|
|
|
1,047
|
|
7%
|
Europe
|
|
|
726
|
|
|
-
|
|
|
71
|
|
|
-
|
|
|
797
|
|
5%
|
Asia
|
|
|
1,215
|
|
|
194
|
|
|
112
|
|
|
-
|
|
|
1,521
|
|
10%
|
Other regions
|
|
|
159
|
|
|
27
|
|
|
33
|
|
|
-
|
|
|
219
|
|
1%
|
Total
|
|
$
|
5,751
|
|
$
|
6,675
|
|
$
|
2,656
|
|
$
|
715
|
|
$
|
15,797
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
Old Navy
|
|
Banana
|
|
|
|
|
|
Percentage of
|
52 Weeks Ended January 31, 2015
|
|
Gap Global
|
|
Global
|
|
Republic Global
|
|
Other (3)
|
|
Total
|
|
Net Sales
|
U.S. (1)
|
|
$
|
3,575
|
|
$
|
5,967
|
|
$
|
2,405
|
|
$
|
725
|
|
$
|
12,672
|
|
77%
|
Canada
|
|
|
384
|
|
|
500
|
|
|
249
|
|
|
4
|
|
|
1,137
|
|
7%
|
Europe
|
|
|
824
|
|
|
-
|
|
|
93
|
|
|
-
|
|
|
917
|
|
6%
|
Asia
|
|
|
1,208
|
|
|
149
|
|
|
145
|
|
|
-
|
|
|
1,502
|
|
9%
|
Other regions
|
|
|
174
|
|
|
3
|
|
|
30
|
|
|
-
|
|
|
207
|
|
1%
|
Total
|
|
$
|
6,165
|
|
$
|
6,619
|
|
$
|
2,922
|
|
$
|
729
|
|
$
|
16,435
|
|
100%
|
(1) U.S. includes the United States, Puerto Rico, and Guam.
(2) Includes Athleta and Intermix.
(3) Includes Piperlime, Athleta, and Intermix.
Total online sales were $803 million for the fourth quarter of fiscal
year 2015 and $2.53 billion for fiscal year 2015.
Additional Fiscal Year 2015 Results and 2016 Outlook
Earnings per Share
The company expects diluted earnings per share to be in the range of
$2.20 to $2.25 for fiscal year 2016, which includes the estimated
negative impact of approximately $0.19, or over $120 million pre-tax,
due to foreign currency fluctuations at current exchange rates. This
impact equates to approximately 8 percentage points of earnings per
share growth, when compared with the company’s adjusted diluted earnings
per share of $2.43 for fiscal year 2015.
Operating Margin
The company’s operating margin for fiscal year 2015 was 9.6 percent. In
fiscal year 2016, the company expects operating margin to be about 9.5
percent.
Operating Expenses
Fourth quarter fiscal year 2015 operating expenses were $1.09 billion
compared with $1.14 billion last year. Fiscal year 2015 operating
expenses were $4.2 billion, about flat to last year.
Marketing expenses for the fourth quarter of fiscal year 2015 were $169
million, down $9 million compared with last year. For fiscal year 2015,
marketing expenses were $578 million compared with $639 million last
year.
Effective Tax Rate
For the fourth quarter of fiscal year 2015, the effective tax rate was
37.1 percent and for fiscal year 2015 the effective tax rate was 37.5
percent. For fiscal year 2016, the company expects the effective tax
rate to be about 38 percent.
Inventory
At the end of the fourth quarter of fiscal year 2015, inventory dollars
per store were about flat, in line with the company’s previous guidance.
The company noted that in fiscal year 2016 total inventory guidance will
replace the inventory per store metric. The company expects total
inventory to be down in the low single digits at the end of the first
quarter of fiscal year 2016.
Cash and Cash Equivalents
The company ended fiscal year 2015 with $1.4 billion in cash and cash
equivalents. For fiscal year 2015, free cash flow, defined as net cash
provided by operating activities less purchases of property and
equipment, was an inflow of about $870 million. 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 fourth quarter of fiscal year 2015, the company paid a
dividend of $0.23 per share and repurchased 7.6 million shares for $193
million, ending the fourth quarter of fiscal year 2015 with 397 million
shares outstanding.
