Gap revenue rises; transcript leaks early
NEW YORK (AP) — Gap Inc. said Thursday a key revenue measure rose more than expected in February, helped by sales of jeans and woven tops at its Gap and Old Navy stores.
Gap had been scheduled to release the sales figures after the market closed, but put them out at midday after a transcript of its recorded sales call appeared on the website seekingalpha.com, leading to a brief halt in trading of the retailer's stock.
Gap spokeswoman Edie Kissko said Gap is transitioning to releasing its monthly sales figures after the market closes each month rather than before the market opens, and one of its vendors made an error posting the transcript because of that transition.
The retailer's revenue in stores open at least a year rose 3 percent for the four weeks ended Feb. 25. Analysts expected a 2 percent increase, according to Thomson Reuters. The measure is a key gauge of a retailer's performance because it excludes results from stores that open or close during the year.
The measure rose 2 percent at Gap. The strongest sellers were jeans and women tops, and a President's Day sale helped results.
The measure rose 6 percent at Old Navy, helped by sales of women's clothing, jeans and woven tops.
It fell 5 percent at Banana Republic. Gap said customers thought the February merchandise was too spring-like for the month.
Total revenue rose 11 percent to $966 million for the four weeks ended Feb. 25, boosted by a calendar shift.
Stifel Nicolaus analyst Richard Jaffe said he expects Gap's results to continue to improve in the spring as costs decline.
"We also believe that Gap and Old Navy divisions are benefiting from a strong fashion tailwind — merchandise in a strong color palette," he said in a note to investors. He rates the company "Buy."
The San Francisco company did not give an outlook for the future, but in a prerecorded call Katrina O'Connell, vice president of investor relations, said an earlier Easter might hurt March sales this year, because Easter Sunday falls on March 31 and is a weak shopping day.
Shares of Gap rose $1.41, or 4.1 percent, to close at $35.87 Thursday, closer to the high end of the stock's 52-week trading range of $24.54 to $37.85.