On March 1, Gap (NYSE:GPS) released fourth-quarter earnings for the period ended Feb. 3.

  • Total sales grew just more than 2% for the quarter, while earnings per share declined 31% during the same period.
  • Gap announced that Bob Fisher will act as interim president and CEO and Marka Hansen as the new president of Gap Brand.
  • The company announced it will close its Forth & Towne concept by the end of June 2007.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$4,930.0

$4,821.0

2.3%

Net Profit

$219.0

$337.0

(35.0%)

EPS

$0.27

$0.39

(30.8%)

Diluted Shares

817.6

870.5

(6.1%)



Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin**

32.5%

34.0%

(1.5)

Operating Margin

7.1%

10.6%

(3.5%)

Net Margin

4.4%

7.0%

(2.6)

*Expressed in percentage points.
**Cost of goods sold includes occupancy expenses.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest. *

$2,644.0

$3,042.0

(13.1%)

Inventory

$1,796.0

$1,696.0

5.9%

*Short-term investments include restricted cash.

Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$1,109.0

$1,132.0

(2.0%)

Long-Term Debt

$188.0

$513.0

(63.4%)



Learn the ways of the balance sheet.

Cash Flow Highlights

2006

2005

Change

Cash From Ops.

$1,250.0

$1,551.0

(19.4%)

Capital Expenditures

$572.0

$600.0

(4.7%)

Free Cash Flow

$678.0

$951.0

(28.7%)



Find out why Fools always follow the money.

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