Gap Beats on Earnings, Raises Dividend 20%
Gap reported quarterly earnings and revenue Thursday that exceeded analyst expectations.
The mall clothing chain that owns the Gap, Old Navy and Banana Republic brands also increased its dividend by 20 percent.
Shares popped more than 3 percent after the closing bell, following the news. What is Gap's stock doing now? (Click here for the latest after-hours quote.)
Net income for the quarter jumped 61 percent to $351 million, or 73 cents a share, from $218 million, or 44 cents a share in the year-earlier period.
Revenue improved more than 10 percent to $4.73 billion from $4.28 billion a year ago.
Analysts had expected Gap to report earnings of 71 cents a share on $4.63 billion in revenue, according to a consensus estimate from Thomson Reuters.
Sales rose 5 percent at stores open at least a year, considered a key indicator of a retailer's health.
Gap's outlook came in on the low end of expectations: It expects to earn between $2.52 and $2.60 per share in 2013; analysts currently expect $2.59 a share. The company cited the weakening yen as a factor.
It's been a tough environment for retailers as U.S. consumers are being squeezed by a trio of factors: rising gasoline prices, a payroll-tax hike and delayed tax refunds.
J.C. Penney share dropped nearly 20 percent after the department store reported its sharpest drop in sales since announcing a transformation plan 13 months ago.
Kohl's reported a lower fourth-quarter profit and forecast full-year earnings that were short of Wall Street expectations.
Meanwhile, Sears Holdings, which includes Kmart stores, reported a higher-than-expected quarterly profit, but Wall Street noted this was mainly thanks to cost cuts and sent shares down as much as 7 percent.
Last week the retail behemoth Wal-Mart beat earnings estimates, but weak guidance for the coming quarter overshadowed those results.
