New York, NY, United States (4E) – Gap Inc. said second-quarter profit surpassed analysts’ estimates as discounts attracted bargain-hunting shoppers at its Old Navy chain.
In the quarter ended Aug. 2, profit stood at $332mn, or 75 cents per share, up from $303mn, or 64 cents per share, a year ago, the company said. The recent quarter’s results included a per-share benefit of about five cents linked to a building sale. In the most recent quarter, per-share earnings were 70 cents excluding that benefit.
The biggest U.S. apparel-focused retailer said its gross margin declined to 39.4 percent from 40.5 percent a year ago. Operating expenses declined 4.2 percent to $1bn.
The company had earlier predicted per-share adjusted earnings of 68 cents to 69 cents and reported sales growth of 3 percent to $3.98bn. Meanwhile, sales at existing stores stayed flat, compared with a 5 percent gain a year ago.