Gap Posts Quarterly Results at High End of Projections

By Maria Armental 

Retailer Gap Inc., which got a boost from holiday sales to break a near-two-year sales slump, expects financial results to remain sluggish this year as it continues to invest in digital strategies and works to speed up the time it takes clothes to reach the market.

On Thursday, the San Francisco retailer said it expects to earn $1.95 to $2.05 a share for fiscal year 2017, compared with the $2.02 a share it made the year prior and the $2.07 a share analysts had projected.

Comparable sales, a closely watched metric for retailers, are expected to remain roughly flat or improve slightly with overall sales "expected to be slightly below this range," which Gap attributed to the effect of currency conversions.

Shares, down 12% over the past 12 months, rose 1% to $24.20 in after-hours trading.

Gap booked a $71 million charge against Intermix, the women's fashion boutique chain it bought in 2013 as an entry point into the luxury market.

Over all, fourth-quarter profit rose 3% to $220 million, or 55 cents a share. Excluding the impairment charge and other items, profit fell to 51 cents a share from 57 cents a year earlier.

Meanwhile, sales rose 1% to $4.43 billion.

The results were in line with preliminary figures Gap had released this month.

Gap, which once claimed the title of largest specialty-apparel chain in the world, found itself saddled with too many stores in the wrong locations as shoppers turned online and to so-called off-price and fast-fashion retailers.

Last year, it closed about a quarter of its namesake stores, along with all of its Old Navy stores in Japan and several Banana Republic stores, mostly outside of North America.

During the quarter, the retailer closed 113 stores, ending the period with 3,659 stores.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

February 23, 2017 17:06 ET (22:06 GMT)

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