Apparel retailer Gap reports surge of 17% in Q2FY15 EPS

25 Aug '14

3 min read

US-based and NYSE-listed apparel retailer – Gap Inc posted earnings per share increase of 17 percent, from a year earlier quarter in the second fiscal quarter of 2014.

Second quarter fiscal year 2014 diluted earnings per share stood at $0.75 compared with diluted earnings per share of $0.64 in the second quarter of fiscal year 2013.

Gap said the second quarter of 2014 diluted earnings per share includes a benefit of about $0.05 from a gain on the sale of a building owned but no longer occupied by the company.

Excluding this benefit, the apparel retailers’ adjusted diluted earnings per share stood at $0.70.

Net sales for the second quarter rose 3 percent to $3.98 billion in the second fiscal quarter of 2014, compared with $3.87 billion in the prior year quarter.

“Building on last year’s strong performance, we are pleased to have grown our sales three percent and delivered solid improvement in earnings per share,” Glenn Murphy, CEO at Gap said.

Second quarter of 2014 comparable sales was flat compared with a 5 percent increase in the second quarter of last year.

Gap Global posted a negative 5 percent growth versus 6 percent last year, Banana Republic Global reported flat growth against a negative 1 percent last year and Old Navy Global showed 4 percent growth versus 6 percent last year, when comparing brand wise comparable growth.

In the quarter under review, Gap announced plans to enter India, through franchise-operated Gap brand stores in 2015.

Gap brand also continued to grow its store base in the greater China region with 5 new stores and will close the fiscal year with around 110 Gap stores across China, Hong Kong and Taiwan.

Three company-operated Old Navy brand stores were opened in China in the quarter. In addition, Old Navy is on track to open about 20 stores in Japan this year for a total of about 40 stores.

Following the brand’s launch of franchise-operated stores in the first quarter of fiscal year 2014, Old Navy expects to open a total of 5 franchise-operated stores in the Philippines during 2014.

Athleta opened 8 new stores during the second quarter for a total of 79 stores, and the brand remains on track to end fiscal year 2014 with about 100 U.S. stores.

Gap continued to enhance its digital capabilities for customers due to which online net sales increased 11 percent year-on-year to $515 million in the second quarter of 2014.

“We remain focused on our strategic initiatives, as we turn our focus toward delivering a strong second half,” CEO Glenn Murphy added.

Fibre2fashion News Desk - India

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