Gap Inc (GPS) has reported 17.74 percent fall in profit for the quarter ended Oct. 29, 2016. The company has earned $204 million, or $0.51 a share in the quarter, compared with $248 million, or $0.61 a share for the same period last year. On an adjusted basis, net profit for the quarter was $238 million, when compared with $256 million in the last year period. Revenue during the quarter went down marginally by 1.53 percent to $3,798 million from $3,857 million in the previous year period. Gross margin for the quarter expanded 198 basis points over the previous year period to 39.31 percent. Total expenses were 89.76 percent of quarterly revenues, up from 89.27 percent for the same period last year. That has resulted in a contraction of 49 basis points in operating margin to 10.24 percent.
Operating income for the quarter was $389 million, compared with $414 million in the previous year period.
“I’m pleased to see improved product across our brands, as well as areas of healthier merchandise margins, even against the backdrop of challenging traffic trends during the quarter,” said Art Peck, chief executive officer, Gap Inc.
For financial year 2016, the company projects diluted earnings per share to be in the range of $1.41 to $1.50. For financial year 2016, the company projects diluted earnings per share to be in the range of $1.87 to $1.92 on adjusted basis.
Operating cash flow improves
Gap Inc has generated cash of $800 million from operating activities during the nine month period, up 8.99 percent or $66 million, when compared with the last year period. The company has spent $384 million cash to meet investing activities during the nine month period as against cash outgo of $509 million in the last year period.
The company has spent $267 million cash to carry out financing activities during the nine month period as against cash outgo of $692 million in the last year period.
Cash and cash equivalents stood at $1,522 million as on Oct. 29, 2016, up 46.07 percent or $480 million from $1,042 million on Oct. 31, 2015.
Working capital increases
Gap Inc has recorded an increase in the working capital over the last year. It stood at $1,756 million as at Oct. 29, 2016, up 10.23 percent or $163 million from $1,593 million on Oct. 31, 2015. Current ratio was at 1.60 as on Oct. 29, 2016, up from 1.58 on Oct. 31, 2015.
Days inventory outstanding has decreased to 47 days for the quarter compared with 85 days for the previous year period. At the same time, days payable outstanding went up to 52 days for the quarter from 48 for the same period last year.
Debt remains almost stable
Total debt of Gap Inc remained almost stable for the quarter at $1,744 million, when compared with the last year period. Total debt was 21.78 percent of total assets as on Oct. 29, 2016, compared with 22.44 percent on Oct. 31, 2015. Debt to equity ratio was at 0.64 as on Oct. 29, 2016, down from 0.67 as on Oct. 31, 2015. Interest coverage ratio deteriorated to 22.88 for the quarter from 23 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
