NEW YORK (AP) -- Gap Inc. posted a 29 percent increase in second-quarter net income, evidence that the fashion retailer's moves to liven up its clothing is resonating with shoppers.
Gap, which operates stores under its namesake, Old Navy, Banana Republic and Athleta, also raised its full-year profit guidance for the second time since May, though it was below what analysts are forecasting.
During the conference call, Glenn Murphy, Gap's chairman and CEO discussed the reasons behind a solid quarter.
QUESTION: Why do you think your business has been turning a corner?
ANSWER: There are a number of reasons why our business has been consistently positive for the first half of this year. The number one reason is product, and there's been a lot of focus, a lot of effort starting late last year with our product teams and I'm really proud of the work they've done in the first half. Whether that's on the right styles, which obviously we've had great success with so far.
Typically, the color trend has been good for the industry, but we capitalized on it. I think we've really focused on fit and consistency of fit, and our scores on that front are improving into the second quarter. Lastly, we've made these targeted investments in key categories, categories where we want to dominate, where we want to win, and those are our product assets. We put the money behind those assets, and our customers are noticing it. Second thing ... I think we are flowing our product in a much more seasonally correct way. One thing that I've always been frustrated about is that July and January, in particular, have never been our best months.