Gap Inc., a leading global retailer offering clothing, accessories, and personal care products for men, women, and children, has recorded net sales of $4.8 billion for the fourth quarter of fiscal 2017, an 8 per cent increase, with sales of $15.9 billion for full year 2017. The company’s fourth quarter fiscal 2017 comparable sales were up 5 per cent.
The company’s operating margin for fiscal 2017 was 9.3 per cent compared with 7.7 per cent last year. The company’s adjusted operating margin for fiscal 2017 was 8.9 per cent compared with adjusted operating margin of 8.9 per cent last year.
The adjusted diluted earnings per share were $0.61 for the fourth quarter of fiscal year 2017 and $2.13 for fiscal year 2017, inclusive of the 53rd week, compared with fourth quarter and fiscal year 2016 adjusted diluted earnings per share of $0.51 and $2.02, respectively
Fourth quarter fiscal 2017 operating expenses were $1.36 billion compared with $1.20 billion last year. Excluding $26 million in restructuring charges, a $71 million goodwill impairment charge related to Intermix, and a $73 million gain from insurance proceeds related to the fire that occurred on the company’s Fishkill, New York distribution centre campus recorded in the fourth quarter of fiscal year 2016, operating expenses were up about $187 million, on an adjusted basis.
The company ended fiscal 2017 with about $1.8 billion in cash and cash equivalents. For fiscal 2017, free cash flow, defined as net cash provided by operating activities less purchases of property and equipment, net of insurance proceeds related to loss of property and equipment, was $715 million, reflecting the timing of lease payments and a larger increase in inventory from the beginning to end of the fiscal year when compared to the same period in fiscal year 2016.
"Our strong positive comp and margin expansion during the critical holiday quarter affirms our balanced growth strategy," said Art Peck, president and chief executive officer, Gap Inc. "Our outlook for 2018 demonstrates confidence in our strategy and a meaningful step up in earnings capacity for the company."
"We are positioning the company for long term growth. In addition to leveraging productivity initiatives to fund investments in the business, recent tax reform changes provide a meaningful increase in future earnings," said Teri List-Stoll, executive vice president and chief financial officer, Gap Inc.
For fiscal year 2018, the company expects diluted earnings per share to be in the range of $2.55 to $2.70 and comparable sales for fiscal year 2018 are expected to be flat to up slightly. Additionally, the company intends to continue its share repurchase programme, currently expecting to repurchase approximately $100 million per quarter.