- Prachi Singh |
Gap reported first quarter fiscal year 2017 diluted earnings per share of 0.36 dollar compared with 0.32 dollar in the first quarter of fiscal year 2016. The company also reaffirmed its full-year diluted earnings per share guidance to be in the range of 1.95 dollars to 2.05 dollars.
“We are pleased with our positive comp and earnings growth this quarter,” said Art Peck, Gap’s President and CEO in a statement, adding “We've made substantial improvements in product quality and fit, and our increasing responsive capabilities are enabling us to better react to trends and demand."
First quarter comparable sales up 2 percent
The company’s comparable sales for the quarter were up 2 percent versus a 5 percent decrease last year. Comparable sales at Old Navy Global were positive 8 percent versus negative 6 percent last year, at Gap Global, negative 4 percent versus negative 3 percent last year, while at Banana Republic Global, they were negative 4 percent versus negative 11 percent last year.
Net sales were 3.4 billion dollars, about flat to the first quarter of fiscal year 2016. The company said, translation of foreign currencies into US dollars negatively impacted the company’s net sales for the first quarter by about 11 million dollars.
Gap updates H1 earnings outlook
The company has updated its diluted earnings per share guidance for the first half of fiscal year 2017 to be down mid-single digits when compared with the adjusted diluted earnings per share for the first half of fiscal year 2016, an improvement from the company’s previous guidance of down high-single digits. The company noted that foreign currency fluctuations negatively impacted earnings per share for the first quarter by an estimated 0.03 dollar or about 9 percentage points of earnings per share growth.
The company continues to expect comparable sales for fiscal year 2017 to be flat to up slightly. Net sales for the year are expected to be slightly below this range driven by an expected negative impact from foreign currency fluctuations year-over-year.
The company paid a dividend of 0.23 dollar per share during the first quarter of fiscal year 2017. In addition, the company also announced that its board of directors authorized a second quarter dividend of 0.23 dollar per share.
Gap ended the first quarter with 3,652 store locations in 50 countries, of which 3,186 were company-operated and now expects store count to be about flat at the end of fiscal year 2017 compared with fiscal year 2016, down from previous guidance of 40 net store openings.