Gap (GPS) saw its third-quarter profit climb 9.4% amid strong online sales and growth at the retailer’s namesake stores.
The company affirmed its full-year guidance and disclosed a new $1 billion buyback program. An existing share-repurchase plan has about $100 million remaining.
Gap reported a profit of $337 million, up from $308 million in the year-ago period. Per-share earnings rose to 72 cents from 63 cents. Sales improved 3.1% to $3.98 billion.
Wall Street estimates called for earnings of 71 cents a share on revenue of $3.97 billion.
The top line got a big boost from online sales, which surged 20%.
Same-store sales across all brands rose 1%, the seventh consecutive quarter of year-over-year growth. Gap stores were also up 1%, while Banana Republic fell 1%. Old Navy’s same-store sales were flat.
International sales outpaced an increase of 1.5% in the U.S. Sales jumped 11% in Asia, 6.8% in Europe and 3.5% in Canada.
Gap’s gross margin in the latest period narrowed to 40% from 41.2%.
Several national retailers like Best Buy (BBY) have warned that margins could be threatened by an increase in promotional activity, an attempt to drive sales during the holiday season.
Shares fell 1.1% to $41.40 shortly after Friday’s opening bell. As of Thursday, the stock was up 32.8% on the year.