Business

Old Navy Boosts Gap Second Quarter Profit

August 23, 2018 / 4:24 PM PDT / CBS Sacramento

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SAN FRANCISCO (AP) - Gap's second-quarter profit rose nearly 10 percent to $297 million as its Old Navy brand continued to do well but sales slipped at its namesake stores.

The San Francisco-based company on Thursday reported net income of $297 million, or 76 cents per share, in the quarter that ended Aug. 4. That's up from $271 million, or 68 cents per share, a year ago.

The latest quarter's results topped the 72 cents per share profit that the analysts surveyed by Zacks Investment Research expected.

The clothing chain posted revenue of $4.09 billion in the period, which also topped Street forecasts. Nine analysts surveyed by Zacks expected $3.98 billion.

Gap Inc. said its overall sales at comparable stores improved 2 percent overall, compared with 1 percent last year.

Old Navy stores improved comparable sales 5 percent on top of last year's 5 percent improvement.

Banana Republic sales improved 2 percent compared to last year's 5 percent decline.

But sales at Gap stores fell 5 percent in the quarter, which was worse than last year's 1 percent decline.

Gap reaffirmed its prediction for its full-year earnings to be between $2.55 to $2.70 per share. The analysts surveyed by FactSet expect full-year earnings per share of $2.56 on average.

However, several other major retailers have recently increased their profit outlooks.

Gap shares fell 7 percent, or $2.29, to sell for $30.15 in after-hours trading on Thursday.