Gap backs FY17 EPS view $1.95-$2.05, consensus $1.99
The company updated its diluted earnings per share guidance for the first half of fiscal year 2017 to be down mid-single digits when compared with the adjusted diluted earnings per share for the first half of fiscal year 2016, an improvement from the company's previous guidance of down high-single digits. The company noted that foreign currency fluctuations negatively impacted earnings per share for the first quarter of fiscal year 2017 by an estimated $0.03, or about 9 percentage points of earnings per share growth. The company continues to expect comparable sales for fiscal year 2017 to be flat to up slightly. Net sales for fiscal year 2017 are expected to be slightly below this range driven by an expected negative impact from foreign currency fluctuations year-over-year. Consensus for FY17 revenue is $15.58B. The effective tax rate was 39.9 percent for the first quarter of fiscal year 2017. The first quarter tax rate was negatively impacted by the adoption of a new accounting standard related to share-based compensation which requires all excess tax benefits and deficiencies to be recognized as a component of the income tax provision. The company continues to expect its fiscal year 2017 effective tax rate to be about 39 percent, including the impact of the new accounting standard related to share-based compensation.