Gap Inc. saw hopeful results in the first quarter due in large part to an increase in Old Navy sales.
The company’s first quarter comparable sales were up 2 percent compared to a 5 percent decline during the same period last year. Net income rose to $143 million, or $0.36 per share during the first quarter, compared to $127 million, or $0.32 per share, a year earlier.
“We are pleased with our positive comp and earnings growth this quarter,” said Art Peck, president and CEO of Gap Inc. “We’ve made substantial improvements in product quality and fit, and our increasing responsive capabilities are enabling us to better react to trends and demand.”
Old Navy saw the biggest gains, reporting an 8 percent increase in sales, compared to a 6 percent decrease during the same period last year, exceeding analysts projections. Meanwhile, Gap Global saw a decrease of 4 percent versus a decrease of 3 percent last year. Banana Republic Global reported a decrease in comparable sales of 4 percent, which is less than last year’s 11 percent decrease during the same time frame.
“The result was delivered in a tough market is an achievement,” Neil Saunders, GlobalData Retail managing director, told Reuters in an interview. “Outside of this powerhouse of growth, the company’s other brands fared far less well…This imbalance means that Gap is firing on just one cylinder.”
The company reported $3.4 billion in net sales, almost stagnant compared to last year due in part by the strong dollar, which affected the first quarter revenue by around $11 million.
“While the retail environment continues to be challenging, we are focused on delivering the best possible product and customer experience, and our ability to leverage a portfolio of iconic brands and operating scale uniquely positions the company for long-term growth,” said Peck.
Gap reaffirmed its full-year earnings per share guidance range of $1.95-$2.05.