Things are looking up at Gap, led by Old Navy

Gap Inc.’s reported a 12% jump in first quarter profit amid another strong performance from its Old Navy division.



Net income rose to $143 million, or 36 cents per share, in the quarter ended April 29, from $127 million, or 32 cents per share, a year earlier. Its results easily beat the Street, which had predicted earnings of 29 cents per share.



Net sales for the quarter were $3.4 billion, about flat with last year and also better than expected. The translation of foreign currencies into U.S. dollars negatively impacted the company’s net sales for the first quarter of fiscal year 2017 by about $11 million, Gap said.



Total same-store sales for the quarter rose 2%. Analysts had expected a 2% decrease. By brand, same-store rose 8% at Old Navy, and fell 4% at Gap and 4% at Banana Republic.



“We are pleased with our positive comp and earnings growth this quarter,” said Art Peck, president and CEO, 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. 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.”



The company also reaffirmed its full-year diluted earnings per share guidance to be in the range of $1.95 to $2.05.



The company ended the first quarter of fiscal year 2017 with 3,652 store locations in 50 countries, of which 3,186 were company-operated. It expects store count to be about flat at the end of fiscal year 2017 compared with fiscal year 2016, down from previous guidance of 40 net store openings.