Gap Posts Stronger Earnings (GPS)

Clothing retailer Gap Inc. (NYSE:GAP) posted stronger-than-expected earnings and sales in its fiscal second quarter as the demand for its products continued to climb from its established North American stores.

For the quarter, the company reported that net income stood at $243 million, or 49 cents a share, compared $189 million, or 35 cents, in the year earlier quarter. Analysts polled by Thomson Reuters had forecasted earnings at 48 cents a share.

The company said that revenue climbed 6% to $3.58 billion from $3.39 billion a year ago, beating Street’s estimations of $3.53 billion.

Same-store-sales in the international markets, excluding Canada, fell by 4% for the quarter. However in North America, same-store-sales for both Gap and Banana Republic Brand climbed 7% even as comparable sales for Old Navy rose by 3%.

Net sales in the international markets increased by 7% as the retailer continued expanding in Asia. In the fiscal second quarter, the company opened its first Old Navy store in Tokyo, while Gap continued to widen its reach in China.

Net sales from franchise business also rose 25% compared to corresponding period of last year.

Buoyed by strong performance, the company expects full-year earnings in the range of $1.95- $2 a share, up from earlier year’s $1.56 a share.

 

 

 

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