Watch CBSN Live

The Gap, Kmart Rack Up Profits

Retail powerhouses The Gap and Kmart racked up earnings gains Thursday morning.

San Francisco-based The Gap (GPS) posted a third-quarter profit of $238 million, or 60 cents per share, compared with $165 million, or 40 cents a year ago. Analysts surveyed by First Call expected the company to earn 54 cents a share.

Enter a ticker symbol

Symbol Lookup
Troy, Mich.-based Kmart Corp. (KM) said its third-quarter earnings were $38 million , or 8 cents per share, vs. $18 million , or 4 cents, in the year-ago period. The results were in line with expectations.

Shares of The Gap rose 13/16 to 69 1/2. Kmart rose 9/16 to 16 1/4. The S&P Retail Index slipped 0.1 percent to 729.5.

The Gap's net sales grew 36 percent to $2.4 billion vs. $1.8 billion in 1997.

Same-store sales grew 13 percent vs. 9 percent growth last year.

"All of our divisions - Gap, Banana Republic, Old Navy, and International - contributed to the strong results for the quarter," Gap CEO Millard S. Drexler said in a statement. "Even more importantly, our growth came against very difficult comparisons as we achieved our best third quarter results ever."

Kmart said total sales were $7.6 billion, an increase of 4.5 percent from $7.3 billion last year.

Same-store sales grew 4.2 percent for the quarter.

"With our tenth consecutive quarter of increased earnings per share, the turnaround at Kmart continues on track," Kmart CEO Floyd Hall said in a press release.

"Sales increases in consumables and hardlines areas, such as pharmacy, health and beauty care, and home-related items, offset weakness in apparel caused by unseasonably warm weather in late September and October."

In other retailer earning reports:

Nordstrom, the specialty fashion retailer, rang in third-quarter earnings a penny above analysts' expectations.

4Nordstrom (NOBE) said third-quarter earnings rose to 27 cents per share from 23 cents a year ago. Analysts surveyed by First Call expected the company to earn 26 cents per share in the quarter.

Net income rose to $38.7 million from $36.1 million a year ago, whil net sales grew to $1.094 billion from $1.089 billion a year ago.

Despite the earnings gains, Nordstrom said its same-store sales fell 4.2 percent during the quarter.

CEO John Whitacre said despite a "difficult sales environment," the company was able to manage inventory and control expenses.

"We anticipated a challenge in the third quarter with respect to comparable-store sales, and believed that increased focus on inventory relative to sales levels would position us well as we head into the fourth quarter," said Whitacre in a press release

During the quarter, Nordstrom said it repurchased 5.6 million shares under the company's buyback plan.

Written By Steve Gelsi

View CBS News In
CBS News App Open
Chrome Safari Continue