http://www.morningstar.com/earnings/49149932-gap-inc-gps-q4-2012.aspx

Gap Inc GPS
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/28/2013

Operator: Good afternoon, ladies and gentlemen. My name is Melanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Gap Inc. Fourth Quarter 2012 Conference Call. All participants are in a listen-only mode. As a reminder, please limit your questions to one per participant.

I would now like to introduce your host, Katrina O'Connell, Vice President of Investor Relations.

Katrina O'Connell - VP of Corporate Finance and IR: Good afternoon, everyone. Welcome to Gap Inc.'s fourth quarter 2012 earnings conference call. For those of you participating in the webcast, please turn to Slides 2 and 3.

I'd like to remind you that the information made available on this webcast and conference call contains forward-looking statements. For information on factors that could cause our actual results to differ materially from the forward-looking statements as well as reconciliations of measures we are required to reconcile to GAAP financial measures, please refer to today's press release as well as our most recent Annual Report on Form 10-K and our most recent quarterly report on Form 10-Q, all of which are available on gapinc.com. These forward-looking statements are based on information as of February 28, 2013, and we assume no obligation to publicly update or revise our forward-looking statements.

Joining us on the call today are Chairman and CEO, Glenn Murphy and Executive Vice President and CFO, Sabrina Simmons.

Now, I'd like to turn the call over to Glenn.

Glenn K. Murphy - Chairman and CEO: Thank you, Katrina, and welcome everybody to the Company's fourth quarter earnings call. I want to talk a little bit about the fourth quarter and give you some color around it. I think it's important when you end a fiscal year for you to hear what I think were the accomplishments for Gap Inc. in 2012. So, in the fourth quarter, we were pleased with our sales; a five comp, 10% total sales; yes, the 53rd week was in that, but at the end of the day, when you back that out, we had a market share gaining quarter and that's what's important to me not only for us to have good execution, to gain customers, but the products in front of customers that is right for each one of our brands, but to go and actually gain market share.

One of the areas that's worth highlighting is our online business was up 28% and that was a very good performance by, as everybody knows, a critical part of the Company's long-term growth strategy. We had $0.73 in earnings per share and that was a 66% increase over the year before. So, on the surface, those are very good-looking numbers for Gap Inc. With that said, we believe there's a lot more business to be had for us in December. When I look at the business and dissect it and spent time with the teams after the holidays, we still have quite a bit of opportunity available to us and value to unlock between Thanksgiving and Christmas.

Now the consumer patterns are really shifting and there's big amount of business being done around Thanksgiving and Black Friday and a lot of business being done the last three days before Christmas. We got to figure out the three weeks in between.

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