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Gap’s Better-Than-Expected Results Signal Cost Cuts Paying Off

  • Gross margin beats estimates on freight, fewer discounts
  • Comparable sales fell due to Banana Republic, Athleta weakness
General Views Of A Gap Inc. Store Ahead Of Earnings

Photographer: David Paul Morris/Bloomberg 

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Gap Inc. reported better-than-expected results in the first quarter, showing the retailer’s cost-cutting measures are sparking improved performance. 

Gross margin in the period came in above the average analyst estimate, while adjusted earnings per share were slightly positive, compared with an expected loss. The improvement was due in part to lower air freight expense and fewer discounts, the company said. Gap has also reduced headcount and trimmed expenses.