Shares of leading apparel retailer for men, women, children
The Gap Inc.
), soared 2.3% in the afterhours trading session yesterday as the
company sweetened its profit outlook following an encouraging
holiday sales season.
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Though the company reaffirmed its fiscal 2013 earnings per share
guidance of $2.57 to $2.65 per share, it now expects earnings per
share for the year to come in at the higher end of its guidance
driven by the encouraging holiday sales results.
Yesterday, Gap reported impressive comparable-store sales (comps)
and sales numbers for the holiday sales season, comprising the
months of November and December (nine-weeks ended Jan 4, 2014).
Comps increased 1% for the holiday season this year compared to
last year. Comps figures for the prior year included an
additional 53rd week. As a result, this year's holiday comps are
compared to the nine-week period ended Jan 5, 2013
Net sales for the nine-weeks ended Jan 4, 2014 came at $3.68
billion, up 2% from $3.59 billion during the nine-weeks ended Dec
The company's holiday season sales mainly benefited from improved
sales in November, characterized by strong promotions and trendy
merchandise sold that boosted sales over the Thanksgiving and
Black Friday weekend. This was partly offset by soft sales over
the year-end holiday period.
In Nov 2013, Gap posted an increase of 2% in comps compared to
last year, while it registered 8% growth in net sales that came
in at $1.63 billion.
However, the company posted flat comps for Dec 2013 compared with
a 5% increase for the 5 weeks ended Jan 5, 2013. Brand-wise, the
company registered improved comps performance at Gap, while comps
remained flat at Banana Republic and were negative at Old Navy.
Comps at Gap Global rose 1% compared with flat results in the
prior-year period. Banana Republic Global's comps remained flat
compared with a 1% rise registered last year. However, comps at
Old Navy Global were down 2%, as against a 13% rise recorded last
Net sales for the 5-weeks ended Jan 4, 2014 came in at $2.05
billion, down 1.4% from $2.08 billion during the 5-weeks ended
Dec 29, 2013.
Most retailers reported lackluster results for the holiday
shopping period this year, followed by lowered forecasts, as
retailers suffered from lower traffic, an intensified promotional
environment, lesser shopping days between Thanksgiving and
Christmas, numerous icy storms and sluggish consumer spending.
Retailers that lowered their guidance battered by the holiday
Family Dollar Stores Inc.
American Eagle Outfitters Inc.
L Brands Inc.
Gap currently carries a Zacks Rank #3 (Hold) and is scheduled to
release its January sales results on Feb 6, 2014.