The Gap Inc.
) gained 5.1% during yesterday's after-hours trading session
following the company's better-than-expected sales results for the
four-week period ended Aug 2, 2014. Investors were also encouraged
by the company's impressive earnings forecast for the second
quarter of fiscal 2014.
Gap's net sales in Jul 2014 witnessed a year-over-year increase
of 5% and reached $1.17 billion compared with $1.12 billion in the
year-ago comparable period. Comparable-store sales (comps) for the
month improved 2% as against a rise of 1% registered in July last
The company's July comps mainly benefited from the strong
performance at its
brands which was partially offset by weak performance at its
namesake brand. The company's
Old Navy Global'
s comps increased 3% versus a 5% decline in Jul 2013, while comps
Banana Republic Global
rose 6%, against a 1% decrease in the year-ago period. However,
were down 2% compared with an increase of 7% registered in the
Gap is not the only retailer which has registered a sharp rise
in its sales performance last month. Other retailers such as
Zumiez Inc. (
), Costco Wholesale Corp. (
) and L Brands, Inc. (
) have also witnessed increases -- 3.5%, 5% and 6%, respectively,
in July comps. The improved July results were mostly attributed to
a rise in traffic probably due to the positive economic factors
like an improved job scenario and consumer credit as well as heavy
Coming back to Gap, the company also provided its second-quarter
fiscal 2014 sales performance. The company's net sales for the
quarter improved 3% year over year to $3.98 billion compared with
$3.87 billion in the year-ago comparable quarter. However, comps
for the period remained flat versus a 5% rise registered in the
prior-year period, as the strong performance at Old Navy was fully
offset by weak sales at the namesake brand.
Brand-wise, comps at
were down 5% compared with a 6% increase in the prior-year period,
while comps at
Banana Republic Global
remained flat against a decline of 1% registered in corresponding
quarter of previous fiscal. However,
Old Navy Global
's comps rose 4% versus a 6% increase last year.
Apart from reporting sales performance for July and the second
quarter, the company revealed that, it is expecting earnings for
the second quarter to come in the range of 73 cents to 74 cents per
share. The company also disclosed that the expected earnings
include a gain of approximately 5 cents from the sale of real
Excluding the above-mentioned one-time gain, Gap expects
adjusted earnings to come in between 68 cents and 69 cents per
share. Currently, the Zacks Consensus Estimate for the quarter is
pegged at 66 cents per share.
Gap, which currently carries a Zacks Rank #3 (Hold) will report
its second-quarter results on Aug 21, 2014.
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