and Thanks leadership past on and let months. you me over support for Board and the also four the of our employees Bob, behalf the thank
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without It's difficult business the about talk coronavirus. first acknowledging to
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meaningful against about away migration from from source year. progress China of goods made currently and Over XX% our down China, from XX% the we've our last last year,
operated in However, vendors we should in production of portion note that outside a of supplying mills China China. fabric significant occurs
While mill will early schedule. days, production it largely appears on that much remain of the
not the Additionally, we China disruption in any experience from did at start of closures year. this meaningful factory
network, flow. teams organization and chain that unexpected With coordination potential with delays sourcing transportation any regards you or of minimize occur. fall relates particularly broader our any working to to our We'll our or in holiday China, keep is impacts global and disruptions disruption, as apprised to vendors i.e. global of closely it logistics our supply outside
like logistics, teams just I'd last the the moment a And weeks. several our sourcing, BCP to thank of over take to tireless and efforts
network, along dynamic us today. ability navigate through logistics partnerships supply throughout to and strategic with operations, and the sophisticated confidence our give we're sourcing situation very our facing in our chain fluid Our
represents X% traffic has Turning store been and region to closures a net as demand quarter-to-date result trends. suppression, sales, most meaningfully China, which of our approximately impacted global of reduced
cases reduced cycle. traffic closures but are earlier trends, Our businesses store the in and U.S., have emerging. in with also Japan by been just the and Europe they're impacted And
based impact - the QX some impact impact estimate see which here, reasonably we in reading of to of China, approximately in year, the a be coronavirus on million markets full will $XXX the Europe, starting we in those traffic currently the on we've sales. and we estimate unable while on reduction are to Japan, We're seen of trends the
We provide have not yet with quantified impact an North more for later America. perspective for XXXX. I'll guidance
of performance turn moving quarter brand overview With to for me that, on fourth the by and let to the an XXXX. our results, start getting with I'll the and before specifics into outlook of
below major is XXXX was a challenging performing and what brands their believe with each of potential. our we disappointing year future
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key positive driven women's the the in by of first a strength product Further, expansion fleece outpaced which less comped and such customer time the quarter. that and comps. and delivered throughout margin brand positively response acceptance, sales Importantly, since double-digit indicator active, all average, leading for as of QX XXXX categories traffic, accelerated and delivered inflected
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While performance we fourth enter better disappointing XXXX Old saw and are positioned quarter in XXXX. overall for as improvement the Navy, we was
to inventory much tighter. continue buy We
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Gap, profitability. to as for focus previous we've turning discussed quarters, Now improve the primary to in brand was Gap
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several our leadership appointing brand is provide experience Breitbard across brands. specialty and made product, Mark for including to deep the at We to senior able at changes Mark management oversight leverage task product which of profile his hand, customer business. positioning, to transform the operating is to brand the define the and financial address and and the stabilize this target, restore the model level,
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Banana mixed Republic results. had
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vendors, sourcing focused given stronger partnerships key of developing the organization this which nature product. complex Our technical even is is important, on with
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location, whether store to the result, charge our we quarter. flows, change identifiable that of fourth operating or and independent in strategy in individual stores recorded for store an including impairment for certain stores, of flagship an determined sublease and flagship a cash in fiscal flagship evaluation the exit as level represents lowest the In of we XXXX, light
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sales $X.X fourth down quarter now full X% and results. for were on the up I'll that, quarter summarize year sales Net X%. With briefly billion, comp
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were per reported a full share earnings basis, $X.XX. year On
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XX expanded To gross $X.X a quarter provide gross basis margin fourth points. totaled perspective gross XX.X%. On billion and and reported basis, to XX profit basis margin margin more basis, adjusted on gross an on a SG&A, increased bit points
