March 9, 2023 — Gap Inc. (NYSE: GPS), a portfolio of purpose-led, billion-dollar lifestyle brands including Old Navy, Gap, Banana Republic, and Athleta, and the largest specialty apparel company in the U.S., today reported financial results for its fourth quarter and fiscal year ended January 28, 2023.
Gap Inc. (NYSE: GPS) reported a fiscal Q4 net loss of $0.75 per diluted share,
Analysts polled by Capital IQ forecast a per-share loss of $0.48.
Net sales for the quarter ended Jan. 28 were $4.24 billion,
Analysts surveyed by Capital IQ projected $4.37 billion.
The retailer’s comparable sales were down 5% in fiscal Q4. Analysts polled by Capital IQ called for a decrease of 2.9%.
Gap said it estimates fiscal Q1 sales to decrease in the mid-single digit range compared to last year’s sales of $3.5 billion. Analysts polled by Capital IQ are looking for $3.51 billion.
The company also expects fiscal 2023 sales to drop in the low to mid-single digit range compared with fiscal 2022 sales of $15.6 billion. Analysts surveyed by Capital IQ are expecting $15.99 billion.
“To enter fiscal 2023 in a more competitive position, we took quick and effective action to clear excess inventory, improve assortment balance, particularly at Old Navy, and to meaningfully optimize our cost structure, resulting in $550 million in annualized savings identified to date,” said Bob Martin, Gap Inc. Executive Chairman and Interim CEO. “The Board is getting close to choosing the next CEO for Gap Inc. As a result of the work we have underway to build a stronger foundation and restore the company’s creative muscle, we are optimistic that this will provide our new leader with a quicker ramp in driving consistent, profitable growth over the long term.”
Fourth Quarter Fiscal 2022
Net sales of $4.24 billion, down 6% compared to last year, Comparable sales down 5% year-over-year . Store sales decreased 3% compared to last year. Online sales decreased 10% compared to last year and represented 41% of total net sales.
Gross margin was 33.6%, deleveraging 10 basis points versus last year.
The company ended the year with 3,352 store locations in over 40 countries, of which 2,685 were company operated.
Ended the year with cash and cash equivalents of $1.2 billion.
Fiscal year 2022 net cash from operating activities was $607 million. Fiscal year 2022 free cash flow, defined as net cash from operating activities less purchases of property and equipment, was negative $78 million.
Ending inventory of $2.39 billion was down 21% year-over-year.
Fiscal year 2022 capital expenditures were $685 million.
Paid fourth quarter dividend of $0.15 per share, totaling $54 million. Paid dividends totaling $220 million in fiscal year 2022. Board of Directors approved first quarter fiscal 2023 dividend of $0.15 per share.
Fiscal 2023 Outlook
The company is estimating first quarter net sales could decrease in the mid-single digit range compared to last year’s net sales of $3.5 billion.
The company anticipates that fiscal 2023 net sales could decrease in the low to mid-single digit range compared to last year’s net sales of $15.6 billion.
The Gap, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
About Gap Inc.
Gap Inc., a collection of purpose-led lifestyle brands, is the largest American specialty apparel company offering clothing, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. The company uses omni-channel capabilities to bridge the digital world and physical stores to further enhance its shopping experience. Gap Inc. is guided by its purpose, Inclusive, by Design, and takes pride in creating products and experiences its customers love while doing right by its employees, communities, and planet. Gap Inc. products are available for purchase worldwide through company-operated stores, franchise stores, and e-commerce sites. Fiscal year 2022 net sales were $15.6 billion. For more information, please visit www.gapinc.com.