• Home
  • News
  • Business
  • Gap earnings improve 5 percent in FY14, updates outlook

Gap earnings improve 5 percent in FY14, updates outlook

By Prachi Singh

loading...

Scroll down to read more

Business |REPORT

Gap’s diluted earnings per share increased 10 percent for the fourth quarter of fiscal year 2014 to 0.75 dollars per share and 5 percent to 2.87 dollars for the 2014 fiscal year. Excluding the year-over-year impact from foreign exchange, the company’s diluted earnings per share increased approximately 20 percent for the fourth quarter of fiscal year 2014 and approximately 10 percent for fiscal year 2014.

“Looking ahead at 2015, we will continue executing our global growth strategy, bringing new digital capabilities to life and making the shifts necessary to consistently deliver the brand-right,” said Art Peck, Chief Executive Officer, Gap.

The company’s largest global brand, Old Navy, delivered positive comparable sales results during each quarter of fiscal year 2014, including a positive 11 percent increase during the fourth quarter. Gap continued to execute its long-term global growth strategy by adding 39 new stores in greater China during fiscal year 2014, including 7 new Old Navy stores and 32 new Gap stores. Additionally, the company announced plans to open about 40 new stores in greater China during fiscal year 2015. Athleta grew its US footprint to 101 stores during fiscal year 2014, and the brand plans to open about 20 additional US stores during fiscal year 2015.

Net sales were up 3 percent to 4.71 billion dollars, compared with 4.58 billion dollars for the fourth quarter of fiscal year 2013. The company’s fourth quarter comparable sales were positive 2 percent versus positive 1 percent last year. On a constant currency basis, net sales increased 5 percent. Net income for the fourth quarter of fiscal year 2014 was 319 million dollars.

For fiscal year 2014, net sales increased 2 percent to 16.44 billion dollars, compared with net sales of 16.15 billion dollars for the 2013 fiscal year, driven by strong performance at Old Navy. On a constant currency basis, net sales increased 3 percent. Net income was 1.26 billion dollars, or 2.87 dollars per share on a diluted basis. The company’s comparable sales for fiscal year 2014 were flat versus a 2 percent increase last year.

Comparable sales at Gap Global were negative 5 percent versus positive 3 percent last year, at Banana Republic Global, flat versus negative 1 percent last year, Old Navy Global, positive 5 percent versus positive 2 percent last year. Total online sales were 792 million dollars for the fourth quarter of fiscal year 2014 compared with 698 million dollars in the fourth quarter last year. For fiscal year 2014, total online sales were 2.50 billion dollars compared with 2.26 billion dollars for fiscal year 2013.

The company expects diluted earnings per share to be in the range of 2.75 dollars to 2.80 dollars for fiscal year 2015. In fiscal year 2015, the company expects to open about 115 company-operated stores, net of closures and repositions, focused on greater China, Athleta and global outlet stores. Additionally, the company expects its franchise partners to open about 35 additional stores in 2015, net of closures.

Gap