Bloomberg News

Gap’s Third-Quarter Profit Declines 36% as Old Navy Sales Drop

November 18, 2011

Nov. 17 (Bloomberg) -- Gap Inc., the largest U.S. apparel chain, said third-quarter profit declined 36 percent as sales dropped at its namesake and Old Navy chains.

Net income fell to $193 million, or 38 cents a share, from $303 million, or 48 cents, a year earlier, the San Francisco- based company said today in a statement. Analysts projected 37 cents, the average of 24 estimates compiled by Bloomberg.

Chief Executive Officer Glenn Murphy said the company is “intensely focused” on improving sales through changes to merchandise assortments and marketing plans. Third-quarter comparable sales declined 6 percent at Gap North America and 4 percent at Old Navy.

The company announced earlier this month that it plans to open about 1,000 stores on Thanksgiving Day to lure shoppers. Locations that will be open include about 800 Old Navy stores and 116 Gap stores.

Companywide comparable sales, which include online revenue, declined 5 percent compared with an increase of 1 percent a year earlier, Gap said. Total revenue fell 1.9 percent to $3.59 billion.

Gap repeated its forecast for 2011 per-share profit of $1.40 to $1.50. The average estimate of 27 analysts was $1.50.

--Editors: Kevin Orland, Robin Ajello

To contact the reporter on this story: Ashley Lutz in New York at alutz8@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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