NEW YORK – Gap Inc. (GPS) said Thursday its preliminary fourth-quarter earnings rose, beating Wall Street's expectations with the help of higher net sales at its Banana Republic chain, and issued an unexpectedly strong 2005 forecast.
San Francisco-based Gap said earnings for the quarter that ended Jan. 29 were $370 million, or 40 cents per share. In the year-ago period, it earned $356 million, or 37 cents per share.
Wall Street analysts on average expected the company to post earnings of 37 cents per share, according to Reuters Estimates.
The company said its results for the fourth quarter and the full year may be adjusted, depending mpany's review of its lease-related accounting. A change in accounting standards has forced many retailers to take similar actions.
Net sales for the quarter were flat compared to last year at $4.9 billion, and sales at stores open at least a year, or same-store sales, fell 3 percent.
Gap's higher-priced Banana Republic (search) chain was the only of its units to post an increase in its net sales for the quarter, which rose to $702 million from $671 million in the year-ago period.
Looking ahead, the company said it expected to earn between $1.41 and $1.45 per share in fiscal 2005, above Wall Street's average forecast of $1.40 per share.
"Going forward, we will focus on driving growth opportunities across our brand portfolio, strengthening operating performance and enhancing shareholder value through cash distributions," Gap Chief Executive and President Paul Pressler said in a statement.