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Gap Rises After Profit Exceeds Estimates on April Sales Gain

Gap store | Source: Flickr
By
  • Bloomberg

SAN FRANCISCO, United States — Gap Inc. rose as much as 5.8 percent in late trading after posting preliminary first-quarter profit that beat analysts' estimates, helped by an unexpected gain in April sales.

The shares climbed as high as $41.50 at 4 p.m. in New York after closing at $39.24. The San Francisco-based company had advanced 0.4 percent this year through the close of regular trading today, compared with an 11 percent drop for the Standard & Poor’s 500 Retailing Index.

Profit per share in the quarter through April was 56 cents to 57 cents, the company said today in a statement. The average of 32 analysts’ estimates compiled by Bloomberg was 53 cents. Gap will report full first-quarter results on May 22.

Helping the quarter’s profit was a 9 percent gain in same- store sales in April. Analysts had projected a 0.5 percent decline.

Chief Executive Officer Glenn Murphy is working to maintain sales growth as apparel retailers look for new styles and increase discounts to offset flagging mall traffic. The company is focusing on merging its online and in-store shopping experiences with programs like reserve-in-store.

U.S. retailers posted a 6.2 percent comparable-store sales gain in April, the biggest increase since June 2011, as better weather and the late Easter holiday helped attract shoppers, researcher Retail Metrics Inc. said today before Gap’s announcement.

By Lindsey Rupp; Editors: Nick Turner, Kevin Orland, Ben Livesey

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