SAN FRANCISCO (dpa-AFX) - Apparel retailer Gap Inc. (GPS), on Thursday reported a decline in profit for the second quarter, hurt largely by some continued weak sales at its namesake brand and Banana Republic, and as well impacted by a strong dollar and supply delays. However, earnings for the quarter were in line with Wall Street estimates, while revenues fell short of expectations.
San Francisco-based Gap's second-quarter profit dropped to $219 million or $0.52 per share from $332 million or $0.75 per share last year.
Excluding costs of about $0.12 per share related to strategic actions, Gap's adjusted earnings were $0.64 per share for the quarter. Twenty-nine analysts polled by Thomson Reuters had a consensus earnings estimate of $0.64 per share for the quarter. Analysts' estimates typically exclude special items.
Gap's sales for the second quarter dropped 2 percent to $3.90 billion from $3.98 billion last year. Twenty-nine analysts had a consensus revenue estimate of $3.97 billion for the quarter.
Gap's comparable sales for the quarter declined 2 percent, compared with a flat sales last year, as same-store sales at Gap slumped 6 percent and Banana Republic dropped 4 percent, Meanwhile, Old Navy reported a positive 3 percent same-store sales.
The company said its results were weighed down by a strong US dollar, supply constraints due to strike at West Coast ports, and strategic actions.
In July, Gap announced it will close about 175 under-performing Gap stores in North America as a turn-around plan. Gap stores has posted sales declines for six consecutive quarters.
The company now expects charges associated with the strategic actions of $130 million to $140 million, down from initial estimate of $140 million to $160 million.
'I remain confident in our strategies to improve business performance and drive loyalty going forward,' said Art Peck, chief executive officer.
Moving ahead, the company still continues to see adjusted earnings of $2.75 to $2.80 per share for the full year 2015. Analysts currently expect earnings of $2.73 per share for 2015.
GPS closed Thursday's trading at $33.66, down $0.44 or 1.29%, on the NYSE. The stock, however, gained $0.09 or 0.27% in after-hours trade.
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