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Gap’s Earnings Beat Estimates, Helped by International Sales

Gap’s Earnings Beat Estimates, Helped by International Sales
Gap Inc. merchandise is displayed at the company's flagship store in Shanghai. Photographer: Qilai Shen/Bloomberg

Feb. 24 (Bloomberg) -- Gap Inc., the largest U.S. apparel chain, posted a 3.7 percent gain in fourth-quarter profit, beating analysts’ estimates, as international sales spurted.

Net income rose to $365 million, or 60 cents a share, in the three months ended Jan. 29, from $352 million, or 51 cents, a year earlier, the San Francisco-based retailer said today in a statement. Analysts predicted 57 cents, the average of 25 estimates compiled by Bloomberg.

International revenue jumped 12 percent in the quarter after Chief Executive Officer Glenn Murphy added stores overseas and closed them in North America. Gap said today that it plans to open 50 company-owned stores this year internationally, including in China and Italy. The retailer has 353 owned stores outside the U.S., out of a total 3,068.

Gap rose 2.3 percent to $23 at 4:31 p.m. after regular trading on the New York Stock Exchange. At the session’s close, the shares had gained 1.6 percent this year.

The company said fourth-quarter revenue climbed 3 percent to $4.36 billion. International sales increased 12 percent to $620 million. Sales at stores open at least a year were little changed. In North America, Banana Republic and Old Navy each posted a 1 percent gain, while the Gap brand had a 2 percent decline.

Gap also said its board approved a $2 billion share repurchase plan and raised its annual dividend by 13 percent to 45 cents in 2011.

The company forecast full-year net income of $1.88 to $1.93 a share for the fiscal year that began last month. Analysts on average had projected $1.93.

(Gap will hold a conference call at 5 p.m. New York time. To listen, visit EVTS <GO>.)

To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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