Gap Stores Inc. (NYSE: GPS) reported third-quarter 2014 results after markets closed Thursday. The clothing retailer reported diluted earnings per share (EPS) of $0.80 on revenues of $3.97 billion. In the same period a year ago, the company reported EPS of $0.72 on revenues of $3.98 billion. Third-quarter results also compare to the Thomson Reuters consensus estimate for EPS of $0.79 on $4.04 billion in revenues.

Third-quarter EPS includes a one-time tax benefit of $0.06 per share. Excluding the benefit, third-quarter EPS came in at $0.74.

Same-store sales fell 2% in the third quarter, compared with a rise of 1% in the same period a year ago. By global division, Gap same-store sales were down 5%, compared with a gain of 1% in the third quarter a year ago; Banana Republic same-store sales were flat compared with a drop of 1% a year ago; and Old Navy comparable-store sales rose 1% this year and were flat last year.

Online sales rose about 5.4% from $589 million in the year-ago quarter to $621 million.

At the end of the second quarter Gap forecast fiscal year 2014 EPS at $2.95 to $3.00. It has now lowered that estimate to a range of $2.73 to $2.78. Investors will punish the stock for that in the after-hours market.

Gap has managed to beat estimates by a penny or two in each of the past four quarters. That should have been a tip-off that all was not well. Operating margin was lower in the third quarter and is now forecast to be lower for the full-year. Gap also expects to cut capex by $50 million for the year.

Shares traded down about 5% in the after-hours market, at $38.10 in a 52-week range of $35.46 to $46.85. The consensus target price for the shares was $42.30 before the report.

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