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Gap Inc's net earnings jump 39% in Q2

20
Aug '05

One of the world's largest specialty retailers Gap Inc reported that net earnings for the second quarter, which ended July 30, 2005, increased 39 percent versus prior year to $272 million, or $0.30 per share on a diluted basis, compared with $195 million, or $0.21 per share, for the same period last year.

Second quarter net sales were $3.7 billion, compared with $3.7 billion for the same period last year. Comparable store sales decreased 3 percent, compared with a flat comp in the prior year.

"In the second quarter, company delivered respectable financial results with an increase in earnings per share, but our summer product performance continued to be challenging," said Gap Inc. CEO and President Paul Pressler. "Although they are still facing challenges, they are committed to executing our strategies to improve business performance for the second-half of the year. Across all of our brands, the teams are focused on creating stronger product assortments and improving the store experience for our customers."

Additional Results and 2005 Outlook Earnings
The company had expected fiscal year 2005 earnings per share (EPS) of $1.44 to $1.48. This previous guidance was predicated in part on the belief that the company's efforts to improve performance would begin to gain momentum by fall. In part due to August month-to-date results, which are significantly below expectations, and concerns about the macro-economic climate, the company has revised its estimate for fiscal year 2005 earnings per share to $1.30 to $1.34.

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