Gap Q4 tops estimates as Old Navy, online surges; 20 Athleta stores on tap
San Francisco -- Gap Inc. reported stronger-than-expected fourth-quarter results on Thursday, fueled by surging sales at Old Navy and strong online results. But it offered a disappointing profit outlook for 2015 as it feels the impact of the stronger U.S. dollar and West Coast port delays.
On the expansion front, Gap said it will continue to grow its 101-store Athleta brand, with about 20 additional U.S. stores in fiscal 2015. Globally, Gap plans to open about 40 new stores in greater China in 2015. In total, the company expects to open about 115 company-operated stores, net of closures and repositions, focused on greater China, Athleta and global outlet stores.
“Looking ahead at 2015, we will continue executing our global growth strategy, bringing new digital capabilities to life and making the shifts necessary to consistently deliver the brand-right, emotional product that our customers expect from all of our brands,” said new CEO Art Peck.
Gap posted net income of $319 million for the quarter, up from $307 a year earlier.
Revenue rose 3% to $4.71 billion, up from $4.58 billion last year. Online sales rose 13% from a year ago to $792 million.
Total same-store sales rose 2%, with sales skyrocketing 12% at Old Navy.
Gap also announced that its board had approved a new $1 billion share repurchase authorization for the company’s common stock and plans to increase its annual dividend,
Gap Inc.’s fourth-quarter revenue grew by 3%, but it took improved sales at Old Navy stores to help offset a drop-off at the company’s namesake brand.
For the full fiscal year, Gap’s profits fell 1.4% to $1.26 billion.
Revenue rose 2%, to $16.4 billion. Same-store sales fell 5% at Gap’s namesake, rose 5% at Old Navy and were flat Banana Republic.
The company ended fiscal year 2014 with 3,709 stores in 50 countries, of which 3,280 were company-operated. Square footage of company-operated stores was up 2.4% compared with the end of fiscal year 2013.