Top line growth will continue to be focus in 2011, Gap Inc

25 Feb '11

6 min read

Delivering its fourth consecutive year of double-digit earnings per share growth, Gap Inc reported earnings per share for fiscal year 2010 increased 19 percent to $1.88 on a diluted basis compared with $1.58 on a diluted basis for fiscal year 2009. Net earnings grew by $102 million to $1.2 billion.

“During 2010, we executed well on our goal of delivering sales improvement alongside our fourth consecutive year of double-digit earnings per share growth,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “We remain committed to investing in the future and executing with speed and consistency, allowing us to capitalize on the enormous global growth potential ahead of us.”

Over the past year, Gap Inc. delivered on its promise to bring more customers worldwide the opportunity to purchase its products. In fiscal year 2010, the company opened its first flagship stores in Italy and China and expanded its online presence to over 90 countries, including the launch of dedicated sites in Canada, Europe and China. The company's online and international businesses represented 22 percent of the total fiscal year 2010 revenue, up 2 percent from the previous year.

Top line growth will continue to be a focus in fiscal year 2011. The company plans to make targeted, long-term growth investments such as the following: continuing to remodel Old Navy stores with the goal of having nearly 400 in the new format by the end of fiscal year 2011; opening about 75 new franchise stores; opening about 50 company-owned stores internationally, including about 10 to 15 stores in China, 8 to 10 stores in Italy, and 25 outlet stores; expanding Athleta in North America, with about 8 to 10 store openings by the end of fiscal year 2011; and continuing to grow online, both internationally and domestically.

For the fourth quarter, which ended January 29, 2011, the company's net earnings increased 4 percent to $365 million, or $0.60 per share on a diluted basis, compared with $352 million, or $0.51 per share on a diluted basis, for the same period last year.

Fourth quarter net sales were $4.36 billion compared with $4.24 billion for the fourth quarter of last year. The company's fourth quarter comparable store sales were flat compared with an increase of 2 percent in the fourth quarter of the prior year. The company's sales for the Direct division for the fourth quarter increased 23 percent to $404 million compared with $329 million for the fourth quarter of last year.

Net sales were $14.66 billion for the 52 weeks ended January 29, 2011, which is an increase of 3 percent compared with net sales of $14.20 billion for the 52 weeks ended January 30, 2010. The company's fiscal year 2010 comparable store sales increased 1 percent compared with a decrease of 3 percent for the prior year. The company's sales for the Direct division for fiscal year 2010 increased 16 percent to $1.30 billion compared with $1.12 billion in the prior year. The company's comparable store sales including the associated comparable online sales increased 2 percent for fiscal year 2010.

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