Gap Inc. weathered the promotional climate well in the second quarter, logging gains in profits and sales even as its gross margin declined.
The company also said that it had signed a franchise agreement with Arvind Lifestyle Brand Ltd., a subsidiary of Arvind Ltd., to open stores in India. The first stores will open in the nation’s largest cities, Mumbai and Delhi, by summer 2015 and about 40 Gap stores are planned under the arrangement.
In the three months ended Aug. 2, Gap, the largest U.S.-based apparel specialty chain, recorded net income of $332 million, or 75 cents a diluted share, 9.6 percent higher than the $303 million, or 64 cents, recorded in the comparable 2013 period. Excluding a gain of 5 cents a share for the sale of a building owned but no longer occupied by the firm, adjusted EPS was 70 cents, 1 cent higher than analysts, on average, expected.
Sales in the quarter were up 2.9 percent to $3.98 billion from $3.87 billion a year ago with comparable sales, including those of e-commerce operations, flat versus a 5 percent advance in last year’s quarter.
Gross profit was flat and gross margin retreated to 39.4 percent of sales from 40.5 percent in the year-ago period.
“Building on last year’s strong performance, we are pleased to have grown our sales 3 percent and delivered solid improvement in earnings per share,” said Glenn Murphy, chairman and chief executive officer of the San Francisco-based firm. “We remain focused on our strategic initiatives as we turn our focus toward delivering a strong second half.”
Online sales expanded 11 percent to $515 million, the company said, with the growth rate down from 27 percent in the second quarter of last year.
Gap raised its guidance for full-year profit to a range of $2.95 to $3 a share to reflect the gain on the asset sale.
Year-to-date net income fell 6.9 percent to $592 million, or $1.32 a diluted share, from $636 million, or $1.35, in the first half of 2013. Revenues are up 2.1 percent to $7.76 billion from $7.6 billion.
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye