GAP Announces Q2 Earnings Beat

Retailer Gap

reported impressive second-quarter earnings Thursday. Sales increased 6 percent to $3.58 billion while second-quarter comps increased 4 percent. Second-quarter net income went up 29 percent to $243 million compared to the second-quarter last year, while second quarter diluted earnings per share rose 40 percent to $0.49 compared to $0.35 last year. In reaction to the numbers, Gap revised its fiscal-year EPS guidance to $1.95-$2.08, up from its previous guidance of $1.78-1.83. Their guidance falls below analyst expectations of $2.08 per share. GAP had this to say about their report: "Customers responded well to our product offerings across our brands, driving a healthy increase in sales and earnings per share during the quarter," said Glenn Murphy, chairman and chief executive officer of Gap Inc. "Our continued focus on product and store execution are helping to drive positive momentum and we're committed to sustaining solid performance for the remainder of the year." While Gap fell upon hard times in 2011, it has been recovering following a shake up in management. Last year the company made multiple changes, the most notable of which was the ousting of its chief designer. While most of the statistics in its report were encouraging, Gap reported a decrease of 5 percent in international same-store sales. So, while the new Gap initiatives have been received well in the United States, they still struggle in international markets which may hurt their sustained growth abilities. Gap has rose roughly 4.6 percent since the announcement Friday.