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The Gap's Third Quarter Earnings Report
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GPS
The Gap (NYSE:GPS) announced its results for the third quarter on November 15, 2012. The Gap is an international specialty retailer that sells casual apparel, accessories and personal care products for men, women, and children.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: The Gap managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported 63 cents per share versus the 37 cents per share estimate and revenues of $3.86 billion versus the $3.46 billion estimate. EPS rose 65.8% while revenue climbed 7.8% from the same period last year. The Gap's revenue has grown during each of the past three quarters on a year-over-year basis. For the third quarter, the company reported net income of $308 million. According to the reported number, this is up 59.6% from last year's figures.
Management Quote: "We're very pleased with our strong third quarter financial performance, highlighted by how well customers have responded to our product," said Glenn Murphy, chairman and chief executive officer of Gap Inc. "We are ready to compete and win this holiday season as we drive to build upon our top line growth."
A Look Back: Net income has increased 2.3% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 59.6% from the year-earlier quarter.
Looking Ahead: The outlook for the company's results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 48 cents per share, down from 51 cents 90 days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is $1.92 per share, a rise from $1.87 90 days ago.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: The Gap managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported 63 cents per share versus the 37 cents per share estimate and revenues of $3.86 billion versus the $3.46 billion estimate. EPS rose 65.8% while revenue climbed 7.8% from the same period last year. The Gap's revenue has grown during each of the past three quarters on a year-over-year basis. For the third quarter, the company reported net income of $308 million. According to the reported number, this is up 59.6% from last year's figures.
Management Quote: "We're very pleased with our strong third quarter financial performance, highlighted by how well customers have responded to our product," said Glenn Murphy, chairman and chief executive officer of Gap Inc. "We are ready to compete and win this holiday season as we drive to build upon our top line growth."
A Look Back: Net income has increased 2.3% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 59.6% from the year-earlier quarter.
Looking Ahead: The outlook for the company's results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 48 cents per share, down from 51 cents 90 days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is $1.92 per share, a rise from $1.87 90 days ago.
by
Investopedia Staff
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