SAN FRANCISCO - April 17, 2013 - (BUSINESS WIRE) - Gap Inc. (NYSE:GPS) today is announcing detailed plans to strategically gain market share in North America and around the world through its portfolio of six brands – Gap, Banana Republic, Old Navy, Athleta, Piperlime and newly-acquired Intermix - while investing further in its leading digital and online capabilities.
“Gap Inc. is determined to build upon its product and revenue momentum in 2012, which was achieved as we focused on becoming the world’s favorite for American style,” says Glenn Murphy, chairman and chief executive officer of Gap Inc. “There is meaningful opportunity for our diverse portfolio of brands to gain share in the $1.4 trillion global apparel market.”
“Over the next five years, key to our continued success will be pushing the envelope further to make shopping seamless to customers through our digital strategy, while seizing the opportunity for Old Navy in many untapped international markets,” Murphy adds.
Company executives have confidence about the long-term growth potential of the brands and will reaffirm their intention to expand through geographies and channels including specialty, online, outlet and franchise. The company is announcing it expects to start to franchise Old Navy in 2014 in key international markets. Additionally, it will consider building upon its success with Gap in China by exploring adding company-operated Old Navy and Banana Republic stores to this important market. Murphy and company leaders are discussing the opportunities to continue the growth of its emerging brands – Athleta, Piperlime and Intermix – in North America.
In addition to Gap Inc.’s competitive advantage given its multiple brand, channel and geography model, the company plans to build upon its online success by delivering an industry-leading omni-channel platform for consumers as the retail landscape continues to merge online and brick-and-mortar shopping experiences. This end-to-end system, which includes capabilities such as ship-from-store, find-in-store and reserve-in-store, is designed to leverage Gap Inc. channels and resources to drive store traffic and conversion, while meeting the needs of customers who increasingly demand an integrated shopping experience.
As it has the last number of years, the company will underscore its commitment to delivering against long-term financial strategies and goals.
“We are committed to driving shareholder value and remain focused on our economic model of consistently growing sales, maintaining strong expense discipline, growing earnings per share and returning excess cash to shareholders,” says Sabrina Simmons, executive vice president and chief financial officer, Gap Inc.
In addition to Murphy and Simmons, the following members of Gap Inc.’s management team are slated to provide updates at today's meeting (in the following order):
The live webcast is accessible on the Financial News and Events page at www.gapinc.com/investors until approximately noon PT. A replay of this event will be available on www.gapinc.com.
Alternatively, audio of the meeting will be accessible until its conclusion via phone by dialing 855-5000-GPS (855-500-0477) for domestic callers or 913-643-0954 for international callers. The conference ID number is 7402090.
This press release and the related conference call and webcast contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as "expect," "anticipate," "believe," "estimate," "intend," "plan," "project," and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding:
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the company's actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following:
Additional information regarding factors that could cause results to differ can be found in the company's Annual Report on Form 10-K for the fiscal year ended February 2, 2013.
Future economic and industry trends that could potentially impact net sales and profitability are difficult to predict. These forward-looking statements are based on information as of April 17, 2013. The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
The related conference call and webcast also includes the non-GAAP measure–free cash flow–which under SEC Regulation G we are required to reconcile to GAAP measures. Reconciliations of the free cash flow measures to GAAP financial measures are included in the table at the end of this release.
Gap Inc. is a leading global retailer offering clothing, accessories, and personal care products for men, women, children, and babies under the Gap, Banana Republic, Old Navy, Piperlime, Athleta, and Intermix brands. Fiscal year 2012 net sales were $15.7 billion. Gap Inc. products are available for purchase in more than 90 countries worldwide through about 3,100 company-operated stores, over 300 franchise stores, and e-commerce sites. For more information, please visit www.gapinc.com.
|The Gap, Inc.|
|SEC REGULATION G|
|RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW|
|Fiscal Year (number of weeks)|
|($ in millions)||2012 (53||)||2011 (52||)||2010 (52||)||2009 (52||)||2008 (52||)||2007 (52||)||2006 (53||)||2005 (52||)||2004 (52||)|
|Net cash provided by operating activities||$||1,936||$||1,363||$||1,744||$||1,928||$||1,412||$||2,081||$||1,250||$||1,551||$||1,597|
|Less: Purchases of property and equipment||(659||)||(548||)||(557||)||(334||)||(431||)||(682||)||(572||)||(600||)||(419||)|
|Free cash flow (a)||$||1,277||$||815||$||1,187||$||1,594||$||981||$||1,399||$||678||$||951||$||1,178|
|(a) Free cash flow is a non-GAAP financial measure. We believe free cash flow is an important metric because it represents a measure of how much cash a company has available for discretionary and non-discretionary items after the deduction of capital expenditures, as we require regular capital expenditures to build and maintain stores and purchase new equipment to improve our business. We use this metric internally, as we believe our sustained ability to generate free cash flow is an important driver of value creation. However, this non-GAAP financial measure is not intended to supersede or replace our GAAP results.|