Q1 net sales up 6% at apparel retailer Gap
Gap Inc reported that net sales for the first quarter, which ended April 28, 2012, increased 6 percent to $3.5 billion compared with $3.3 billion for the first quarter last year. The company's first quarter comparable sales increased 4 percent. Net income for the first quarter was $233 million, flat compared with the first quarter last year. First quarter diluted earnings per share increased 18 percent to $0.47 compared with $0.40 last year.
“During the quarter, we improved sales, grew earnings per share, and continued investing in the business to drive performance,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “We're pleased with the progress we're making against our 2012 priorities in both our domestic business and global growth initiatives.”
Given first quarter performance, the company has raised its estimate for fiscal year 2012 diluted earnings per share to be in the range of $1.78 to $1.83, representing a 14 percent to 17 percent increase over fiscal year 2011 diluted earnings per share of $1.56.
Additional First Quarter Highlights
- In North America, Gap, Banana Republic, and Old Navy each delivered positive comparable sales for the quarter.
- Total net sales for the Gap Inc. Direct division increased 18 percent to $410 million compared with $348 million last year.
- Net sales for regions outside of North America (including online and franchise) were $511 million compared with $454 million last year, an increase of 13 percent.
- Franchise net sales increased 30 percent compared with last year, and the company entered three new markets during the quarter.
- The company continued to expand its store base in China, opening 7 new stores during the first quarter.
First Quarter Comparable Sales Results
The company's first quarter comparable sales were up 4 percent compared with a 3 percent decrease in the first quarter last year.
Comparable sales for the first quarter of fiscal year 2012 were as follows:
- Gap North America: positive 5 percent versus negative 3 percent last year
- Banana Republic North America: positive 5 percent versus negative 1 percent last year
- Old Navy North America: positive 4 percent versus negative 2 percent last year
- International: negative 4 percent versus negative 6 percent last year
Net sales for regions outside of North America, including online and franchise, were $511 million and $454 million for the thirteen weeks ended April 28, 2012 and April 30, 2011, respectively.
First quarter diluted earnings per share of $0.47 increased 18 percent compared with $0.40 for the first quarter last year. This includes a benefit of about $0.01 related to favorable reassessments of tax positions in the quarter.
The company raised its guidance for fiscal year 2012 diluted earnings per share to be in the range of $1.78 to $1.83.
Depreciation and Amortization
The company continues toexpect depreciation and amortization expense, net of amortization of lease incentives, for fiscal year 2012 to be about $475 million.