The Gap tops 4Q expectations with strong holiday sales
SAN FRANCISCO (AP) — Gap Inc.’s fourth-quarter profit declined 7 percent, but the clothing retailer reported strong holiday sales and increased its dividend.
Shares of the San Francisco-based retailer jumped 9 percent in after-hours trading Thursday following the report.
Gap said it earned $205 million, or 52 cents per share, in the quarter that ended Feb. 3. That’s down from $220 million, or 55 cents per share a year earlier
When the results were adjusted for one-time pretax expenses, Gap reported a profit of 61 cents per share. The analysts surveyed by Zacks Investment Research expected earnings of 59 cents per share.
Comparable sales for the company overall grew 5 percent in the fourth quarter, compared with an increase of 2 percent the previous year. Analysts surveyed by FactSet expected comparable sales growth of 1.4 percent.
“Our strong positive comp and margin expansion during the critical holiday quarter affirms our balanced growth strategy,” CEO Art Peck said.
The company’s Old Navy again reported the best sales numbers with 9 percent growth over last year’s 5 percent gain. Gap continues to adjust to changing habits of customer who spend more time shopping online and less at malls.
Gap’s Banana Republic brand reported a 1 percent gain in comparable sales over last year’s 3 percent drop.
Sales at Gap’s namesake stores were flat in the fourth quarter, which matched the previous year. The company is looking for a new CEO for its Gap stores after Jeff Kirwan stepped down last month.
Gap plans to increase its annual dividend 5 percent to 97 cents per share.
The company said it expects to generate 2018 earnings per share between $2.55 and $2.70.
The clothing chain posted revenue of $4.78 billion in the period, also topping Street forecasts. Nine analysts surveyed by Zacks expected $4.68 billion.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on GPS at https://www.zacks.com/ap/GPS