News Column

Gap Inc. Reports First Quarter Results

June 3, 2014

By a News Reporter-Staff News Editor at China Weekly News -- Gap Inc. (NYSE: GPS) reported first quarter fiscal year 2014 earnings per share of $0.58 on a diluted basis. Net sales for the first quarter increased 1 percent to $3.77 billion compared with $3.73 billion last year.

"After a disappointing start, I'm pleased with how the business performed toward the end of the quarter, especially at Old Navy," said Glenn Murphy, chairman and chief executive officer of Gap Inc. "We are confident in our strategies to drive long-term value, as evidenced by the reaffirmation of our full-year guidance."

As reinforced at its annual investor meeting last month, during the quarter the company continued to focus on its strategic initiatives - global growth, omni-channel strategies, a seamless inventory model and a responsive supply chain - designed to achieve long-term, profitable growth across its portfolio of brands. Additional Financial and Business Highlights During the first quarter of fiscal year 2014, Old Navy opened its first company-operated store and e-commerce site in mainland China, allowing customers in the world's second-largest apparel market to shop the brand's offering for the entire family. During the quarter, Old Navy also opened its first-ever franchise-operated store in the Philippines, with plans to open a total of five Old Navy franchise stores in that market during 2014.

Gap brand debuted in Taiwan during the first quarter of fiscal year 2014, while also continuing to grow its store base in mainland China. The brand is on track to open approximately 30 additional Gap stores in the greater China region during fiscal year 2014.

With six new store openings during the first quarter of fiscal year 2014, the company continued to grow its Athleta brand, bringing together fashion and performance to create premium, versatile products for its customers. Athleta is now on track to end the year with about 100 U.S. stores.

The company increased online net sales 13 percent to $575 million for the first quarter of fiscal year 2014, on top of last year's 27 percent increase, continuing its progress toward bridging the growing digital world with its physical stores to create world-class shopping experiences for its customers. First Quarter Results Net sales for the first quarter increased 1 percent to $3.77 billion compared with $3.73 billion last year. The company noted that the translation of foreign revenues into dollars negatively impacted reported net sales by approximately $20 million in the first quarter of fiscal year 2014.

Net sales increased 2 percent on a constant currency basis for the first quarter of fiscal year 2014. In calculating net sales growth on a constant currency basis, current year foreign exchange rates are applied to both current year and prior year net sales. This is done to enhance the visibility of underlying business trends, excluding the impact of foreign currency exchange rate fluctuations.

The company's first quarter comparable sales decreased 1 percent compared with a 2 percent increase in the first quarter of last year.

Keywords for this news article include: Asia, China, Gap Inc.

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Source: China Weekly News

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