NEW YORK (AP) - Gap Inc. reported a 9.4 percent increase in third-quarter earnings as the fashion retailer's turnaround continues.
NEW YORK (AP) — Gap Inc. reported a 9.4 percent increase in third-quarter earnings as the fashion retailer's turnaround continues.
The company, which operates Gap, Old Navy and Banana Republic, also reaffirmed its full-year profit guidance and said it's increasing its stock buyback authorization by $1 billion.
The results, announced late Thursday, are among a few bright spots in a third-quarter earnings season that has many retailers including Wal-Mart Stores Inc. and Kohl's Corp. lowering their outlook in an uncertain economy. Teen retailer Abercrombie & Fitch reported earlier Thursday a loss in its third quarter, dragged down in part by charges related to closing its Gilly Hicks stores. The teen retailer's sales softened and it said sales weakness continues in the fourth quarter.
Gap's push into new designer collaborations, brighter fashions and livelier stores have helped invigorate sales since early last year, but the holiday shopping season is expected to fiercely competitive with stores ramping up discounts to grab shoppers.
The San Francisco-based chain posted net income of $337 million, or 72 cents per share in the three-month period ended Nov. 2. That compares with $308 million, or 63 cents per share, last year.
Revenue rose 2.8 percent to $3.98 billion.
Analysts were expecting 71 cents per share on revenue of $3.98 billion, according to FactSet estimates.
Revenue at stores opened at least a year rose 1 percent, compared with a 6 percent increase a year ago. By division, Gap's results were up 1 percent, while Banana Republic's metric was down 1 percent. Old Navy was unchanged from a year ago.
The measure is considered a key indicator of a retailer's health.
A year ago, Gap announced a management overhaul to help it respond more quickly to shifting tastes around the world. The change put the North American, international, online, outlet and franchise divisions under a single global executive for each of the company's brands. The company also formed a new innovation and digital strategy team.
The company said Thursday that it repurchased approximately 20 million shares for about $790 million during the third quarter, completing all but $100 million of its existing share repurchase authorization. The new repurchase authorization follows the company's recent announcement to increase its annual dividend per share to 80 from 60 cents. That represents the second increase this fiscal year.
Shares fell 2 percent, or 86 cents, to $41 in after-market trading Thursday, after closing up 62 cents at $41.86.
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