at Old sales about Merch excluding versus and Athleta, and a last Rent partially by expansion XX offset occupancy impact basis restructuring, flat percent points excluding Navy by the restructuring. leveraged and and basis year as XX margin was remaining points brands. margin basis of expanded reported XX deleverage the of as driven at points
$X.X XX For gross down year, gross to basis the reported profit XX.X%. points full was billion and margin was
impact primarily as restructuring. down Old Excluding flat activity margin and XX the as the points. points excluding occupancy XX XX Navy. excluding was points impact points XX of basis promotional of was restructuring, Rent higher was and and the for at basis gross restructuring, basis margin deleveraged by about Merch year reported driven basis down reported
work, execute against down. to continue point fleet continues our come rent we occupancy and As to restructuring our leverage
we Looking comp. to digit rent negative and to expect be a to able low-single leverage XXXX, on occupancy
On and billion and fourth operating year reported expenses $X.X respectively. a basis, quarter were total billion full $X.X
we As specialty On operating basis, fleet we've an accrual and points to XXX costs charges, expected as basis bonus separation-related in related quarter restructuring noted, and XXXX. SG&A and flagship we costs. deleveraged deleverage expenses fourth impairment the year in marketing last technology lapped fourth investments quarter reversals increased excluding the expenses when adjusted of to
year reversed - bonus portion accounted sits of results. of points a earnings our the that this HQ for The to from note, shown Slide For accrual of the on Of of basis other X reversal employees lapping the respective sits within last related remainder perspective, bucket, slide. deleverage. the XXX with within brand
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rate was Moving to XX.X% taxes and interest, the fourth for quarter. effective tax the
tax tax adjustments compensation, the about impairment rate was Excluding and mix charges, points of jurisdictional earnings. adjusted executive non-deductible impacts timing primarily and The was quarterly foreign in rate and X due tax lower. restructuring to tax credits, our non-cash of related adjusted lower to utilization
year, the rate tax was effective the For XX.X%.
tax for XX%. of our closer tax restructuring rate expected X reform year Excluding impairment charges, to our about non-cash XXXX impacts lower, rate run and was tax current guidance to adjusted points related or liability to certain our tax adjustments fiscal
on Providing we compared X% some last quarter year. to up the with perspective inventory, inventory ended
closures Excluding the down acquisition, was about of in line openings Janie and Jack tariffs, the X%, store of store inventory impact and guidance. net previous with
turn inventory in productivity we particularly light continue presented to XXXX, organization, uncertainty by of coronavirus. priority a to the top As will for be the
improving better with discussed opportunity given on traffic last is capabilities particularly we're to you we As inventory trends, quarter, core progress buys, while the to challenging more there making conservative more leverage process based our return assortments, eliminate waste localizing allocations in margin, to our and on profile. improve and our and yield, working on demand capital inventory channel ultimately increasing buying gross
now expenditures. and to capital count Moving store
previously mentioned be our as may continue liked. with discussions which closures as our I last ability landlords decisively announced our program, our Regarding execute and around hinder quarter, would strategy quickly restructuring have as we to difficult, on to
majority XXX the said, about are be continue flagship program the still includes $XXX of stores expect costs $XXX That about to million, to we XXXX, which by close total with of be to million the the costs and expenditures. end we expected of estimated specialty targeting cash to locations, four buyout to
During stores the Gap brand globally. year, closed we XXX
program, closures previously expenditures. $XXX For In to close about the with to majority to our stores of $XX XXXX, North we $XXX about XXXX. about XX million incurred expect America million $X.XX the to estimate of or specific we globally and costs costs share in specialty per announced closures, cash about expected be primarily restructuring restructuring XXX Gap million
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of previous separation-related Fiscal XXXX million, reduced by below $XXX primarily were capital million, spend. our driven capital expenditures guidance $XXX
million spin related to a QX, previous with the about planned guidance; center, which distribution of off the separation technology of of headquarters million out in decision breaking guidance; capital, investment, related our build million our and of one base was of $XX half Just given buildings and components line previous logistics, costs to as cost $XX the in our separation primarily stop capital Old expansion $XXX of of written of down to the spend: below Navy. Ohio and
