Gap Inc. Reports Increase In October Sales And Strong Third Quarter Sales Results

Gap Inc. (NYSE: GPS) today reported that net sales for the third quarter of fiscal year 2012 increased 8 percent compared with last year, and October 2012 net sales increased 6 percent compared with last year.

Net sales for the third quarter, which ended October 27, 2012, increased 8 percent to $3.86 billion compared with $3.59 billion for the third quarter last year. The company’s third quarter comparable sales were up 6 percent compared with a 5 percent decrease in the third quarter last year.

In addition, net sales for the four-week period ended October 27, 2012 were $1.22 billion compared with net sales of $1.14 billion for the four-week period ended October 29, 2011. The company’s comparable sales for October 2012 were up 4 percent compared with a 6 percent decrease in October 2011.

“We’re very pleased with the continued momentum in the business across all brands in North America,” said Glenn Murphy, chairman and chief executive officer at Gap Inc. “Our focus remains on offering great product to our customers in order to sustain our business performance.”

Third Quarter Guidance

The company expects diluted earnings per share for the third quarter of fiscal year 2012 to be in the range of $0.61 to $0.63, compared with $0.38 for the third quarter last year. This represents an increase of about 60% over last year. The expected third quarter diluted earnings per share includes a benefit of about $0.02 primarily related to tax credits.

Third Quarter Comparable Sales Results

Comparable sales for the third quarter of fiscal year 2012 were as follows:
  • Gap North America: positive 7 percent versus negative 6 percent last year
  • Banana Republic North America: positive 6 percent versus negative 1 percent last year
  • Old Navy North America: positive 9 percent versus negative 4 percent last year
  • International: negative 3 percent versus negative 10 percent last year

October Comparable Sales Results

Comparable sales for October 2012 were as follows:
  • Gap North America: positive 6 percent versus negative 5 percent last year
  • Banana Republic North America: positive 5 percent versus positive 1 percent last year
  • Old Navy North America: positive 5 percent versus negative 9 percent last year
  • International: negative 2 percent versus negative 7 percent last year

Year-to-date net sales were $10.93 billion for the 39 weeks ended October 27, 2012, which was an increase of 6 percent compared with net sales of $10.27 billion for the 39 weeks ended October 29, 2011. The company’s year-to-date comparable sales increased 5 percent compared with a 3 percent decrease last year.

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