Gap, Inc. (the) · NYSE:GAP
Gap, Inc. (the) — FY2017 Earnings Presentation
15 slides from Gap, Inc. (the)'s earnings presentation, Mar 1, 2018
Slide 1: Fourth Quarter and Fiscal Year 2017 Earnings Results
GAP INC. FISCAL 2017 TERI LIST-STOLL E X E C U T I V E V I C E P R E S I D E N T & C H I E F F I N A N C I A L O F F I C E R FOURTH QUARTER AND FISCAL YEAR EARNINGS RESULTS ART PECK P R E S I D E N T & C H I E F E X E C U T I V E O F F I C E R Exhibit 99.3
Slide 2: Forward Looking Statements and Disclosure Statement
This 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. Forward-looking statements include statements id
Slide 3: Balanced Growth: 2017 Accomplishments and 2018 Priorities
GAP INC. BALANCED GROWTH GROW Value+ Active ACCELERATE ONLINE + MOBILE REDUCE SPECIALTY FOOTPRINT DRIVE PRODUCTIVITY GAINS THROUGH SCALE 2017 Accomplishments 2018 Priorities - Over $7B in sales at Old Navy with 6% comp sales growth - Strong topline growth at Athleta - High single digit growth in act
Slide 4: 2017 Highlights: Comp Sales
2017 HIGHLIGHTS: COMP SALES 2% 2% 1% 3% 5% -5% -3% -1% 0% 7% -6% -4% -2% 1% 3% 5% 7% Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 1 Year Comps 2 Year Comps Gap Inc. Comparable Sales 5 consecutive quarters of positive comparable sales
Slide 5: 2017 Highlights: Online Sales Growth
2017 HIGHLIGHTS: ONLINE SALES GROWTH 0% 15% 30% Q1 2016 Q4 2017 Gap Inc. Online Sales Growth Rate Acceleration in online sales growth with continued margin strength through 2017
Slide 6: 2017 Highlights: Adjusted Gross Margin
2017 HIGHLIGHTS: ADJUSTED GROSS MARGIN Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Gap Inc. Year Over Year Adjusted Gross Margin Expansion 160 bps (1)(2) 270 bps 120 bps (2) 70 bps (1)(2) 60 bps (2) 310 bps (2) 6 consecutive quarters of adjusted gross margin expansion (1) Adjusted gross margin e
Slide 7: Q4'17: SG&A Investments to Drive Results
Q4’17: SG&A INVESTMENTS TO DRIVE RESULTS SG&A Item Business Result Store Payroll Talented store labor and customer experience helped drive improved sales across portfolio Marketing Positive traffic at Old Navy and Gap, improved traffic at BR Technology and Business Intelligence Strong online sales g
Slide 8: 2017 Highlights: U.S. Stores Traffic
2017 HIGHLIGHTS: U.S. STORES TRAFFIC Q1 Q2 Q3 Q4 FY 2017 + + + + + + + + : Beat to industry traffic : Miss to industry traffic + : Positive traffic
Slide 9: Q4 Reported P&L Summary
Q4 REPORTED P&L SUMMARY Q4 2017 Q4 2016 YOY CHANGE NET SALES COMP $4,778 5% $4,429 2% +8% GROSS PROFIT % MERCHANDISE MARGIN B/(W) LY ROD % OF SALES B/(W) LY $1,759 36.8% +190bps +100bps $1,501 33.9% +50bps +60bps +17% +290bps OPERATING EXPENSES % $1,363 28.5% $1,200 27.1% +14% +140bps OPERATING INCO
Slide 10: Q4 Adjusted P&L Summary
(1) The description and reconciliation of these measures from GAAP is included in our March 1, 2018 earnings press release, which is available on gapinc.com. (2) Excludes the net provisional impacts related to tax reform of $34 million. Q4 ADJUSTED P&L SUMMARY Q4 2017 Q4 2016 (ADJUSTED) YOY CHANGE (
Slide 11: 2017: Additional Metrics
2017: ADDITIONAL METRICS $731 million Fiscal 2017 capital expenditures $1.8 billion Fiscal 2017 ending cash and cash equivalents balance +9% Year end inventory growth including 3 ppt detriment of 53rd week and 2 ppt detriment of foreign exchange $676 million Year-to-date distributions to shareholder
Slide 12: Key Revenue Recognition Changes Effective 2018
KEY REVENUE RECOGNITION CHANGES EFFECTIVE 2018 REVENUE RECOGNITION IMPACT NET SALES COST OF GOODS SOLD OPERATING EXPENSES +$412m +$174m Our fiscal 2018 guidance reflects the adoption of new revenue recognition standards. This adoption is not expected to have a material impact to our earnings, but wi
Slide 13: Key Revenue Recognition Changes Effective 2018: 2017 Illustration
KEY REVENUE RECOGNITION CHANGES EFFECTIVE 2018 Impacts of Revenue Recognition Changes: 2017 Illustration • Gross margin will increase $412 million, or 110 bps, due to the increase in net sales of $586 million ($412 million credit card income + $174 million loyalty program income) and the increase in
Slide 14: Fiscal 2018 Outlook
FISCAL 2018 OUTLOOK Full Fiscal Year 2018 Reported Diluted Earnings per Share $2.55 - $2.70 Comp Sales Flat to up slightly Net Company-Operated Store Openings: About 25 Capital Expenditures About $800 million Effective Tax Rate About 26% (1) Share Repurchases About $400 million AS OF MARCH 1, 2018 (
Slide 15: BANANA REPUBLIC
BANANA REPUBLIC @ATHLETA NTERMIX Gap Ine.