Gap posts highest third-quarter operating margin in a decade
23 Nov '09
5 min read
Dividends
The company paid a dividend of $0.085 per share during the third quarter.
Cash and Cash Equivalents and Short-term Investments
The company ended the third quarter with $2.4 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 $931 million compared with an inflow of $519 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 release.
Inventory
On a year-over-year basis, the company reported that inventory per square foot was down 9 percent at the end of the third quarter of fiscal year 2009. At the end of the fourth quarter of fiscal year 2009, the company expects inventory per square foot to be about flat compared with the fourth quarter of fiscal year 2008. Please see the Financials section under the Investors tab on www.gapinc.com for the company's explanation of numerical range guidance.
Depreciation and Amortization
The company now expects depreciation and amortization expense, net of amortization of lease incentives, for fiscal year 2009 to be about $575 million, up from its previous guidance of $550 million.
Capital Expenditures
Year to date, capital expenditures were $221 million. The company continues to expect capital spending of about $350 million for fiscal year 2009.
Real Estate
During the third quarter of fiscal year 2009, the company opened 13 store locations and closed 15 store locations. This compares with 37 openings and 17 closings for the third quarter of the prior year.
The company ended the third quarter of fiscal year 2009 with 3,143 store locations, and net square footage decreased about 0.3 percent from the end of fiscal year 2008.
Year to date, the company has opened 36 store locations, weighted towards International and Outlet, and closed 42 store locations, weighted towards Gap brand.
The company continues to expect that it will open about 50 stores and close about 100 stores for fiscal year 2009, including repositions. The company continues to expect that net square footage will decrease about 2 percent in fiscal year 2009 over last year.
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