for the quarter were $0.27. 
   -- During the quarter, the company repurchased 2.9 million shares for $73 
      million and ended the third quarter of fiscal year 2021 with 374 million 
      shares outstanding. 
   -- The company paid a dividend of $0.12 per share during the third quarter 
      of fiscal year 2021. In addition, on November 10, 2021, the company 
      announced that its Board of Directors authorized a fourth quarter 
      dividend of $0.12 per share. 
   -- Third quarter ending inventory was down 1% year-over-year and flat versus 
      2019. The company expects fourth quarter ending inventory to be up high 
      single digits versus last year, although this outlook may change given 
      continued volatility in the supply chain. 
   -- The company ended the third quarter of fiscal year 2021 with $1.1 billion 
      in cash, cash equivalents, and short-term investments. Year-to-date free 
      cash flow, defined as net cash from operating activities less purchases 
      of property and equipment, was $196 million. 
   -- Fiscal year-to-date capital expenditures were $486 million. 
   -- The company ended the third quarter of fiscal year 2021 with 3,459 store 
      locations in over 40 countries, of which 2,873 were company operated. 

Additional information regarding adjusted gross margin, adjusted operating expenses, adjusted operating margin, adjusted effective tax rate, and free cash flow, all of which are non-GAAP financial measures, is provided at the end of this press release along with a reconciliation of these measures from the most directly comparable GAAP financial measures.

2021 Outlook

The company now expects its reported full-year diluted earnings per share to be in the range of $0.45 to $0.60, which includes a $325 million loss on extinguishment of debt and approximately $120 million in net charges primarily related to divestitures and changes to its European operating model. Excluding these charges, adjusted full-year diluted earnings per share are expected to be in the range of $1.25 to $1.40, which contemplates a range of on-time delivery rates for our holiday flows and other supply chain challenges. This guidance includes an estimated $550 to $650 million of lost sales from supply chain constraints on available inventory, as well as approximately $450 million in total air freight expense for the year. The company noted that when adjusting for transitory costs and sales lost from the acute disruption, the business momentum is strong.

Net Sales: The company now expects full-year revenue growth to be about twenty percent versus fiscal year 2020.

Operating Margin: The company now expects its reported operating margin for fiscal year 2021 to be about 4.5%, with adjusted operating margin expected to be about 5%, on track to achieving a 10% operating margin by the end of 2023.

Interest Expense, Net: The company expects full-year net interest expense of $163 million, down $47 million versus prior guidance, which reflects lower interest rates for the third and fourth quarters and a reduction in the company's overall debt balance.

Effective Tax Rate: The company now expects its reported fiscal year 2021 effective tax rate to be about 23%. Excluding the net impact related to divestitures, strategic changes to its European business and loss on extinguishment of debt, the company expects its adjusted fiscal year 2021 effective tax rate to be about 26%.

Capital Expenditures: The company continues to expect capital spending to be approximately $800 million in fiscal year 2021. Consistent with the company's Power Plan 2023 strategy, capital spending is expected to primarily support growth investments including digital, loyalty, and supply chain capacity projects, along with investment in store growth for Old Navy and Athleta.

Real Estate: The company continues to expect to open about 30-40 Old Navy and 20-30 Athleta stores in 2021, as well as close approximately 75 Gap and Banana Republic stores in North America.

"While there is still hard work ahead to navigate near-term challenges in the macro environment, the team has made tremendous progress, adapting quickly while never taking their focus off of our long-term objectives," said Katrina O'Connell, Executive Vice President and Chief Financial Officer, Gap Inc. "We have strong demand for our brands and our fleet rationalization and divestitures are progressing well and adding value. Our operating margin remains on track to hit 10% by 2023, in line with our plan, even as we navigate these near-term disruptions. While our mitigation efforts are driving significant transitory costs, we view these as investments in preserving market share and driving overall health and relevance for our brands."

Webcast and Conference Call Information

Joe Scheeline, Head of Corporate Finance and Investor Relations at Gap Inc., will host a summary of the company's third quarter fiscal year 2021 results during a conference call and webcast from approximately 2:00 p.m. to 3:00 p.m. Pacific Time today. Joe will be joined by Chief Executive Officer Sonia Syngal and Chief Financial Officer Katrina O'Connell.

To access the conference call, please use the "Click to Join" link below to have the conference call you. The link becomes active 15 minutes prior to the scheduled start time.

Click to Join

If you prefer to dial in, you can join by calling 1-855-5000-GPS or 1-855-500-0477 (participant passcode: 4762521). International callers may dial 1-323-794-2078. The webcast can be accessed at investors.gapinc.com.

Non-GAAP Disclosure

This press release includes financial measures that have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP) and are therefore referred to as non-GAAP financial measures. The non-GAAP measures described below are intended to provide investors with additional useful information about the company's financial performance, to enhance the overall understanding of its past performance and future prospects and to allow for greater transparency with respect to important metrics used by management for financial and operating decision-making. The company presents these non-GAAP financial measures to assist investors in seeing its financial performance from management's view and because it believes they provide an additional tool for investors to use in computing the company's core financial performance over multiple periods with other companies in its industry. Additional information regarding the intended use of each non-GAAP measure included in this press release is provided in the tables to this press release.

The non-GAAP measures included in this press release are adjusted gross margin, adjusted operating expenses, adjusted operating income, adjusted effective tax rate, adjusted diluted earnings per share, and free cash flow. These non-GAAP measures exclude the impact of certain items that are set forth in the tables to this press release.

The non-GAAP measures used by the company should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and may not be the same as similarly titled measures used by other companies due to possible differences in method and in items or events being adjusted. The company urges investors to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures included in the tables to this press release below, and not to rely on any single financial measure to evaluate its business. The Non-GAAP financial measures used by the company have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles.

Forward-Looking Statements

This press release and related conference call and webcast contain forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as "expect," "anticipate," "believe," "estimate," "intend," "plan," "project," and similar expressions also identify forward-looking statements. Forward-looking statements include statements regarding the following: sales growth in 2021; lost sales and the adverse earnings impact in 2021 due to supply chain disruptions; reported and adjusted operating margin in 2021; reported and adjusted earnings per share in 2021; the impact of supply chain constraints, including COVID-related factory closures, port congestion and constrained inventory; our efforts to mitigate supply chain disruptions, including increased air freight and port diversification; air freight expense and transitory costs associated with supply chain disruption in 2021 and 2022; on-time delivery rates; our efforts to accelerate capabilities to mitigate logistics challenges and increase speed to market; the scale of our business and supply chain; our relationships with manufacturers and transportation partners; leveraging more multinational vendors; our Power Plan 2023 strategy and our ability to execute against it; our business performance relative to plan; demand for our brands; extending our customer reach; our investments in demand generation; our investments in growth, cost reduction, loyalty, speed and agility; accelerating our digital transformation and benefits associated therewith; our digital, ecommerce, artificial intelligence, inventory management and technology investments and efforts; our investments in supply chain capabilities; the strength of our ecommerce channel; our use of data science and ecommerce tools; inclusive sizing and BODEQUALITY at Old Navy; Athleta's growth strategy and expansion into Canada; AthletaWell and related monetization opportunities; Banana Republic's brand relaunch and enhanced customer experience; restructuring our long-term debt and estimated benefits associated therewith; interest expense in 2021; future share repurchases, including the