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Gap shares gain 2% amid improved fourth quarter, full-year guidance

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Investing.com -

Investing.com -- Shares in Gap Inc (N:GPS) rose by more than 2% in after-hours trading after the beleaguered clothing company topped analysts' forecasts with its fourth-quarter and full-year guidance on Monday.

For Gap's fourth quarter of fiscal year 2015, the San Francisco-based company finished with net sales of $4.39 billion, down from $4.71 billion during the same period a year earlier. It came amid sharp losses in the company's comparable store sales among its Banana Republic and Old Navy brands. One year after same store sales at Old Navy surged 11% in the fourth quarter, the division's comparable sales fell 8% in the final quarter of the year. At the same time, Banana Republic's same store sales plunged 13% for the three-month period, considerably below gains of 1% in the fourth quarter of 2014. At Gap's namesake brand, the company saw its same-store sales fall 3% slightly above declines of 6% a year earlier.

Still, investors focused more intently on Gap's improved full-year guidance, which could signal that the company could be on the verge of a turnaround. For the quarter, Gap offered a fourth-quarter outlook of 0.56 and 0.57 per adjusted share, slightly above analysts' forecasts of 0.53. Gap also released full-year guidance between 2.41 and 2.42 per share, above analysts' estimates of 2.37.

Gap will release its full fourth quarter earnings on February 25.

"We are pleased to guide to the high end of our previously announced full-year earnings per share range," said Sabrina Simmons, chief financial officer of Gap Inc. "As we kick-off fiscal year 2016, our brands look forward to introducing their new Spring collections to customers."

Also on Monday, Gap released its comparable store sales for the month of January. Banana Republic, the company's underperformer, ended the quarter on a down note, as its same store sales slumped 17% on the month. Both Gap and Old Navy saw their comparable store sales fall 6%.

Last June, Gap announced the closure of 175 stores from its namesake brand in a cost-cutting measure aimed at delivering a more consistent and compelling product collection.

Shares in Gap rose 0.62 or 2.61% in after-hours to 24.60.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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