FINANCE

Gap ups outlook on strong Q3

BY Marianne Wilson

San Francisco — Gap Inc. raised its outlook for the year after reporting better-than-expected net income for the third quarter on growing sales. It was the latest sign that the long beleaguered chain may be finally entering a turnaround.

For the three months ended Oct. 27, the company said it earned $308 million, compared with $193 million in the year

For the quarter, net sales rose about 8%, to $3.86 billion, the company. Same-store sales rose 6% in North America. The metric increased 7% at Gap, 6% for Banana Republic and 9% for Old Navy.

Net sales for the online division rose by 23% to $509 million. International sales were up 7%.

"We are ready to compete and win this holiday season as we drive to build upon our top line growth," CEO Glenn Murphy said.

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FINANCE

Sears loss widens

BY Marianne Wilson

Hoffman Estates,Ill. — Sears Holdings Corp.’s third-quarter loss widened amid declining sales and higher tax expenses.

For the quarter ended Oct. 27, Sears reported a loss of $498 million, compared with a year-earlier loss of $421 million.

Revenue slipped 5.8%, to $8.86 billion, primarily due to the effect of having fewer Kmart and Sears stores in operation and lower domestic comparable store sales for the quarter.

Domestic same-store sales declined 3.1%. Same-store sales slipped 1.6% at Sears chain and fell 4.8% at Kmart.

The latest period included an $11 million income tax expense, while the year-ago period included a $91 million tax benefit.

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FINANCE

BDO Survey: Retailers anticipate 3.1% increase in Black Friday sales

BY Marianne Wilson

Chicago — Retailers project a 3.1% increase in sales on Black Friday, according to a survey of top retail chief marketing officers by BDO USA, LLP. This optimism follows last year’s modest projection of 1.6% growth, which preceded record sales over Thanksgiving weekend.

In 2011, Cyber Monday marked the biggest online spending day in history, with sales topping $1.25 billion and retailers expect it will be another banner event this year. CMOs anticipate a 4.3% increase in Cyber Monday sales, the largest projected increase in the survey’s history. The optimism surrounding Black Friday and Cyber Monday aligns with retailers’ broader positivity heading into the holiday shopping season. However, strong Thanksgiving weekend sales will not come without heavy promotions. A majority of CMOs (66%) expect an uptick in discounts and promotions this holiday season.

These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The retailers in the study are among the largest in the country, including 20 retailers in the top 100 based on annual sales revenue.

Other findings include:

  • Email promotions and free shipping are top online sales triggers. Retailers are casting a wide net to reach their customers online and will offer a variety of incentives for online holiday shoppers. Over one-third (34%) of survey respondents cite free shipping as their top tactic to generate online sales, and 31% cite email promotions.
  • Retailers hope to bolster sales with in-store-only deals. When asked which promotional tactic they will focus on to draw customers into their brick-and-mortar locations, most retailers (66%) identify in-store exclusive deals. Despite the emerging trends of exclusive in-store brands and retail partnerships, retailers understand that value remains a top priority for consumers who are looking to stretch their dollars as much as possible during the holiday season.
  • Consumers to receive equal share of online and offline promotions. With more and more consumers expecting a cohesive brand experience across multiple platforms, a plurality (44%) of retailers say they will devote equal efforts to online and in-store campaigns. However, getting shoppers in stores is still a major priority for 41% of retailers, who will focus the majority of their promotional activities on in-store deals.
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