* Q1 EPS $0.47 vs est $0.46
* Q1 comparable sales at major brands rise
* Raises FY EPS view to $1.78-$1.83
* Shares up 8 pct
(Adds analyst comment)
May 17 (Reuters) – Gap Inc raised its yearly profit
forecast, prompted by first-quarter earnings that topped Wall
Street estimates and rising sales, and its shares rose 8 percent
after hours.
For the full year, Gap estimated earnings of $1.78 to $1.83
a share, above the $1.75 to $1.80 it forecast in February.
“It’s important to remain measured in our outlook given that
our biggest selling seasons are still ahead of us,” said Chief
Financial Officer Sabrina Simmons.
Given the first quarter beat, “the current forecast does
appear to be conservative,” said Betty Chen, an analyst with
Wedbush Securities.
She said that while the company appeared to be on the right
track, “We’re all waiting to see some sustainability.”
For the first quarter ended April 28, the owner of the Gap,
Old Navy and Banana Republic chains earned $233 million, or 47
cents a share, compared with $233 million, or 40 cents a share,
a year ago.
Analysts, on average, had been expecting Gap to earn 46
cents a share, according to Thomson Reuters I/B/E/S.
After years of being accused of selling boring clothes, Gap
has regained an edge in fashion, following a prolonged
turnaround that included a change in top management.
The company’s spring merchandise is selling well, and its
website has been revamped.
Gap, the third biggest clothes retailer in the world after
Zara owner Inditex, and H&M; owner Hennes & Mauritz AB
, had preannounced that sales rose 6 percent to $3.49
billion, while comparable store sales were up 4 percent.
During the quarter, sales at established North American
stores rose 5 percent each for the Gap and Banana Republic
brands. Sales at Old Navy stores rose 4 percent, the company
said.
Gap shares rose to $28.50 after the bell. They closed down
2.9 percent at $26.31 on Thursday on the New York Stock
Exchange.
(Reporting by Nivedita Bhattacharjee in Chicago; Editing by
Andre Grenon, Phil Berlowitz and Richard Chang)
