Gap Profit Down - Update

(RTTNews) - Apparel retailer Gap Inc. (GPS), on Thursday reported a decline in profit for the fourth quarter, hurt largely by some continued weak sales at its namesake brand and Banana Republic. Earnings for the quarter were in line with Wall Street estimates, while revenues fell short of expectations.

San Francisco-based Gap's fourth-quarter profit dropped to $214 million or $0.53 per share from $319 million or $0.75 per share last year.

Gap's adjusted earnings for the quarter were $0.57 per share. Analysts polled by Thomson Reuters had a consensus earnings estimate of $0.57 per share for the quarter.

Sales for the quarter dropped to $4.39 billion from $4.71 billion last year. Analysts had expected revenues of $4.46 billion for the quarter.

Gap's comparable sales for the quarter declined 7 percent, compared with a positive comps of 2 percent last year, as same-store sales at Gap slumped 6 percent and Banana Republic dropped 10 percent, Meanwhile, Old Navy reported a flat same-store sales.

CEO Art Peck said, "We made significant progress in 2015 transforming our product operating model, enabling us to be more responsive to trends and market conditions, and consistently deliver on-brand product collections."

Looking forward to full year 2016, Gap expects earnings of $2.20 to $2.25 per share. Analysts currently estimate earnings of $2.42 per share.

Further, Gap also approved a new $1 billion share repurchase authorization for the company's common stock. The company also declared first-quarter dividend of $0.23 per share, payable on or after April 27 to shareholders of record on April 6.

GPS closed Thursday's trading at $27.60, up $0.32 or 1.17%, on the NYSE. The stock, however, dropped $0.80 or 2.90% in the after-hours trade.