Tags: Gap | profit | outlook | retail

Gap Posts Bigger Quarterly Profit, Raises Outlook

Thursday, 15 Nov 2012 05:21 PM

 

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Brightly colored jeans and dresses helped Gap Inc post a bigger quarterly profit ahead of the holiday season and the company raised its profit view for the year, sending its shares up 3 percent after the bell.

The company, which owns the Gap, Old Navy and Banana Republic chains now expects to earn between $2.20 to $2.25 a share, up from the $1.95 to $2 it forecast in August.

For almost a decade, Gap had struggled with its fashion mix, losing out to rivals such as Zara parent Inditex SA and homegrown competitors such as Forever21, but its main brands have staged a big turnaround in the last year.

Banana Republic's tie-in with television show Mad Men was a big success and moves such as redoing its classic Khakis in bright colors at its namesake brand proved to be a crowd pleaser.

The company said all three brands posted positive comparable sales in North America, with Old Navy rising 9 percent.

For the third quarter, Gap earned $308 million, or 63 cents a share, compared with $193 million, or 38 cents a share, in the same quarter last year.

Sales for the third quarter ended Oct. 27 rose 8 percent to $3.86 billion.

Gap shares were trading up at $34.21 after the bell. They closed at $33.26 Thursday on the New York Stock Exchange.

© 2014 Thomson/Reuters. All rights reserved.

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