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Despite the change in consumer spending and competition from E-retailers, $GPS sales edged up 1% to $3.84Bil during the third quarter of 2017. Sales from U.S. grew 3% YoY and accounted for 79% of total sales. Global comp sales grew 3% with Old Navy Global comp sales growth of 4% in 3Q17.
$GPS stated that in terms of marketing, the company does traditional marketing with print and TV along with digital, which forms a large part. The company believes there is continued opportunity given the returns it is seeing from its marketing mix in terms of customer acquisitions or conversions and it is focused on supporting its brands.
During 2Q17, $GPS’ comparable sales were up 1%. Old Navy delivered a positive 5% comp. This is against a flat comp last year and is driven by positive AUR and conversion. Gap Global comp was negative 1% against the negative 3% last year. Banana Republic comp sales were down 5% against the negative 9% last year.
$GPS updated its reported diluted EPS guidance for FY17 to $2.12-2.20. Adjusted diluted EPS is expected to be $2.02-2.10. $GPS expects comparable sales to be flat to up slightly. Net sales for FY17 are expected to be slightly below this range driven by an expected negative FX impact YoY as well as the impact from international closures in FY16.
$GPS reported an increase in 2Q17 earnings. Net income was $271MM or $0.68 per share compared to $125MM or $0.31 per share in 2Q16. Adjusted EPS was $0.58 in 2Q17. Net sales were $3.80Bil compared with $3.85Bil last year. Comparable sales were up 1% versus a 2% decrease in the prior-year period.
$GPS is pleased with its penetration in ecommerce and believes it has a market share opportunity here. This varies widely across the brands. The company sees a significant opportunity in this area and believes data analytics will play an increased role in the future.
$GPS is seeing positive AUR across the brands and positive sales over traffic trends which are indicators of increasing product acceptance across the brands. This helps in driving the growth and profitability of the business. In athletics, $GPS is seeing strong store and online performance and it is bullish about this business and sector.
Clothing retailer $GPS reported net income of $143MM, or $0.36 per share in 1Q17, compared to $127MM, or $0.32 per share in the year-over period. The earnings were helped by a 2% increase in comparable sales. Meanwhile, net sales for the quarter were flat at $3.4Bil.