Gap strong in Q2, raises outlook
Gap Inc. beat the Street in its second quarter with both bottom and top line gains, boosted by its Old Navy division and fewer discounts.
The apparel retailer earned $271 million net income, or 68 cents per share, in the quarter that ended July 29. That's up from $125 million, or 31 cents per share, a year ago.
Excluding a one-time insurance gain related to a fire in 2016 at a Gap distribution center in Fishkill, New York, the retailer earned 58 cents per share. Analysts has expected earnings per share of 52 cents.
Total revenue fell 1.4% to $3.8 billion, just edging past analysts' estimate of $3.77 billion. (The translation of foreign currencies into U.S. dollars negatively impacted the company’s net sales for the second quarter of fiscal year 2017 by about $37 million.)
Same-store sales edged up 1% for their third consecutive quarterly increase. By brand, same-store sales rose 5% at Old Navy Global and fell 1% at Gap Global. Same-store sales fell 5% at Banana Republic Global.
“With a third consecutive quarter of comp sales growth, we are seeing our investments in product, customer experience, and brand equity begin to pay off,” said Art Peck, president and CEO, Gap Inc. “Based on the strength of the first half, we are pleased to increase our full year earnings guidance.”
Looking ahead, Peck said the company will focus on product categories that have clear differentiation. It also will continue to invest in its online and mobile offering, and take advantage of its operating scale to drive speed to market and responsiveness.
Gap raised its adjusted profit forecast for fiscal 2017 to $2.02 to $2.10 per share from $1.95 to $2.05 per share.
The company ended the quarter with 3,642 store locations in 47 countries, of which 3,179 were company-operated.
Two high-profile Walmart acquisitions will find a home on jet.com
A discount giant is using its newest acquisitions to connect with its millennial shoppers.
During an earnings call, Walmart revealed that it’s trendy, upscale Bonobos or ModCloth brands will soon be sold via jet.com. This move highlights how Walmart plans to leverage its Jet division to target the millennial shopper, according to Business Insider.
Unlike Walmart’s goal to appeal to most demographics, company spokesperson Randy Hargrove said in the report that "The Jet customer demographic —millennial, urban, higher income — aligns well with the demographics of ModCloth and Bonobos.”
They also align well with Jet’s other millennial-focused brands and lines, including La Croix seltzer, fresh produce, and ethical cleaning products.
The retailer added that Bonobos or ModCloth product will likely not see the inside of a Walmart store in the near future, the report said.
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Target unveils three new brands
Target Corp. is giving shoppers an early look at three new private brands that will debut in its stores starting in late August.
The retailer has posted details about the brands, along with photos from their look books, on its website. The three new collections are part of 12 private-label brands Target plans to launch during the next 18 months.
Here is a look at the three brands:
A New Day
Apparel and footwear from this contemporary women's fashion brand will arrive in late August with jewelry and accessories launching in September. New designs across all categories will be introduced monthly.
Goodfellow & Co.
This men's apparel and accessories brand is described as "core wardrobe essential with a modern take on classic themes." Available in a range of sizes, including big and tall, it hits the stores in September, with new items dropping throughout the fall.
Featuring modern home pieces, this brand is focused on "making environments effortlessly functional through smart solutions for urban, small-space living." It arrives on Sept. 19, with collection refreshes continuing throughout the year.
"These brands are the perfect example of what makes Target 'Tar-zhay.' Each offers incredible design, great quality and truly unbeatable value. That’s something you can find only at Target,” said Mark Tritton, Target’s executive VP and chief merchandising officer.