SAN FRANCISCO (AP) — Gap Inc. said its profit rose 10 percent in the second quarter as the clothing retailer cut expenses and managed to lift sales.
The San Francisco-based company also said it plans to open Gap stores in India next year. The first locations will open in the country's two largest cities, Mumbai and Delhi. Over time, the company expects about 40 franchise-operated locations in India.
For the quarter, Gap said sales at established stores around the world were flat. The performance reflected a 5 percent decline at Gap, flat sales at Banana Republic, and growth of 4 percent at Old Navy. That measurement is a key indicator because it strips out the volatility of newly opened and closed locations.
Operating and marketing expenses were lower in the quarter.
The company raised its full year guidance, and now expects to earn $2.95 to $3 per share, reflecting a 5 cents-per-share gain on an asset sale.
For the quarter ended Aug. 2, the company earned $332 million, or 75 cents per share. Not including one-time items, it earned 70 cents per share, or a penny more than Wall Street expected, according to Zacks Investment Research.
A year ago, the company earned $303 million, or 64 cents per share.
Total revenue rose to $3.98 billion, matching analyst forecasts.
Its shares edged up 24 cents to $43.42 in after-hours trading.
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