NEW YORK (AP) — Gap Inc. raised its outlook for the year after reporting bigger third-quarter net income that beat Wall Street expectations on Thursday.
The San Francisco-based clothing retailer said an uptick in sales at its Banana Republic, Old Navy and namesake stores helped lift its net income by 60 percent for the period. The performance is the latest sign that the company may be in turnaround mode, fueled by strong marketing and a revamping of its products.
CEO Glenn Murphy said in a conference call with analysts that Gap was continuing its transformation from an "American-centric" company to more of a global brand. For example, the company opened its first Gap Outlet store in China and an online business in Japan during the quarter.
Last month, Gap also announced a management overhaul aimed at enabling it to respond more quickly to changing tastes around the world. The change, to take effect in February, will put the North American, international, online, outlet and franchise divisions under a single global executive for each of the company's brands. The company is also forming a new innovation and digital strategy team to further advance its efforts in that area.
For the quarter, the company said revenue at stores open at least a year for the period rose 6 percent in North America. The figure is a key measure of a retailer's health, because it excludes the volatility of newly opened and closed locations. The figure rose 7 percent at Gap, 6 percent for Banana Republic and 9 percent for Old Navy, after each of the brands logged declines in the year-ago period.
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