The Gap Cleans Up With Q3 Earnings

When Gap Inc. (NYSE: GPS) reported its fiscal third-quarter financial results after the markets closed on Thursday, the retailer said that it had $0.53 in earnings per share (EPS) and $4.0 billion in revenue. The consensus estimates had called for $0.51 in EPS and $3.97 billion in revenue, and it the same period of last year, Gap said it had $0.68 in EPS and $4.09 billion in revenue.

During the latest quarter, the company’s comparable sales were down 4%, versus flat last year. Comparable sales by global brand for the third quarter were as follows: Old Navy was negative 4%, Gap Global was negative 7%, and Banana Republic Global was negative 3%.

The company ended the third quarter with 3,938 store locations, of which 3,396 were company-operated.

Looking ahead to the fiscal full year, the company expects to see EPS in the range of $1.70 to $1.75 and net sales growth “to be down low-single digits.” Comparable sales are also expected to be down mid-single digits. Consensus estimates are calling for $1.74 in EPS and $16.17 billion in revenues for the year.

Robert J. Fisher, Gap interim president and CEO, commented:

We are not pleased with the third quarter results and are focused on aggressively addressing the operational issues that are hindering the performance of our brands. We continue to make progress against our separation plans, which will provide improved focus and a further catalyst for transformation.

Shares of Gap traded up about 3% on Friday, at $16.69 in a 52-week range of $15.11 to $31.39. The consensus price target is $16.80.