During fiscal year 2015, the company distributed about $1.4 billion to
shareholders through share repurchases and dividends.
Underscoring Gap Inc.’s continued commitment to distributing cash to
shareholders, the company announced in a separate press release today
that its Board of Directors approved a $1 billion share repurchase
authorization for Gap Inc.’s stock, superseding the company’s existing
authorization dated February 26, 2015. The company also announced today
its intent to pay an annual dividend per share of $0.92 in fiscal year
2016 and that the Board of Directors authorized a first quarter fiscal
year 2016 dividend of $0.23 per share.
The company noted that it intends to allocate a portion of fiscal year
2016 cash flow towards debt repayment. As a result, the company’s fiscal
year 2016 share repurchases will likely be lower than the company’s
historic average.
Capital Expenditures
Fiscal year 2015 capital expenditures were $726 million, below the
company’s prior guidance. For fiscal year 2016, the company expects
capital spending to be approximately $650 million, with a continued
focus on mobile and supply chain capabilities.
Depreciation and Amortization
Fiscal year 2015 depreciation and amortization expense, net of
amortization of lease incentives, was $527 million. For fiscal year
2016, the company expects depreciation and amortization expense, net of
amortization of lease incentives, to be about $560 million.
Real Estate
The company ended fiscal year 2015 with 3,721 store locations in 51
countries, of which 3,275 were company-operated. Square footage of
company-operated stores was about flat compared with the end of fiscal
year 2014.
In fiscal year 2016, the company expects to open about 40
company-operated stores, net of closures and repositions. In line with
its strategy, the company expects store openings to be focused on
greater China, global outlet stores and Athleta.
The company expects square footage to be about flat in fiscal year 2016
compared with fiscal year 2015.
Store count, openings, closings, and square footage for our stores are
as follows:
|
|
13 Weeks Ended January 30, 2016
|
|
|
Store Locations Beginning of Q4
|
|
Store Locations Opened
|
|
Store Locations Closed
|
|
Store Locations End of Q4
|
|
Square Feet (millions)
|
Gap North America
|
|
939
|
|
9
|
|
82
|
|
866
|
|
9.1
|
Gap Asia
|
|
299
|
|
14
|
|
8
|
|
305
|
|
3.0
|
Gap Europe
|
|
184
|
|
1
|
|
10
|
|
175
|
|
1.5
|
Old Navy North America
|
|
1,027
|
|
9
|
|
6
|
|
1,030
|
|
17.3
|
Old Navy Asia
|
|
57
|
|
8
|
|
-
|
|
65
|
|
1.0
|
Banana Republic North America
|
|
618
|
|
6
|
|
12
|
|
612
|
|
5.1
|
Banana Republic Asia
|
|
50
|
|
1
|
|
-
|
|
51
|
|
0.2
|
Banana Republic Europe
|
|
11
|
|
1
|
|
2
|
|
10
|
|
0.1
|
Athleta North America
|
|
118
|
|
2
|
|
-
|
|
120
|
|
0.5
|
Intermix North America
|
|
43
|
|
-
|
|
2
|
|
41
|
|
0.1
|
Company-operated stores total
|
|
3,346
|
|
51
|
|
122
|
|
3,275
|
|
37.9
|
Franchise
|
|
448
|
|
10
|
|
12
|
|
446
|
|
N/A
|
Total
|
|
3,794
|
|
61
|
|
134
|
|
3,721
|
|
37.9
|
|
|
|
|
|
|
|
|
|
|
|
Webcast and Conference Call Information
Jack Calandra, senior vice president of Corporate Finance and Investor
Relations at Gap Inc., will host a summary of the company’s fourth
quarter and fiscal year 2015 results during a conference call and
webcast from approximately 2:00 p.m. to 3:00 p.m. Pacific Time today.
