Gap (GPS) Reports Inline Q1; Investors Cheer Raised FY12 Guidance

May 17, 2012 5:32 PM EDT
Gap (NYSE: GPS) shares are up more than 5 percent Thursday afternoon following inline first-quarter results and modestly raised FY12 guidance. The stock last traded at $28 even.

Sales rose nearly 6 percent from $3.295 billion for the quarter ended April 30th, 2011 to $3.49 billion. The Street was expecting revenue of $3.46 billion. Total same-store sales rose 4 percent. Comparable-store sales were up 5 percent to Gap North America and Banana Republic North America, Old Navy North America comps were up 4 percent and International comps were down 4 percent.

Net income was flat at $233 million, which translated into EPS of 47 cents. The result included a benefit of about $0.01 related to favorable reassessments of tax positions in the quarter, moving the adjusted earnings number to 46 cents per share. Analysts were looking for EPS of 46 cents.

“During the quarter, we improved sales, grew earnings per share, and continued investing in the business to drive performance,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “We’re pleased with the progress we’re making against our 2012 priorities in both our domestic business and global growth initiatives.”

The company boosted its FY12 EPS guidance from $1.75 to $1.80 to a new range of $1.78 to $1.83, which compares to the Street estimate of $1.98.

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