Gap posts strong second-quarter results, raises profit forecast; shares jump


(Reuters) – Clothing retailer Gap Inc (GPS.N) reported better-than-expected second-quarter results and raised its full-year profit forecast, helped by strong demand for Old Navy products and fewer discounts, and its shares rose about 5 percent.

The company’s overall same-store sales increased 1 percent in the three months ended July 29, while analysts were expecting sales to be flat year-over-year, according to research firm Consensus Metrix.

This is the third consecutive quarter that Gap’s comparable sales have increased, powered by Old Navy, which sells lower priced apparel.

Same-store sales at Old Navy rose 5 percent, beating analysts’ average estimate of an increase of 3.1 percent.

Same-store sales at Old Navy, Gap’s biggest revenue contributor, has now increased in seven of the past ten quarters, a bright spot for the company as its Gap and Banana Republic chains struggle.

The company’s total revenue fell 1.4 percent to $3.799 billion, just edging past analysts’ estimate of $3.77 billion, according to Thomson Reuters I/B/E/S.

Net income rose to $271 million, or 68 cents per share, from $125 million, or 31 cents per share. The latest quarter included a $64 million gain from insurance proceeds, while the year-ago quarter included $135 million in restructuring costs.

Excluding the insurance-related gains, Gap earned 58 cents per share, easily beating analysts’ estimate of 52 cents.

Gap raised its adjusted profit forecast for fiscal 2017 to $2.02 to $2.10 per share from $1.95 to $2.05 per share.

The company’s shares were up 5.4 percent at $23.90 in trading after the bell on Thursday. They had surged more than 13 percent immediately after Gap issued its earnings report.

Reporting by Gayathree Ganesan in Bengaluru; Editing by Savio D’Souza

Source link

Products You May Like

Articles You May Like

U.S., Syria give conflicting accounts on global chemical weapons…
After Trump drama, new Pence national security aide steps down
UK pottery produces
Hunt faces investigation over luxury flats purchase
Lance Armstrong settles U.S. federal fraud case for $5 million:…

Leave a Reply

Your email address will not be published. Required fields are marked *