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Gap posts lower Q4 profit, plans to close 100 stores in 2009
02 Mar '09
5 min read
The effective tax rate was 39.4 percent for the fourth quarter of fiscal year 2008. The effective tax rate for fiscal year 2008 was 39.0 percent. The company expects the effective tax rate to be about 39 percent for fiscal year 2009.
Inventory:
On a year-over-year basis, the company reported that inventory per square foot was down 6 percent at the end of the fourth quarter compared with a 15 percent decline as reported at the end of the fourth quarter of fiscal year 2007. The company expects the percentage change in inventory per square foot on a year-over-year basis to be down in the high single digits at the end of the first quarter of fiscal year 2009, versus a 17 percent decrease in the first quarter of fiscal year 2008. Please see the Financials Section on www.gapinc.com for the company's explanation of numerical range guidance.
Depreciation and Amortization:
Fiscal year 2008 depreciation and amortization expense was $568 million. The company expects depreciation and amortization expense for fiscal year 2009 to be about $550 million.
Capital Expenditures:
Fiscal year 2008 capital expenditures were $431 million. The company expects capital spending of about $350 million in fiscal year 2009.
Operating Expenses:
The company reduced fiscal year 2008 operating expenses by $478 million. In the first quarter of 2009, the company expects operating expenses to be down $10 million to $30 million versus the prior year.
Real Estate:
During the fourth quarter of fiscal year 2008, the company opened 9 store locations and closed 50 store locations. This compares with 28 openings and 52 closings for the fourth quarter of the prior year.
The company ended fiscal year 2008 with 3,149 store locations, and net square footage decreased 0.3 percent from the end of fiscal year 2007.
For fiscal year 2008, the company opened 101 store locations and closed 119 store locations. These numbers include 17 repositions, which are reflected as both an opening and a closing.
For fiscal year 2009, the company expects to open about 50 stores with about half located outside the U.S. and the remaining weighted towards the Outlet business. The company expects that it will close about 100 stores, weighted towards Gap brand. Square footage is expected to decrease 2 percent for fiscal year 2009.
Inventory:
On a year-over-year basis, the company reported that inventory per square foot was down 6 percent at the end of the fourth quarter compared with a 15 percent decline as reported at the end of the fourth quarter of fiscal year 2007. The company expects the percentage change in inventory per square foot on a year-over-year basis to be down in the high single digits at the end of the first quarter of fiscal year 2009, versus a 17 percent decrease in the first quarter of fiscal year 2008. Please see the Financials Section on www.gapinc.com for the company's explanation of numerical range guidance.
Depreciation and Amortization:
Fiscal year 2008 depreciation and amortization expense was $568 million. The company expects depreciation and amortization expense for fiscal year 2009 to be about $550 million.
Capital Expenditures:
Fiscal year 2008 capital expenditures were $431 million. The company expects capital spending of about $350 million in fiscal year 2009.
Operating Expenses:
The company reduced fiscal year 2008 operating expenses by $478 million. In the first quarter of 2009, the company expects operating expenses to be down $10 million to $30 million versus the prior year.
Real Estate:
During the fourth quarter of fiscal year 2008, the company opened 9 store locations and closed 50 store locations. This compares with 28 openings and 52 closings for the fourth quarter of the prior year.
The company ended fiscal year 2008 with 3,149 store locations, and net square footage decreased 0.3 percent from the end of fiscal year 2007.
For fiscal year 2008, the company opened 101 store locations and closed 119 store locations. These numbers include 17 repositions, which are reflected as both an opening and a closing.
For fiscal year 2009, the company expects to open about 50 stores with about half located outside the U.S. and the remaining weighted towards the Outlet business. The company expects that it will close about 100 stores, weighted towards Gap brand. Square footage is expected to decrease 2 percent for fiscal year 2009.
Gap Inc
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