despite returned million the flow, year. a compared cash million and fiscal share year XXXX free with dividend flow and repurchases We cash equivalents million the quarter $XXX And year, during in $XXX sheet $XXX through between year. million count share our our of and We well balance shares. challenging the last cash desired and paid of $X.X Regarding ending billion million cash, short-term was $XXX above XXX with was billion. billion $X cash $X.X ended historical investments, cushion
at tricky. turning for outlook our is stage guidance providing to Now, bit a XXXX, this
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the estimate we For and better Europe quarter, have have we included a only China, in the first expected the our where basis impact. impact businesses Japan to
does not meaningful potential from any impacts. chain from potential disruption deterioration other regions, outbreak, in the from including Our outlook evolving impacts unknown further the possible incorporate supply or coronavirus spread trends current
$X.XX. reported range on to per $X.XX basis, in of expect that, Given be to a we earnings share the
costs restructuring businesses. related Excluding range estimated QX in Gap and per China, be $X.XX $X.XX, our about detriment earnings of European with share to expect coronavirus Japan which plans, associated of impact in $X.XX a includes our we the of to the fleet to
around assumptions me the range. some color Now, you guidance embedded this within provide with let
Gap for fiscal about weighted lower tax about of I from XXXX XXXX ranges of tariffs result the expense detriment a We comps positive half; charge and digits. reported BR, effective down flagship of sales first benefit $X.XX brand; at $X.XX about Navy, XX%. the net about; toward XXXX a for by as impairment depreciation are a rate the a that talked will impact negative sales comps expect Athleta be low-single expected These both Old these at but comp and offset embed and
fiscal expect year about expected XX%. we Excluding impacts tax related XXXX rate the non-cash to to tax effective the restructuring be charges, adjusted
be Gap we disciplined Regarding performance at the coronavirus, we'll focused can and expense on of including to potential light SG&A, disappointing any management. in further control, levers related disruption
anticipated path seeking bonus we're to spending to and will and are in culture, the that talent our aligning forward. reflect while incent attract our look employee shareholder to that fuel we better excluding plan hold us performance XXXX, enabling interest, reinvestments to flat As motivated
we bonus minimal lap payout we deleverage year, expect As reset our to this next expenses year. and payout the
our committed the environment retail challenging are actions cash and the further taking we uncertainty disappointing it reliable economic strong, to and performance, in Despite coronavirus. own ahead, light the and the necessary sheet and generation to market balance our strengthen given volatility remain of
Over nearly flow cash million generated the last years, we've flow. line three $X.X $XXX average $XXX million of top annual and an grown free by cash billion in and operating in
time, us Athleta, that Over increased brand. and we've generation share the dividend transforming while billion simultaneously sheet to to cash address and of to $X strong allow and Company's the through invest Navy over balance the the potential performance of actions our unleash growth the in Reliable same Old taking repurchases in our operations necessary dividends. distributed and cash Gap
from number which business adequately our our first intend the As conditions. an balance we intend factors refinance proactively second, provides coronavirus repurchases and growth; to of maturity XXXX market to foremost, will in X.X% responsibly suspend repurchases, invest the With the to remain to priorities our look including uncertainty stemming consistent: of economic philosophies regards XXXX. We dividend, and allocation sheet current share outbreak, to in subject share light manage to bond we largely in XXXX, and but our currently for maintaining opportunistically a capital yield.
about capital desire as center, spending costs priorities conservation, in XXXX million, focused of ROIC in we million related $XX includes a $X.X XXXX. our of which cushion billion. In billion about which cash for began improved are to $XXX of expansion to desired to as and of our portfolio Ohio reducing well build-out distribution about with cash comfortable $X light remain more We
to be Investment on including brands and the expected profitable growth brands Athleta, growth leverage distorted focus the on profitable in at to portfolio. all stores. scale supply chain provide and focused Investments and will Navy that to initiatives be in Old priorities are will opportunities technology new
it Company, and best challenges challenges positive retail to that are events time. last this confident for and and very discipline and talented lead her The the on and close to this the I'm have sidelines a team be as Her catalyst, years skills Company challenging foundational serve been our ahead. work period the years to cheering the a more experiences very Sonia ahead. leadership looks come from several out, fruition bring like So are in the that of has can the ahead. to accountability And during up task. the undertaken operating for for the right for organization supports we focus and this I'll her the
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