Mr. Calandra will be joined by Art Peck, Gap Inc. 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: 2809688). International callers
may dial 913-643-0954. The webcast can be accessed at www.gapinc.com.
February Sales
The company will report February sales on March 3, 2016.
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:
-
returning excess cash to shareholders;
-
earnings per share for fiscal year 2016;
-
operating margin for fiscal year 2016;
-
effective tax rate for fiscal year 2016;
-
total inventory at the end of the first quarter of fiscal year 2016;
-
future dividends;
-
debt repayment;
-
share repurchases in fiscal year 2016;
-
capital expenditures for fiscal year 2016;
-
depreciation and amortization for fiscal year 2016;
-
store openings in fiscal year 2016; and
-
square footage for fiscal year 2016.
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 adjustments to the company’s unaudited financial
statements may be identified through the course of the company’s
independent registered public accounting firm completing its
integrated audit of the company’s financial statements and financial
controls;
-
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 adoption of new accounting pronouncements will
impact future results;
-
the risk that the company or its franchisees will be unsuccessful in
gauging apparel trends and changing consumer preferences;
-
the risk that changes in global economic conditions or consumer
spending patterns could adversely impact the company’s results of
operations;
-
the highly competitive nature of the company’s business in the United
States and internationally;
-
the risk that if the company is unable to manage its inventory
effectively, its gross margins will be adversely affected;
-
the risks to the company’s efforts to expand internationally,
including its ability to operate under a global brand structure,
foreign exchange fluctuations, and operating in regions where it has
less experience;
-
the risks to the company’s business, including its costs and supply
chain, associated with global sourcing and manufacturing;
-
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 trade matters could increase the cost or reduce the
supply of apparel available to the company and adversely affect its
business, financial condition, and results of operations;
-
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 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, which could have an adverse effect on
the company’s results of operations and reputation;
-
the risk that the failure to attract and retain key personnel, or
effectively manage succession, could have an adverse impact on the
company’s results of operations;
-
the risk that the company’s investments in omni-channel shopping
initiatives may not deliver the results the company anticipates;
-
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 and adversely impact its financial results or business
initiatives;
-
the risk that updates or changes to the company’s information
technology systems may disrupt its operations;
-
the risk that natural disasters, public health crises, political
crises, or other catastrophic events could adversely affect the
company’s operations and financial results, or those of its
franchisees or vendors;
-
the risk that changes in the regulatory or administrative landscape
could adversely affect the company’s financial condition, strategies,
and results of operations;
-
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 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 February
25, 2016. 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
2015 net sales were $15.8 billion. Gap Inc. products are available for
purchase in more than 90 countries worldwide through about 3,300
company-operated stores, over 400 franchise stores, and e-commerce
sites. For more information, please visit www.gapinc.com.
The Gap, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
UNAUDITED
|
|
