Banana Republic 2007 Annual Report Download - page 43

13 Weeks Ended
April 29, 2006
13 Weeks Ended
July 29, 2006 (c)
13 Weeks Ended
October 28, 2006
14 Weeks Ended
February 3, 2007 (d)
53 Weeks Ended
February 3, 2007
Fiscal 2006
Net sales ................... $3,439 $3,714 $3,851 $4,919 $15,923
Gross profit ................. $1,385 $1,225 $1,442 $1,605 $ 5,657
Earnings from continuing
operations, net of income
taxes . . . . . . . . . . . . . . . . . . . . $ 248 $ 134 $ 197 $ 230 $ 809
Loss from discontinued
operation, net of income tax
benefit . . . . . . . . . . . . . . . . . . . $ (6) $ (6) $ (8) $ (11) $ (31)
Net earnings . . . . . . . . . . . . . . . . $ 242 $ 128 $ 189 $ 219 $ 778
Basic earnings per share (a):
Earnings from continuing
operations, net of income
taxes .................... $ 0.29 $ 0.16 $ 0.24 $ 0.28 $ 0.97
Loss from discontinued
operation, net of income tax
benefit ................... $(0.01) $ (0.01) $ (0.01) $ (0.01) $ (0.03)
Net earnings per share ........ $ 0.28 $ 0.15 $ 0.23 $ 0.27 $ 0.94
Diluted earnings per share:
Earnings from continuing
operations, net of income
taxes .................... $ 0.29 $ 0.16 $ 0.24 $ 0.28 $ 0.97
Loss from discontinued
operation, net of income tax
benefit ................... $(0.01) $ (0.01) $ (0.01) $ (0.01) $ (0.04)
Net earnings per share ........ $ 0.28 $ 0.15 $ 0.23 $ 0.27 $ 0.93
(a) Earnings per share were computed individually for each of the periods presented; therefore, the sum of the
earnings per share amounts for the quarters may not equal the total for the year.
(b) During the second quarter of fiscal 2007, we recognized $20 million of expenses, the majority of which was
severance payments, as a result of our cost reduction initiatives.
(c) During the second quarter of fiscal 2006, we recognized $31 million relating to the change in our estimate of
the elapsed time for recording income associated with unredeemed gift cards.
(d) During the fourth quarter of fiscal 2006, we recorded a charge of $22 million in impairment of long-lived
assets.
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of management, including the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this
Annual Report on Form 10-K. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures are effective.
68฀฀฀Form฀10-K
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining an adequate system of internal control over
financial reporting, as defined in Exchange Act Rule 13a-15(f). Management conducted an assessment of our
internal control over financial reporting based on the framework established by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control — Integrated Framework. Based on the
assessment, management concluded that, as of February 2, 2008, our internal control over financial reporting is
effective. The Company’s internal control over financial reporting as of February 2, 2008, has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is
included herein.
Changes in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting that occurred during the
Company’s fourth quarter of fiscal 2007 that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Item 9B. Other Information
Not applicable.
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