If your long on GPS you serve the only real shareholders that matter- the Fisher family. No cash is reinvested in the brand to expand shareholder value. Cash used to buy stock back so Fishers can continue to use the stock as an limitless ATM. If you're not a Fisher, you shouldn't be holding this stock, period.
Look at the insider transactions and the stock buy back history. Cash could have been used for so many other worthy causes to enhance shareholder value but nope they keep buying shares back so they can option it out to the Fishers. Should be illegal but buyer needs to beware.
Let me preface this by saying that I am not, nor have I ever been, an employee of this company.
Having said that, since the Fisher's started The Gap and are currently majority owners, they have every right to benefit from its dividends. If you'll notice the amount of shares over the last several years, there has been a definite decrease in the number outstanding. Yes, the Fisher's constantly maintain a certain percentage (about a third) through their accummulation from dividends and their respective sales, but I assume that the company feels that when the price hovers at a low, this is the best use of SOME of their free cash flow.
This appears to be a conservative company with respect to its use of cash. They have trimmed inventory, continually evaluate the performance of stores (closing those that underperform), and are expanding internationally. Of course, you can only become so efficient. It's getting more foot traffic, and apparel that is appealing to the various demographics, that I'm sure they are working hard on. (You do realize this is a highly competive and fickle market, don't you?)
Anyway, I guess you feel it's worth your time poor-mouthing this company and/or shorting this stock. Whatever. It's your two cents.
Of course dividends benefit all - I'm talking about the $8+B used to purchase stock at and avg cost of $22 dollars a share - purchased from Fishers. Yet Fisher % owership doesn't change! its a simple transfer of cash from the balance sheet to the Fisher family. Connect the dots man. Check out the Ks for the last 3 years. $4B in buybacks north of 21 - How about using that cash to reinvest in their brand instead of supporting stock sales to the Fishers! Nope. GPS board feels they just need rest on their laurels and do some cost cutting. Look they hired that CEO so he can cost cut this dying franchise so they can keep this charade going longer. Not bad-mouthing, but I'm pointing this out so folks know where to put their chips. If I saw one significant initiative to enhance shareholder value FOR ALL THE SHAREHOLDERS I would be their biggest fan. Until then, I'm their foe.