Gap Profit Up on Cost Controls; Same-Store Sales Fall
San Francisco Gap Inc. said on Thursday that first-quarter net profit rose 40% on tighter inventories and fewer markdowns despite lower sales as the global apparel retailer attempts a turnaround.
First-quarter net income increased to $249 million from $178 million a year earlier. Sales fell to $3.38 billion from $3.55 billion.
Same-store store sales for the quarter fell 11%, compared with a decrease of 4% in the first quarter of the prior year.
The company’s online sales for the first quarter increased 21% to $236 million, compared with $195 million for the first quarter of last year.
“We are pleased with our first-quarter results, as we delivered solid earnings growth in a difficult environment,” said Glenn Murphy, chairman and CEO of Gap Inc. “Looking ahead, we are focused on bringing compelling product and shopping experiences to our customers while managing costs tightly.