|
|
|
|
($ in millions)
|
|
January 30, 2016
|
|
January 31, 2015
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$ 1,370
|
|
$ 1,515
|
Merchandise inventory
|
|
1,873
|
|
1,889
|
Other current assets
|
|
742
|
|
913
|
Total current assets
|
|
3,985
|
|
4,317
|
Property and equipment, net
|
|
2,850
|
|
2,773
|
Other long-term assets
|
|
638
|
|
600
|
Total assets
|
|
$ 7,473
|
|
$ 7,690
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Current maturities of debt
|
|
$ 421
|
|
$ 21
|
Accounts payable
|
|
1,112
|
|
1,173
|
Accrued expenses and other current liabilities
|
|
979
|
|
1,020
|
Income taxes payable
|
|
23
|
|
20
|
Total current liabilities
|
|
2,535
|
|
2,234
|
Long-term liabilities:
|
|
|
|
|
Long-term debt
|
|
1,310
|
|
1,332
|
Lease incentives and other long-term liabilities
|
|
1,083
|
|
1,141
|
Total long-term liabilities
|
|
2,393
|
|
2,473
|
Total stockholders' equity
|
|
2,545
|
|
2,983
|
Total liabilities and stockholders' equity
|
|
$ 7,473
|
|
$ 7,690
|
|
|
|
|
|
The Gap, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
($ and shares in millions except per share amounts)
|
|
January 30, 2016
|
|
January 31, 2015
|
|
January 30, 2016
|
|
January 31, 2015
|
Net sales
|
|
$
|
4,385
|
|
$
|
4,708
|
|
$
|
15,797
|
|
$
|
16,435
|
Cost of goods sold and occupancy expenses
|
|
|
2,945
|
|
|
3,050
|
|
|
10,077
|
|
|
10,146
|
Gross profit
|
|
|
1,440
|
|
|
1,658
|
|
|
5,720
|
|
|
6,289
|
Operating expenses
|
|
|
1,085
|
|
|
1,139
|
|
|
4,196
|
|
|
4,206
|
Operating income
|
|
|
355
|
|
|
519
|
|
|
1,524
|
|
|
2,083
|
Interest, net
|
|
|
15
|
|
|
17
|
|
|
53
|
|
|
70
|
Income before income taxes
|
|
|
340
|
|
|
502
|
|
|
1,471
|
|
|
2,013
|
Income taxes
|
|
|
126
|
|
|
183
|
|
|
551
|
|
|
751
|
Net income
|
|
$
|
214
|
|
$
|
319
|
|
$
|
920
|
|
$
|
1,262
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares - basic
|
|
|
400
|
|
|
423
|
|
|
411
|
|
|
435
|
Weighted-average number of shares - diluted
|
|
|
402
|
|
|
428
|
|
|
413
|
|
|
440
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
$
|
0.54
|
|
$
|
0.75
|
|
$
|
2.24
|
|
$
|
2.90
|
Earnings per share - diluted
|
|
$
|
0.53
|
|
$
|
0.75
|
|
$
|
2.23
|
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
The Gap, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
UNAUDITED
|
|
|
|
|
|
|
|
52 Weeks Ended
|
($ in millions)
|
|
January 30, 2016
|
|
January 31, 2015
|
Cash flows from operating activities:
|
|
|
|
|
Net income
|
|
$
|
920
|
|
|
$
|
1,262
|
|
Depreciation and amortization (a)
|
|
|
527
|
|
|
|
500
|
|
Change in merchandise inventory
|
|
|
(6
|
)
|
|
|
(9
|
)
|
Other, net
|
|
|
153
|
|
|
|
376
|
|
Net cash provided by operating activities
|
|
|
1,594
|
|
|
|
2,129
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(726
|
)
|
|
|
(714
|
)
|
Proceeds from sale of property and equipment
|
|
|
-
|
|
|
|
121
|
|
Other
|
|
|
(4
|
)
|
|
|
(3
|
)
|
Net cash used for investing activities
|
|
|
(730
|
)
|
|
|
(596
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Proceeds from issuance of short-term debt
|
|
|
400
|
|
|
|
-
|
|
Payments of long-term debt
|
|
|
(21
|
)
|
|
|
(21
|
)
|
Issuances under share-based compensation plans, net
|
|
|
(4
|
)
|
|
|
38
|
|
Repurchases of common stock
|
|
|
(1,015
|
)
|
|
|
(1,179
|
)
|
Excess tax benefit from exercise of stock options and vesting of
stock units
|
|
|
28
|
|
|
|
38
|
|
Cash dividends paid
|
|
|
(377
|
)
|
|
|
(383
|
)
|
Other
|
|
|
(1
|
)
|
|
|
-
|
|
Net cash used for financing activities
|
|
|
(990
|
)
|
|
|
(1,507
|
)
|
|
|
|
|
|
Effect of foreign exchange rate fluctuations on cash and cash
equivalents
|
|
|
(19
|
)
|
|
|
(21
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(145
|
)
|
|
|
5
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,515
|
|
|
|
1,510
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,370
|
|
|
$
|
1,515
|
|
|
|
|
|
|
(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,
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.
