The numbers: Good. Clothing retailer Gap reported a 43% jump in net income, beating expectations. Net sales increased by 7% to $3.7 billion. But analysts had forecast higher annual profits than Gap’s estimate of at least $2.52 in earnings per share. Gap blamed the weakening yen for its conservative forecast, since that decreases the profitability of its Japanese sales in dollar terms. As a result, the stock dropped in after-hours trading.
The numbers: Good. Clothing retailer Gap $GPS reported a 43% jump in net income, beating expectations. Net sales increased by 7% to $3.7 billion. But analysts had forecast higher annual profits than Gap’s estimate of at least $2.52 in earnings per share. Gap blamed the weakening yen for its conservative forecast, since that decreases the profitability of its Japanese sales in dollar terms. As a result, the stock dropped in after-hours trading.
The takeaway: After struggling during the past decade because of boring clothes, the Gap appears to be back in fashion. Sales improved at Gap stores, while same-store sales rose
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What’s interesting: So far, Gap doesn’t seem to be hurt by calls to boycott the retailer because it has yet to sign an industry agreement to improve worker safety in Bangladesh. H&M, Inditex (the parent of Zara stores), and other retailers signed the measure after a fire at a Bangladeshi garment factory that killed more than 1,000 people. Gap has said the agreement would expose it to unlimited legal liability. Not signing the agreement hasn’t had a visible impact on Gap’s image or its bottom line, leaving little incentive for the retailer to change its position.
