NEW YORK -- Gap Inc. raised its outlook for the year after reporting stronger third-quarter net income that beat Wall Street expectations on Thursday.
The San Francisco-based clothing retailer said an uptick in sales at its Banana Republic, Old Navy and namesake stores helped lift its net income by 60 per cent for the period. The performance is the latest sign the company may be in turnaround mode, fuelled by strong marketing and revamping its products.
Last month, Gap announced a management overhaul aimed at enabling it to respond more quickly to changing tastes around the world. The change, to take effect in February, will put the North American, international, online, outlet and franchise divisions under a single global executive for each of the company's brands. The company is also forming a new innovation and digital strategy team to further advance its efforts in that area.
For the quarter, the company said revenue at stores open at least a year for the period rose six per cent in North America. The figure is a key measure of a retailer's health, because it excludes the volatility of newly opened and closed locations. The figure rose seven per cent at Gap, six per cent at Banana Republic and nine per cent at Old Navy, after each of the brands logged declines in the year-ago period.
Net sales for the online division rose 23 per cent to $509 million. International sales rose seven per cent. CEO Glenn Murphy said the results highlight how its lineup is resonating with customers.
"We are ready to compete and win this holiday season as we drive to build upon our top-line growth," Murphy said.
For the three months ended Oct. 27, the company said it earned $308 million, or 63 cents per share, compared with $193 million, or 38 cents per share, in the year-ago period.
-- The Associated Press