Gap 3Q Profit Tops Expectations, Raises Dividend 20%

By RetailFOXBusiness

Gap (NYSE:GPS) revealed stronger-than-expected fourth-quarter earnings and an upbeat outlook late Thursday as demand at its more established stores ticked higher during the key holiday shopping season.

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The retailer also unveiled after hours an upbeat outlook and raised its quarterly dividend by 20% to 60 cents a share, payable around May 1 to shareholders of record on April 10. Gap has raised its annual dividend in each of the last four years.

The San Francisco-based apparel company reported net income of $351 million, or 73 cents a share, compared with a year-earlier profit of $218 million, or 44 cents a share.

The results topped average analyst estimates in a Thomson Reuters poll by two pennies.

Revenue for the three-month period was $4.73 billion compared with $4.28 billion a year ago, beating the Street’s view of $4.63 billion. Same-store sales, a measurement of sales at stores open longer than a year, ticked up about 5% after a 4% decline in the year-earlier period.

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“Our results in 2012 were stellar in many ways, and I’m very pleased with how well our product resonated with customers,” said Gap CEO Glenn Murphy. “We enter 2013 focused on leveraging our global brands to gain more market share and continuing to increase shareholder value.”

Sales at Gap’s more established stores climbed across its brands, led by an 8% improvement in Old Navy North America and 4% growth in Gap North America.

Looking toward fiscal 2013, Gap sees EPS in the range of $2.52 to $2.60 a share, which would mark a year-over-year improvement of 8% to 12%. The outlook brackets the consensus view of $2.59.

Shares of Gap ticked up about 1.75% to $33.50 in extended trading.