SAN FRANCISCO (dpa-AFX) - Fashion retailer Gap Inc. (GPS) said Thursday after the markets closed that its first quarter profit rose 43% from last year, helped by higher sales and improved margins.
The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly sales. At the same time, the company eaffirmed its fiscal year 2013 earnings outlook, which is below analysts' current consensus estimate.
'We are pleased with our strong start to the year, especially first quarter sales,' said Glenn Murphy, chairman and chief executive officer of Gap Inc. 'We remain focused on continuing to deliver shareholder value.'
Gap shares are currently losing 1.21% in after hours trading after closing the day's regular trading session at $41.36, up 32 cents. The shares trade in a 52-week range of $25.02 to $41.86.
Gap offers apparel, accessories, and personal care products for men, women, children, and babies under its namesake, Old Navy, Banana Republic, Piperlime, and Athleta brand names. Its products include assortments, such as denim, khakis, outerwear, tees, and accessories; maternity apparel; women's loungewear, sleepwear, intimates, and sports and active apparel; and handbags, shoes, jewelry, personal care products, and eyewear. Though the U.S. continues to be its largest market, the company is trying to expand its presence in Japan and China.
Same-store sales for the first quarter increased 2%, driven by strength in all three global brands: Gap, Old Navy, and Banana Republic.
For the first quarter ended May 4, 2013, the San Francisco-based reported net income of $333 million or $0.71 per share, compared to $233 million or $0.47 per share for the year-ago quarter.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.69 per share for the first quarter.
The company said the fiscal year 2013 first quarter earnings ncluded a positive impact from the calendar shift created by the 53rd week in fiscal year 2012 and a benefit from the favorable resolution of tax positions in the quarter.
Gross margin for the quarter improved to 41.4% from 39.4% a year earlier, while operating margin for the quarter rose to 14.2% from 11.3% last year.
As previously announced, net sales for the first quarter rose 7% to $3.73 billion from $3.49 billion in the same quarter last year. Twenty-five analysts had a consensus revenue estimate of $3.68 billion for the first quarter.
During the first quarter, the company opened 43 and closed 33 company-operated stores, ended the quarter with a total of 3,428 store locations, 3,105 of which were company-operated.
The company repurchased $58 million of stock during the first quarter. In January, the company said it has completed its previous $1 billion authorization and announced a new $1 billion share repurchase authorization.
Looking forward, the company said it continues to expect fiscal year 2013 earnings of $2.52 to $2.60 per share. Analysts currently expect the company to earn $2.73 per share for the fiscal year 2013.
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