Gap Posts Higher Q3 Profit; Cuts FY14 Earnings Outlook

(RTTNews) - Gap Inc. (GPS) reported third quarter net income of $351 million or $0.80 per share, compared to $337 million or $0.72 per share for the year-ago quarter.

The latest quarter results include a non-recurring benefit of about $0.06 from a lower effective tax rate versus the third quarter of fiscal year 2013, mainly due to the recognition of certain foreign tax credits.

Net sales for the third quarter declined to $3.97 billion from $3.98 billion in the third quarter last year.

Analysts polled by Thomson Reuters expected th company to earn $0.79 per share on revenue of $4.04 billion for the third quarter. Analysts' estimates typically exclude special items.

The company updated its earnings per share guidance for the full fiscal year 2014 to be in the range of $2.73 to $2.78, which includes the gain on the asset sale of $39 million communicated in connection with the company's second quarter of fiscal year 2014 financial results. Previously, the company forecast full fiscal year 2014 earnings to be $2.95 to $3.00 per share. Analyst currently expect the company to earn $2.82 per share for the fiscal year 2014.

With an eye towards 2015, Gap also announced the promotion of two successful current executives. Jeff Kirwan, who has served for the past three years as president of greater China for Gap Inc., will become Global President for Gap brand in December following a brief transition period. Kirwan succeeds Stephen Sunnucks, who will leave the company on December 19.

Andi Owen, who currently leads the Gap Outlet division, will become Global President for Banana Republic, effective January 5. She succeeds Jack Calhoun, who will depart from the company on February 1.