Gap's Profit Jumps 25%, Boosts Dividend and Full-Year Guidance
NEW YORK (TheStreet) -- Stepping away from the generally struggling retailers this earnings season, Gap's
Gap said after the markets closed that net income rose 24.7% compared to the year-earlier quarter, to $303 million, or 64 cents a share, meeting Wall Street's earnings estimates.
Sales rose 8% to $3.87 billion, which the company attributed to positive customer response to its merchandise assortments, slightly ahead of analysts' estimates of 7% growth to $3.83 billion, according to Thomson Reuters. On a constant currency basis, net sales rose 10%, it said.
Second quarter comparable sales rose 5% compared to a 4% rise in last year's quarter, driven by strength in its flagship brand and at Old Navy, the company's discount-priced retailer, but somewhat offset by negative comp sales in Banana Republic.
Total online sales rose 27% to $466 million.
The company boosted its annual dividend by 20 cents to 80 cents and raised full-year earnings guidance to a range of $2.57 to $2.65 a share.
Shares of Gap, while closing during the regular trading day down nearly 2%, rose approximately 2% shortly after the results came up but at last check was flat in post-markets trading.
"We delivered strength in both our top and bottom lines this quarter," said Glenn Murphy, Gap's chairman and CEO. "As we move into the second half of the year, we remain focused on growing revenue and driving continued momentum across our portfolio of brands."
The company continues to expand internationally, with particular focus in Asia. During the quarter, Gap opened six stores in mainland China, bringing its total flagship stores to 55. It also announced plans to open its first Old Navy store and launch an Old Navy e-commerce site there in the first half of 2014.
The company also plans to open Gap stores in Taiwan next year and is on pact to open 15 to 20 stores in Japan this year.
Gap's earnings results are in stark contrast to Abercrombie & Fitch
-- Written by Laurie Kulikowski in New York.
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