Gap's shares up on rosy 4Q outlook
NEW YORK (AP) — Gap Inc. issued a fourth-quarter profit forecast that topped analyst expectations Thursday, as the clothing chain continues its rebound.
The San Francisco-based clothing chain, whose stores include Gap, Banana Republic and Old Navy, also said a widely watched sales metric rose 1 percent for January. Analysts had expected a drop of 1.3 percent, according to Thomson Reuters.
"We're pleased to deliver a strong finish to the year, with another month and quarter of comp sales growth," Chairman and CEO Glenn Murphy said in a statement.
Gap's January is one of the few bright spots in otherwise weak batch of monthly reports from several stores like Cato Corp. and The Buckle Inc. that saw declines in sales at stores open at least a year. The metric is considered a key indicator of a retailer's health.
By division, Gap's namesake stores posted a 1 percent increase in January in revenue at stores open at least a year, while Banana Republic saw that metric fall 10 percent. Old Navy had a 4 percent increase in the measure.
Gap said net sales for the four weeks that ended Feb. 1 were $899 million, compared with net sales of $1.13 billion for the five-week period ended Feb. 2, 2013. For the fourth quarter, net sales were $4.58 billion, compared with $4.73 billion a year earlier.
This year's January and fourth quarter, as measured by the calendar retailers use, had one less week than last year's.
Gap said it expects earnings per share in the range of 65 cents to 66 cents for the fourth quarter. Analysts had expected 60 cents per share, according to FactSet estimates.
Gap's shares rose more than 4 percent, or $1.78 to $41.49 in after-hours trading Thursday when the chain released the news. In regular trading, shares rose nearly 4 percent, or $1.43, to $39.71.