Gap Inc. (GPS) beat fourth-quarter earnings expectations, as earnings-per-share topped the Street’s estimates and revenue was in-line with guidance; however same-store sales were mostly lower than the year-ago quarter.
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The retailer also forecast full-year earnings in the range of $1.75 to $1.80 per share, in-line with expectations for earnings of $1.79 a share, according to a poll by Thomson Reuters.
Net income fell to $218 million, or 44 cents a share, compared with last year’s fourth-quarter net income of $365 million, or 60 cents a share.
Revenue rose to $4.28 billion, compared with year-ago revenue of $4.36 billion. Fourth-quarter comparable sales were down 4%, compared with a 1% increase in the year-ago quarter.
The results topped expectations, as analysts had forecast earnings of 42 cents a share on revenue of $4.28 billion.
Gap North America stores reported same-store sale declines of 3%, compared with flat same-store sales during the fourth quarter last year, as Old Navy same-store sales fell 6% compared with last year’s 2% increase. Banana Republic same-store sales were flat compared with a 2% increase one year ago. International stores also reported a same-store sale decline of 8%, compared with a 1% increase a year ago.
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The company also expects to open 125 company-operated stores, of which 55 are international; it will close 115 company-operated stores, most of which are concentrated in North America.
"In spite of 2011 earnings being below last year, we're pleased with the progress we made against our long-term strategic plan, including growing our online business and expanding internationally," said Glenn Murphy, chairman and chief executive officer of Gap, in a release. Murphy went on to say that improving performance in base businesses is the company’s top priority for fiscal 2012.
Gap also announced a $1 billion share buyback plan on Thursday after the bell, to replace the current authorization which had a remaining $441 million. The retailer also boosted its annual dividend by 11% to 50 cents a share from the previous annual dividend of 45 cents. For the fiscal fourth quarter, the company declared a quarterly dividend of 12.5 cents a share.
Shares of Gap rose 2.4% ahead of its report on Thursday, closing the day at $23.52. The stock was up slightly in after-hours trading. Year-to-date, the shares are up 27%.