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Gross profit up at Gap Inc
21 Aug '10
5 min read
Cash and Cash Equivalents and Short-term Investments
The company ended the second quarter with $1.7 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 $292 million compared with an inflow of $589 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.
Effective Tax Rate
The effective tax rate was 41.2 percent for the second quarter of fiscal year 2010 and 39.3 percent for the first half of fiscal year 2010.
The company continues to expect that the effective tax rate will be about 39 percent for fiscal year 2010.
Inventory
On a year-over-year basis, the company reported that inventory per square foot was up 12 percent at the end of the second quarter of fiscal year 2010. Inventory per square foot at the end of the second quarter was reduced by about 2 percentage points due to a shift in shipping terms with certain vendors. The company shifted terms in response to market conditions that were causing an increase in inventory in transit.
Depreciation and Amortization
The company continues to expect depreciation and amortization expense, net of amortization of lease incentives, for fiscal year 2010 to be about $550 million.
Capital Expenditures
Year-to-date, capital expenditures were $248 million. The company continues to expect fiscal year 2010 capital expenditures to be about $575 million. The increase from fiscal year 2009 is primarily driven by Old Navy store remodels, new international store openings, and the online launch in the United Kingdom and Canada.
Real Estate
During the second quarter of fiscal year 2010, the company opened 10 store locations and closed 19 store locations.
The company ended the second quarter of fiscal year 2010 with 3,076 store locations, and net square footage decreased about 2 percent compared with the second quarter of fiscal year 2009.
Year-to-date, the company has opened 19 stores weighted towards international and closed 38 stores weighted towards Gap brand.
The company continues to expect that it will open about 65 stores, weighted towards international and that it will close about 110 stores, weighted towards Gap brand. In addition, the company continues to expect that net square footage will decrease about 3 percent in fiscal year 2010.
The company ended the second quarter with $1.7 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 $292 million compared with an inflow of $589 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.
Effective Tax Rate
The effective tax rate was 41.2 percent for the second quarter of fiscal year 2010 and 39.3 percent for the first half of fiscal year 2010.
The company continues to expect that the effective tax rate will be about 39 percent for fiscal year 2010.
Inventory
On a year-over-year basis, the company reported that inventory per square foot was up 12 percent at the end of the second quarter of fiscal year 2010. Inventory per square foot at the end of the second quarter was reduced by about 2 percentage points due to a shift in shipping terms with certain vendors. The company shifted terms in response to market conditions that were causing an increase in inventory in transit.
Depreciation and Amortization
The company continues to expect depreciation and amortization expense, net of amortization of lease incentives, for fiscal year 2010 to be about $550 million.
Capital Expenditures
Year-to-date, capital expenditures were $248 million. The company continues to expect fiscal year 2010 capital expenditures to be about $575 million. The increase from fiscal year 2009 is primarily driven by Old Navy store remodels, new international store openings, and the online launch in the United Kingdom and Canada.
Real Estate
During the second quarter of fiscal year 2010, the company opened 10 store locations and closed 19 store locations.
The company ended the second quarter of fiscal year 2010 with 3,076 store locations, and net square footage decreased about 2 percent compared with the second quarter of fiscal year 2009.
Year-to-date, the company has opened 19 stores weighted towards international and closed 38 stores weighted towards Gap brand.
The company continues to expect that it will open about 65 stores, weighted towards international and that it will close about 110 stores, weighted towards Gap brand. In addition, the company continues to expect that net square footage will decrease about 3 percent in fiscal year 2010.
Gap Inc
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