FINANCE

Gap raises outlook as Q2 profit surges 25%; bringing Old Navy to Shanghai

BY Marianne Wilson

San Francisco — A resurgent Gap Inc. reported that its second quarter profit jumped 25% on strong sales of denim and other goods at its namesake and Old Navy brands. And bucking a trend set by other retailers, the company raised its full-year earnings guidance. Gap also detailed upcoming expansion plans.

“We delivered strength in both our top and bottom lines this quarter,” said Glenn Murphy, chairman and CEO of Gap. “As we move into the second half of the year, we remain focused on growing revenue and driving continued momentum across our portfolio of brands.”

Gap earned $303 million for the quarter ended Aug. 3, up from $243 million in the year ago period.

Revenue increased 8.1 % to $3.87 billion, in line with Wall Street expectations. Same-store sales rose 5%, with 6% gains at Gap and Old Navy and a 1% decline at Banana Republic.

In line with its strategy to expand Old Navy internationally, Gap said it will open the brand’s first store in Shanghai and launch an Old Navy e-commerce site in China in the first half of 2014.

The company also announced that it is bringing the Gap brand to Taiwan with its first store opening in the first half of 2014, along with a Gap e-commerce site.

With regards to its newest U.S. format, Athleta, the retailer said it opened six Athleta stores in the second quarter, for a total of 46 stores. It’s on track to end fiscal 2013 with about 65 stores.

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Weather Trends: September 2013

BY CSA STAFF

The National Retail Federation definition of September 2013 shifts the month one week later in the calendar when compared to 2012. This shift introduces a significant cooler bias in the forecast. Therefore, while the nation on a year-on-year basis trends cooler, most of that will be due to a calendar shift and not a change in the weather. Conditions are expected to be similar to 2012 when the shift is removed. There looks to be a bit of a lull in hurricane activity heading into the early part of the month in the Atlantic, but activity is expected to pick up during the second half of the month. The eastern Pacific, however, looks to be quite active with a storm or two possibly bringing heavy rain, and possibly flash flooding, all the way into the Southwest U.S. Typical fall back-to-school categories will do well earlier in the month. Although year-on-year demand for summer categories will be softer, the forecast still points towards a warmer than normal scenario in the west. Thus, typical summer categories will once again have an extended season in this region.

Weather Trends International offers year-ahead business weather forecasts and intelligence to hundreds of major retailers, suppliers, and we also support many commodity/energy traders. We offer an unparalleled competitive advantage by helping our clients proactively plan for the weather up to a year in advance. For more information on what we can do for you, please contact Jack Grum [email protected] or call 610-807-0118.

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Michele Gloecker talks multiplier effect and raw materials

BY CSA STAFF

Walmart’s SVP of Home Michelle Gloeckler may not have been among those on stage at the retailer’s domestic sourcing summit, but she is the one leading the execution of massive initiative.

Gloeckler was tapped to head the program earlier this year after Walmart recognized the economics of global manufacturing had become to change in such a way that domestic manufacturing was beginning to make more sense. Click here to see what she told Bloomberg television.

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