Tags: Gap | profit | estimates | sales

Gap Profit Tops Analysts’ Estimates on North American Sales

Thursday, 28 Feb 2013 04:40 PM

Gap Inc., the biggest U.S. specialty-apparel retailer, posted fourth-quarter profit that topped analysts’ estimates as improved merchandise in North America propelled its best holiday shopping season in six years.

Net income for the quarter ended Feb. 2 rose 61 percent to $351 million, or 73 cents per share, from $218 million, or 44 cents, a year earlier, the San Francisco-based company said Thursday in a statement. Analysts on average projected 71 cents, according to data compiled by Bloomberg. The company forecast 70 cents to 71 cents on Feb. 7.

Chief Executive Officer Glenn Murphy is working to maintain last year’s turnaround at Gap’s namesake, Old Navy and Banana Republic brands in North America, which drove the biggest rally for an apparel company in the Standard & Poor’s 500 Retailing Index in 2012. Improved merchandise and marketing, led by new hires, resulted in a 5 percent gain in annual same-store sales, reversing a 4 percent decline a year earlier.

“There have been a lot of structural changes and new hires, which we view positively, and the product remains consistently strong at all brands,” Randal Konik, an analyst at Jefferies Group Inc. in New York, wrote in a note before results were announced. Konik, who has a buy rating on the shares, said the firm’s “bullish” call depends on Gap continuing to boost comparable-store sales this spring.

Gap also projected profit for the year in a range of $2.52 to $2.60 a share, an 8 percent to 12 percent increase. Analysts on average estimate $2.30 a share.

Fourth-quarter sales rose 11 percent to $4.73 billion, the highest since the quarter ended in February 2007, while revenue for the year increased 7.6 percent to $15.7 billion.

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Gap Inc., the biggest U.S. specialty-apparel retailer, posted fourth-quarter profit that topped analysts' estimates as improved merchandise in North America propelled its best holiday shopping season in six years.
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2013-40-28
Thursday, 28 Feb 2013 04:40 PM
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