Home / Knowledge / News / Apparel/Garments / Improved merchandise margins drive Gap's Q2 gross margin
Improved merchandise margins drive Gap's Q2 gross margin
21
Aug '09
Glenn K. Murphy, Chairman and CEO
Glenn K. Murphy, Chairman and CEO
Gap Inc. reported that net earnings for the second quarter, which ended August 1, 2009, were $228 million, or $0.33 per share on a diluted basis, compared with $229 million, or $0.32 per share on a diluted basis, for the second quarter last year.

“We're proud to deliver second quarter earnings per share above last year, especially during a challenging environment,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “Building upon two years of work improving our economic model, we're now putting further emphasis on changing the trajectory of our top line performance. Our focus is to find the right balance between maintaining our cost discipline and making appropriate, targeted investments to gain back market share.”

Sales Results
Second quarter net sales were $3.25 billion, compared with $3.50 billion for the second quarter of last year. The company's second quarter comparable store sales decreased 8 percent, compared with a decrease of 10 percent for the second quarter of last year. The company's online sales for the second quarter of 2009, which includes Athleta, increased 17 percent to $224 million, compared with $191 million for the second quarter of last year.

Additional Results and 2009 Outlook
Margins
Gross margin of 39.7 percent increased 150 basis points for the second quarter compared with the prior year.

Operating margin was 11.6 percent for the second quarter compared with 10.7 percent for the prior year.

Operating Expenses
Operating expenses were down $52 million in the second quarter of fiscal year 2009 compared with the prior year. The company expects operating expenses in the third quarter of fiscal year 2009 to be flat to up about $20 million compared with the third quarter of last year, primarily driven by the expected increase in marketing expense of about $25 million in the third quarter of fiscal year 2009 compared with the third quarter of last year.

Effective Tax Rate
The effective tax rate was 39.4 percent for the second quarter of fiscal year 2009. The company continues to expect that the effective tax rate will be about 39 percent for fiscal year 2009.

Share Repurchases
The company announced that it will likely resume share repurchases in the third quarter of fiscal year 2009.

Cash and Cash Equivalents and Short-term Investments
The company ended the second quarter with $2.1 billion in cash and cash equivalents and short-term investments. Year to date, free cash flow, defined as net cash provided by operating activities less purchases of property and equipment, was an inflow of $589 million.

Inventory
On a year-over-year basis, the company reported that inventory per square foot was down 14 percent at the end of the second quarter. At the end of the third quarter of fiscal year 2009, the company expects inventory per square foot to be down in the high-single digits compared with the third quarter of fiscal year 2008.


Must ReadView All

Apparel/Garments | On 21st Sep 2017

UK fashion exports £10.7 bn in 2016; highest till now

Exports of British fashion goods rose to £10.7 billion in 2016, the...

Apparel/Garments | On 21st Sep 2017

BFC announces partnership with Chinese firm JD.com

The British Fashion Council (BFC) has forged a new partnership...

Textiles | On 21st Sep 2017

Indonesia’s textile exports may reach $15 billion by 2019

Indonesia’s textile-related exports are projected to reach $15...

Interviews View All

Manuj Terapanthi
Texaura

Transparent supply chain and fair trade will boost sustainable market

Deepak Jain
Baggout

We are using Facebook and Instagram to promote ourselves

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

September 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search