Gap posts $3.7 billion sales in Q1

The comparable sales were down 4 per cent compared from 1 per cent increase last year. During the first quarter, comparable sales of Old Navy Global, Gap Global and Banana Republic Global lowered by 1 per cent, 10 per cent and 3 per cent respectively.

“This quarter was extremely challenging, and we are not at all satisfied with our results. We are committed to improving our execution and performance this year,” said Art Peck, president and chief executive officer, Gap Inc. “We remain confident in our plan to separate into two independently traded public companies in 2020, and we are focused on setting up both companies for long term value creation and profitable growth.”

The company ended the first quarter of fiscal year 2019 with 3,849 store locations in 44 countries, of which 3,335 were company-operated. At the end of first quarter of fiscal, the company had $1.2 billion in cash, cash equivalents, and short-term investments. Year-to-date free cash flow, defined as net cash from operating activities less purchases of property and equipment, was negative $136 million compared with negative $204 million last year.

In the reported period, diluted earnings per share was $0.60 on a reported basis, and $0.24 on an adjusted basis, excluding the gain on sale of a building, costs associated with the company’s planned separation, and costs related to the previously announced specialty fleet restructuring.

The company now expects comparable sales for fiscal year 2019 to be down low single digits. Effective tax rate is likely to be about 27 per cent. Excluding certain non-cash tax impacts related to expected restructuring charges, the company expects its adjusted fiscal year 2019 effective tax rate to be about 26 per cent. (RR)

Fibre2Fashion News Desk – India