The bleeding has stopped at Gap Inc. as efforts to reduce expenses and control costs resulted in fourth-quarter and year-end profit gains — despite a sales decline.

Net earnings for the quarter ended Feb. 2 soared 21 percent to $265 million, or 35 cents a diluted share, from $219 million, or 27 cents, in the same period last year on sales that slid 5 percent to $4.68 billion from $4.91 billion. Same-store sales came in with a 3 percent decline.

For the year-end period, net earnings gained 7.1 percent to $833 million, or $1.05, from $778 million, or 93 cents, in the prior year on sales that fell 1 percent to $15.76 billion from $15.92 billion.

“In 2007, the company made the business decisions and changes necessary to deliver improved earnings for our shareholders,” stated Glenn Murphy, chairman and chief executive officer. “While we’re aware of the challenging economic environment, our leadership team is committed to delivering the right product to our customers while we bring a sharp operational discipline to our business priorities. We’ll work tirelessly to reconnect with customers while we continue to improve our earnings results.”

For more, see Friday’s issue of WWD.

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