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Thursday, February 28, 2019

====Gap (GPS) reported earnings on Thur 28 Feb 19 (a/h)




  • Gap (GPS) is soaring in after-hours trading on Thursday, following an announcement that it plans to split off Old Navy into a stand-alone company.

Gap beats by $0.03, misses on revs; guides FY19 EPS in-line; plans to separate into two publicly traded companies: Old Navy, and a yet-to-be-named company to include Gap, Athleta, Banana Republic, Intermix and Hill City 
  • Reports Q4 (Jan) earnings of $0.72 per share, $0.03 better than the S&P Capital IQ Consensus of $0.69; revenues fell 3.2% year/year to $4.62 bln vs the $4.69 bln S&P Capital IQ Consensus. the company's fourth quarter comparablesales were down 1% compared with a 5% increase last year
    • Old Navy comps were flat
    • Gap comps were negative 5%
    • Banana Republic comps were negative 1%
  • Co issues in-line guidance for FY19, sees EPS of $2.40-2.55, excluding non-recurring items, vs. $2.55 S&P Capital IQ Consensus. The company expects comparable sales for fiscal year 2019 to be flat to up slightly.
  • GPS also announced plans to separate into two publicly traded companies: Old Navy, and a yet-to-be-named company ("NewCo"), which will consist of the iconic Gap brand, Athleta, Banana Republic, Intermix and Hill City.
  • The company announced a plan today to restructure the specialty fleet, including the closure of about 230 Gap specialty stores over the next two years.
  • The company estimates an annualized sales loss of approximately $625 million as a result of these store closures. Additionally, the company estimates pre-tax costs associated with these actions to be about $250 million to $300 million, with the majority expected to be cash expenditures. The company estimates that these actions will result in annualized pretax savings of about $90 million.

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