|
|
|
|
|
|
|
|
52 Weeks Ended
|
($ in millions)
|
|
January 30, 2016
|
|
January 31, 2015
|
Net cash provided by operating activities
|
|
$
|
1,594
|
|
|
$
|
2,129
|
|
Less: Purchases of property and equipment
|
|
|
(726
|
)
|
|
|
(714
|
)
|
Free cash flow
|
|
$
|
868
|
|
|
$
|
1,415
|
|
|
|
|
|
|
|
|
|
|
The Gap, Inc.
|
NON-GAAP FINANCIAL MEASURES
|
UNAUDITED
|
|
|
|
|
|
ADJUSTED EARNINGS PER SHARE
|
|
|
|
|
|
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 underlying results for the periods
excluding impact from its strategic actions primarily related to Gap
brand. However, this non-GAAP financial measure is not intended to
supersede or replace our GAAP results.
|
|
|
|
|
|
|
|
13 Weeks Ended January 30, 2016
|
|
52 Weeks Ended January 30, 2016
|
Earnings per share - diluted
|
|
$
|
0.53
|
|
$
|
2.23
|
Add: Impact from strategic actions (a)
|
|
|
0.04
|
|
|
0.20
|
Adjusted earnings per share - diluted
|
|
$
|
0.57
|
|
$
|
2.43
|
|
|
|
|
|
____________________
|
|
|
|
|
(a) Represents the earnings per share impact of previously announced
strategic actions primarily related to Gap brand. The charges
associated with the strategic actions primarily include lease
termination fees, store asset impairments, inventory impairment, and
employee related costs.
|
|
The Gap, Inc.
|
NON-GAAP FINANCIAL MEASURES
|
UNAUDITED
|
|
|
|
ADJUSTED NET SALES IN CUMULATIVE CONSTANT CURRENCY FOR FISCAL
2012 TO FISCAL 2015
|
|
|
|
Adjusted net sales is a non-GAAP financial measure. Adjusted net
sales is provided to enhance visibility into the cumulative impact
of depreciating foreign currency on the company's net sales results
from fiscal 2012 to fiscal 2015. The table below is a calculation of
net sales that could have been achieved if the negative impact on
annual sales due to foreign currency depreciation were added back to
the reported net sales of the current fiscal year. However, this
non-GAAP financial measure is not intended to supersede or replace
our GAAP results.
|
|
|
|
|
|
Net Sales in Cumulative Constant Currency
|
Fiscal 2015 net sales - as reported
|
|
$
|
15,797
|
Add: Constant currency impact (a)
|
|
|
Fiscal 2015 versus fiscal 2014
|
|
|
363
|
Fiscal 2014 versus fiscal 2013
|
|
|
127
|
Fiscal 2013 versus fiscal 2012
|
|
|
240
|
Total constant currency impact
|
|
|
730
|
Adjusted net sales in cumulative constant currency
|
|
$
|
16,527
|
|
|
|
____________________
|
|
|
(a) In calculating net sales impact on a constant currency basis,
current year foreign exchange rates are applied to both current year
and prior year net sales.
|
|
The Gap, Inc.
|
NON-GAAP FINANCIAL MEASURES
|
UNAUDITED
|
|
|
|
ADJUSTED NET SALES IN CONSTANT CURRENCY FOR FISCAL 2015 VERSUS
FISCAL 2014
|
|
|
|
Adjusted net sales is a non-GAAP financial measure. Adjusted net
sales is provided to enhance visibility into the company's
underlying results for the period in constant currency from fiscal
2014 to fiscal 2015. However, this non-GAAP financial measure is not
intended to supersede or replace our GAAP results.
|
|
|
|
|
|
Net Sales in Constant Currency
|
Fiscal 2015 net sales - as reported
|
|
$
|
15,797
|
Add: Constant currency impact from fiscal 2015 versus fiscal 2014 (a)
|
|
|
363
|
Adjusted net sales in constant currency
|
|
$
|
16,160
|
|
|
|
____________________
|
|
|
(a) In calculating net sales impact on a constant currency basis,
current year foreign exchange rates are applied to both current year
and prior year net sales.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160225006613/en/
Copyright Business Wire 2016