Gap Posts Strong April Comps

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Gap Inc. (GPS) reported comparable-store sales (comps) increase of 7% for the 4 weeks ended May 4, 2013 compared with a 2% decline registered for the 4 weeks ended May 5, 2012, driven by strong results at its namesake Gap and Old Navy stores. Moreover, net sales in April totaled $1.21 billion, up 5% compared with the prior-year period sales of $1.15 billion.

Global brand-wise, comps performances at Gap Global were up 8% compared to a 1% increase in the prior-year period, while comps at Banana Republic were up 1% compared to flat comps recorded last year. Old Navy’s comps increased 9% versus a 6% decline in April last year.

For the first quarter of fiscal 2013, the company’s net sales increased 7% to $3.73 billion compared with $3.49 billion in the prior-year period. During the quarter comps rose 2% compared with a 4% increase in the year-ago quarter.

Brand-wise, first quarter comps at Gap Global increased 3% compared to a 2% rise in the prior-year period, while comps at Banana Republic Global remained flat compared to 5% rise last year. Old Navy Global’s comps rose 3% versus a 4% increase last year.

Based on strong sales results, the company expects first quarter earnings per share in the range of 68 cents – 69 cents, compared with 47 cents reported in the year-ago quarter.

Recently, 3 other retailers – Zumiez Inc. (ZUMZ), Ross Stores Inc. (ROST) and Buckle Inc. (BKE) – reported comparable-store sales increase of 4.6%, 7% and 6.2%, respectively for the month of April.

This Zacks Rank #2 (Buy) company is scheduled to release its first-quarter results on May 23, 2013 and May sales results on Jun 6, 2013.

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