Gap Inc. (NYSE: GPS) reported higher-than-forecast earnings in the third quarter as its stores increased discounts to attract consumers before the holiday shopping season.
Profit for the retailer rose 9.4 percent from last year, helped by higher sales and lower operating expenses. The company reported net income of $337 million or $0.72 per share, compared to $308 million or $0.63 per share for the year-ago quarter, beating Wall Street estimates by a penny.
Net sales of $3.98 billion were up 3 percent over last year's $3.86 billion. Comparable sales increased 1 percent overall, with Gap up 1 percent, Banana Republic down 1 percent and Old Navy flat.
The company was able to achieve an earnings increase partly due to growth overseas. It opened 18 new Gap stores in China to end the quarter with 73 stores, and opened 14 Old Navy stores in Japan. Gap said that the company is on track to open a total of 15 to 20 for the year.
Further, the company's online business continues to post strong results with revenues rising approximately 20 percent to $589 million from $491 million a year ago. During the quarter, Gap's online business contributed about 14.8 percent to its total revenue.
The company reaffirmed its full year earnings per share guidance of $2.57 to $2.65.
Gap's shares rose 62 cents, or 1.5 percent, to close at $41.86 Thursday.
For more see
This Wall Street Journal article
Gap, Banana Republic Expand Omnichannel Approach With Reserve In Store Service
Gap Finds Missing Shoppers, Along With The Right Strategy
Gap Denies Bangladesh Factory Connection, But Is That Enough?
Walmart, Gap Launch Bangladesh Factory Safety Group
Gap Varies Buy-Online-Pickup-In-Store To Make Shoppers Stay In-Store Longer