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Gap profit falls by 50% in Q2, lowers forecast
18 Aug '06
3 min read
During the second quarter, the company repurchased 6 million shares for $111 million. This completed the $500 million authorization that was announced at the beginning of fiscal year 2006. At the end of the second quarter, the company's outstanding shares were 835 million. In addition, the company announced on August 3, 2006 that the Board of Directors authorized an additional $750 million for its share repurchase program.
The company paid a $0.08 per share dividend in the second quarter, which is nearly double compared to the quarterly dividend from the same period last year.
Gross margins declined 4.4 points in the second quarter compared to the prior year. Operating margin for the second quarter was 5 percent.
Through July 29th 2006, the company opened 75 store locations and closed 43. Net square footage for the second quarter increased 3 percent compared to the same period last year. It is updating its guidance for fiscal year 2006 store openings and closings.
For fiscal 2006, the company now expects to open about 190 store locations up from 175 store locations, weighted toward Old Navy, and to close about 125 store locations down from 135 store locations, weighted toward Gap brand. With the additional new stores, net square footage is now expected to increase between 2 and 3 percent for fiscal 2006.
Gap Inc is one of the world's largest specialty retailers, with more than 3,000 stores and fiscal 2005 revenues of $16 billion. It operates four of the most recognized apparel brands in the world — Gap, Banana Republic, Old Navy and Forth & Towne.
The company paid a $0.08 per share dividend in the second quarter, which is nearly double compared to the quarterly dividend from the same period last year.
Gross margins declined 4.4 points in the second quarter compared to the prior year. Operating margin for the second quarter was 5 percent.
Through July 29th 2006, the company opened 75 store locations and closed 43. Net square footage for the second quarter increased 3 percent compared to the same period last year. It is updating its guidance for fiscal year 2006 store openings and closings.
For fiscal 2006, the company now expects to open about 190 store locations up from 175 store locations, weighted toward Old Navy, and to close about 125 store locations down from 135 store locations, weighted toward Gap brand. With the additional new stores, net square footage is now expected to increase between 2 and 3 percent for fiscal 2006.
Gap Inc is one of the world's largest specialty retailers, with more than 3,000 stores and fiscal 2005 revenues of $16 billion. It operates four of the most recognized apparel brands in the world — Gap, Banana Republic, Old Navy and Forth & Towne.
Gap Inc
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