Gap Inc. Income Falls In 3rd Quarter

SAN FRANCISCO (AP) -- Gap Inc., which owns the Old Navy, Gap and Banana Republic clothing chains, said its third-quarter net income fell 1 percent, though increases in online and international sales helped drive revenue up 2 percent.

The San Francisco-based retailer said Thursday its net income was $303 million, or 48 cents per share, for the period that ended Oct. 30. That compares with $307 million, or 44 cents per share, a year earlier.

Earnings per share rose 9 percent despite lower net income because the number of diluted shares fell 11 percent from the same period last year as Gap bought back $1.4 billion worth of shares.

Gap Inc. says its third-quarter revenue rose 2 percent to $3.65 billion.

But revenue at stores open at least a year was flat. The figure is considered a key indicator of a retailer's economic health because it excludes the results from stores that opened or closed during the year. During the quarter, the company opened 25 stores and closed 19.

The figure rose 1 percent for both Gap and Banana Republic in North America but fell 2 percent for Old Navy. It rose 3 percent for the company's stores outside the U.S. and 15 percent for online sales.

Analysts surveyed by Thomson Reuters on average expected earnings of 48 cents per share on revenue of $3.58 billion.

Gap shares fell 49 cents after hours after rising 22 cents Thursday, just more than 1 percent, to close at $20.91.

"We improved the top line and grew our earnings per share this quarter while keeping a clear focus on North America and making strategic global investments, including new market entries in China and Italy," said Gap Inc. chief executive officer Glenn Murphy in a statement.

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