Gap Sees Better-Than-Expected Profit for Holiday Quarter

By Maria Armental 

Gap. Inc. expects to top profit targets for the year, following stronger-than-expected sales during the holiday quarter.

Shares, down 3% over the past 12 months, rose 3% to $23.69 in after-hours trading.

Over all, the company said sales rose 1% to $4.43 billion in the fourth quarter, breaking a string of declines and beating analysts' projections of $4.4 billion despite a challenging backdrop for retailers.

Meanwhile, sales at stores open for at least a year improved 2%, as Old Navy and Gap sales offset a 3% decline at Banana Republic.

The San Francisco retailer has been trying to rebuild its brands and recapture market share from online competitors and so-called off-price and fast-fashion retailers under the direction of Chief Executive Art Peck, a decade-plus Gap veteran who took over the top executive role in 2015.

On Monday, the retailer, which is slated to report results on Feb. 23, said it expects to make 54 cents to 55 cents a share in the fourth quarter, or 50 cents to 51 cents a share on an adjusted basis, easily topping analysts' projected 43 cents a share, or 45 cents on an adjusted basis.

For the recently ended business year, it expects to make $1.68 to $1.69 a share, or $2.01 to $2.02 on an adjusted basis, compared with its earlier view of $1.41 to $1.50 a share, or $1.87 to $1.92 on an adjusted basis.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

February 06, 2017 17:27 ET (22:27 GMT)

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