For the second fiscal quarter of 2016 ended August 1, 2015, net sales at apparel marketer Gap Inc went down 2 per cent impacted by translation of net sales in foreign currencies into US dollars. For the three months to August 1, 2015 Gap Inc.’s net sales declined 2 per cent to $3.90 billion compared with $3.98 billion for the second quarter of last fiscal. Comparable sales for the reporting quarter were also down 2 per cent vis-à-vis flat in the prior fiscal’s second quarter. “On a constant currency basis, net sales for the second quarter of fiscal 2016 were nearly flat as against the same period of the earlier fiscal,” a press release from Gap informed. “In calculating the net sales change on a constant currency basis, current year foreign exchange rates are applied to both current year and prior year net sales,” the clothing marketer said. “This is done to enhance the visibility of underlying sales trends, excluding the impact of foreign currency exchange rate fluctuations,” Gap added. “The translation of net sales in foreign currencies into US dollars negatively impacted sales by about $100 million, primarily due to the weakening Japanese yen and Canadian dollar,” it explained. According to Gap, on top of three consecutive years of growth, the Old Navy brand delivered another quarter of positive comparable sales, demonstrating the continued success of its trend-predictive product pipeline. “Gap brand continues to make progress against its strategic actions, including right-sizing its North America store count to create a smaller, more vibrant fleet of stores,” it observed. Gap further added that during the quarter, it expanded its ‘Reserve in Store’ service to all US Athleta stores, while its ‘Order in Store” capabilities continued to offer more customers expanded inventories. On a reported basis, Gap Inc.’s diluted earnings per share were $0.52 in the quarter under review, including the negative impacts from foreign currency fluctuations, West Coast port delays and strategic actions. Excluding the negative impact of about $0.12 from strategic actions, the company’s adjusted diluted earnings per share were $0.64 for the second quarter of fiscal 2016. “I remain confident in our strategies to improve business performance and drive loyalty going forward,” said Art Peck, chief executive officer, Gap Inc. “Our evolving product operating model is laying the foundation to more consistently deliver on-trend product collections across our portfolio,” Peck also informed. The company also reaffirmed its full-year earnings per share guidance to be in the range of $2.75 to $2.80, excluding the impact from strategic actions previously announced on June 15, 2015. In addition, the company distributed about $800 million to shareholders through share repurchases and dividends fiscal year-to-date, reinforcing its commitment to returning excess cash to shareholders.
