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Gap's 1st-quarter net income flat, sales up, company raises guidance, shares rise
SAN FRANCISCO (AP) ' Clothing seller Gap Inc. said Thursday that sales improved at its Old Navy, Gap and Banana Republic chains and online. But its first-quarter net income was unchanged from a year ago as rising costs offset those gains.
The company's adjusted results met analyst forecasts, and it raised its guidance for the year.
Gap has struggled for years to reclaim its status as a fashion leader, and the results show it is making strides in its effort to get more people to shop in its stores. More than two-thirds of the company's revenue came from stores in the U.S., while 12 percent was generated online.
"During the quarter, we improved sales, grew earnings per share and continued investing in the business to drive performance," said CEO Glenn Murphy.
Gap said its net income was $233 million, or 47 cents per share. Excluding a penny benefit related to a reassessment of tax positions, it said its net income was 46 cents per share ' same as analysts forecast on average, according to FactSet.
Calculated per share, Gap's earnings rose from last year's first quarter because it had 16 percent fewer shares outstanding.
Gap first announced its quarterly revenue earlier this month. It rose 6 percent to $3.49 billion, topping analysts' average forecast for $3.46 billion.
Revenue from stores open at least a year, an important gauge of retailers' health, rose 4 percent. The comparison is considered key because it isn't skewed by results from stores that open or close during the year.
The measure rose 5 percent at Gap and Banana Republic stores in North America and 4 percent at Old Navy stores in North America. It fell 4 percent at international stores, though total overseas revenue rose 13 percent to $511 million.
Online revenue rose 18 percent to $410 million, the company said.
The company raised its guidance to $1.78 to $1.83 per share from $1.75 to $1.80. Analysts expect $1.97 per share.
The shares rose 86 cents, or 3.3 percent, to $27.17 after hours, having closed at $26.31, down 79 cents, or almost 3 percent.