Neil DennisUS clothing retailer Gap reported after US markets closed on Thursday that it expected full-year earnings to be in excess of previous forecasts following strong sales growth in the third quarter.
Gap said it was now expecting full-year adjusted earnings per share to be between $2.08-$2.12, up from its previous forecast of $2.02-$2.10.
Third-quarter highlights
In its third quarter, net sales to $2.84bn from $3.8bn in the same period a year ago, beating analysts' expectations of $3.7bn.
Net income also beat expectations, while earnings, at 58 cents a share, beat forecasts of 54 cents a share.
The company, which operates Banana Republic and Old Navy stores, as well its own Gap-branded outlets, said comparable sales rose 3% in the July-September period - reversing the 1% decline of the same period last year and beating analysts' forecasts of 1.3% rise.
Among the brands, sales at Gap rose 1%, Old Navy rose 4%, while Banana Republic continued to ebb, with sales declining 1% - slowing the 6% decline seen last year.
CEO comments
“Today, we are happy to report our fourth consecutive quarter of positive comps, reflecting the continued momentum in key parts of our business,” said Art Peck, president and chief executive (left).
“We continue to make progress against the balanced growth strategy we outlined in September, driving efficiency at our more mature brands, while growing our footprint in the value and active space, and investing in our online and mobile experience.”
Market reaction
After rising 2.16% in Thursday's trading session ahead of the results, the shares bounced a further 7.35% to $29.50 in pre-market trading on Friday.