Retail giant The Gap Inc. (NYSE:GPS) posted better-than-expected earnings per share, but revenue came in just below the Street’s view and the company’s full-year forecast was mostly lower than expected.
The apparel chain forecast full-year earnings in the range of $1.40 and $1.50 a share, versus analyst forecasts for full-year earnings of $1.50 a share. The company said it expects inventory dollars per store to rise to the mid-to-high single digits by the end of the fourth quarter.
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In the third quarter, net income fell to $193 million, or 38 cents a share, down from profit of $303 million, or 49 cents, one year ago.
Net sales fell 2% to $3.59 billion, compared with year-ago sales of $3.65 billion. Sales at the company’s three branded U.S. stores all fell slightly compared to the year-ago quarter. Gap brand sales totaled $819 million, as sales at U.S. Banana Republic stores came in at $495 million during the third quarter. Sales of Old Navy merchandise totaled $1.11 billion in the third quarter.
The results were mixed, as analysts polled by Thomson Reuters had predicted earnings of 36 cents a share on revenue $3.61 billion.
"Across our brands, we're intensely focused on improving our current sales trend, including making necessary product and marketing adjustments, with a view toward building momentum as we head into 2012," said Glenn Murphy, chairman and chief executive officer of Gap Inc., in a press release. "We're ready to compete aggressively this holiday."
The company said it closed a total of 31 stores in the third quarter, as it opened 59 new stores and forecast a total of 950 Gap stores in North America by the end of 2013. Inventory dollars per store rose 6% at the end of the third quarter.
Shares of Gap fell 1.18% to close at $19.25 on Thursday. The stock was up slightly in after-hours trading after the company announced its third-quarter results.