Gap Inc. Reports 25% Jump in Profit

SAN FRANCISCO-Gap Inc. on Thursday reported a 25% increase in profit on a 0.8% increase in net sales. The operator of 3,143 stores reported net income of $307 million or $0.44 per share, on net sales of $3.59 billion. In the same year-earlier period the company posted net income of $246 million or $0.35 per share on net revenue of $3.56 billion.

The company saw its sales decline during the recession but it appears to have helped its Old Navy chain, as has a redesign, a renewed focus on value and a new marketing campaign. The company’s Old Navy chain experienced a 10% jump in same-store sales while its Gap and Banana Republic chains went in the opposite direction, producing same-store sales declines of 7% and 6%, respectively. In the same year-earlier period, same-store sales fell for all three chains, led by an 18% decline in same-store sales at Old Navy and an 11% decline at Banana Republic; Gap’s decline matched the year-earlier period.

Including all stores, international net sales grew 2.4% while it fell in the US. Net sales at Old Navy North America grew 0.83%, fell 4.4% for Banana Republic North America and fell 7.75% for Gap North America. Sales for Gap Inc. Direct, its Internet sales division, grew by 4.9%.