A Gap store in San Francisco, where the retail clothing giant is based. (Paul Morris, Bloomberg )
Clothing retailer Gap Inc. reported a nearly 29% jump in second-quarter profit as shoppers flocked to its stores to pick up trendy apparel.
For the three months ended July 28, the company reported net income of $243 million, or 49 cents a share, up from $189 million, or 35 cents a share, in the same period a year ago. Sales climbed 5.6% to $3.58 billion.
The San-Francisco retailer, parent company of Banana Republic, Old Navy, Athleta and its namesake stores, has been pushing a turnaround after struggling for years as consumers turned to hipper rivals.
But Gap has recently been sprucing up some stores and closing others, while focusing on of-the-moment clothing such as printed denim. The strategy seems to be luring shoppers back.
"Customers responded well to our product offerings across our brands, driving a healthy increase in sales and earnings per share during the quarter," said Chief Executive Glenn Murphy. "Our continued focus on product and store execution are helping to drive positive momentum."
Same-store sales, an important measure of a retailer's health because they exclude the effect of store openings and closings, climbed 4%, bolstered by growth in North American shops. International same-store sales fell 5%.
The retailer raised its profit forecast for the full year to $1.95 to $2 a share, up from $1.56 in fiscal 2011.
Gap said last fall that it would close nearly 200 stores and downsize others in the U.S. to cut costs and focus on international expansion. The retailer continues to expand its Gap stores in China and opened its first Old Navy shop outside North America in Tokyo last month.
The retailer is also shaking up its ranks, bringing back Tracy Gardner, a former Gap employee, as its creative advisor. The company also appointed a former H&M executive, Stef Larsson, to take over as president of Old Navy by October.