Gap Q2 Earnings Meet Views

reported in-line earnings for the second quarter and reaffirmed its earnings forecast for the year. The San Francisco, California-based company reported a quarterly profit of $219 million, or $0.52 per share, compared to $332 million, or $0.75 per share, in the year-ago period. Excluding items, the company's profit came in at $0.64 per share. Its net sales slipped 2 percent to $3.90 billion from $3.98 billion. However, analysts were expecting earnings of $0.64 per share on revenue of $3.97 billion. The average estimate among 21 Estimize users was for earnings of $0.65 per share and revenue of $3.93 billion. Gap's comparable sales slipped 2 percent for the second quarter. Comparable sales at Gap Global dropped 6 percent, while comparable sales at Banana Republic Global shrank 4 percent. However, comparable sales at Old Navy Global gained 3 percent. Its gross margin shrank to 37.4 percent from 39.4 percent. Its operating expenses rose to $1.09 billion in the latest quarter, from $1.00 billion in the year-ago quarter. During the quarter, the company repurchased 10 million shares for around $375 million. Gap ended the quarter with $1.04 billion in cash and cash equivalents. "I remain confident in our strategies to improve business performance and drive loyalty going forward," said Art Peck, chief executive officer, Gap Inc. "Our evolving product operating model is laying the foundation to more consistently deliver on-trend product collections across our portfolio." The company reaffirmed its full-year adjusted earnings forecast of $2.75 to $2.80 per share. Gap shares fell 0.51 percent to $33.49 in the after-hours trading session.