OPERATIONS

Old Navy President Steps Down

BY CSA STAFF

San Francisco Gap Inc. has parted ways with an executive who spent the past 16 months trying to engineer a turnaround at the company’s struggling Old Navy chain. Dawn Robertson stepped down as Old Navy’s president by “mutual decision,” the company said Tuesday.

Tom Wyatt, who runs Gap’s outlet division, will be Old Navy’s acting president until a permanent replacement is found.

Robertson was hired in October 2006 by Paul Pressler, who stepped down as Gap’s CEO just a few months later.

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Best Buy cuts ’08 EPS outlook, shares fall

BY CSA STAFF

MINNEAPOLIS Best Buy cut its fiscal 2008 earnings outlook, citing lower-than-expected revenue growth in fiscal January coupled with its near-term outlook. The company said it now expects its fiscal 2008 earnings per diluted share to be $3.05 to $3.10 for the fiscal year which concludes on March 1. The company’s previous guidance called for earnings per share to be between $3.10 and $3.10. The company reported EPS of $2.79 for the prior year.

Our December revenue results were in line with our expectations. Soft domestic customer traffic in January, coupled with our near-term outlook, now indicate that our fourth-quarter revenue will fall short of our planned targets, said Brad Anderson, vice chairman and ceo of Best Buy.

The company said it now expects comparable-store sales to decline modestly for the fiscal fourth quarter. As a result, the company is projecting nearly $40 billion in revenue for fiscal 2008, including an annual comparable store sales gain of 2.5% to 3%, compared with previous guidance of approximately 4%.

Best Buy reported that it expects to see lower fourth quarter revenue in the home theater, MP3 devices, digital imaging and video gaming categories, compared with its prior expectations. These volume reductions are expected to be partially offset by higher-than-expected volumes from notebook computers, which are benefiting from an expanded assortment and continued customer interest in mobile computing.

The macro-economic environment grew more challenging after the holidays, said Jim Muehlbauer, enterprise interim cfo. Our post-holiday results are not going to be what we originally expected. Yet our strategic results are favorable; our most recent data shows that customer satisfaction improved, and we built market share in key categories such as home theater, computing and gaming. 

Shares of Best Buy fell this morning to $44 from its previous close of $45, following the announcement of the lowered earnings forecast.

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A&F says 4Q net income up 9%

BY CSA STAFF

NEW ALBANY, Ohio Abercrombie & Fitch today reported unaudited net income of $216.8 million, and net income per diluted share of $2.40, for its fourth quarter ended Feb. 2. A&F said this represented a 9% increase over net income of $198.2 million and a 12% increase over net income per diluted share of $2.14 for the same period last year.

For the fiscal year, A&F reported a 13% increase over net income of $422.2 million and net income per diluted share of $4.59 for the same period last year.

Net sales for the quarter were $1.23 billion, an 8% increase over net sales of $1.13 billion last year. Fourth quarter comparable-store sales fell 1%.

For the full year the company reported a net sales increase of 13% to $3.750 billion from $3.318 billion for the fifty-three week fiscal year ended Feb. 3, 2007. Fiscal 2007 comparable-store sales decreased 1%.

“Our brands represent highly productive, consistent businesses that are the result of an unyielding focus on merchandise quality and customer experience. We continue to make strategic investments in the business to sustain and to enhance brand quality and to support future growth, both domestically and internationally,” said Mike Jeffries, ceo and chairman of the board of Abercrombie & Fitch.

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