WASHINGTON – NEW-HOME SALES FALL: New-homes sales fell to a seasonally adjusted rate of 284,000 homes sold in January, the Commerce Department said. That's less than half the 600,000-a-year-pace that economists say is healthy. Bad winter weather likely contributed to the decline.
WEAK HOUSING SECTOR: The dismal annual pace in January follows the worst year for new-home sales in nearly a half-century, and the fifth straight year of declining sales.
ECONOMIC IMPACT: On average, each new home built creates the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
SAN FRANCISCO (Reuters) – Gap Inc (GPS.N) posted a rise in quarterly profit on Thursday that beat the expectations of analysts and boosted its dividend as the apparel retailer strives to spur sales growth at its main casual chain.
The operator of the Gap, Old Navy and Banana Republic brands also gave a 2011 profit outlook that was above Wall Street's average estimate.
Gap said the focus in 2011 would be to continue remodeling its large Old Navy stores, focusing on a smaller format, while opening company-owned and franchise stores abroad.
Net income in Gap's holiday fourth quarter rose 3.7 percent to $365 million, or 60 cents per share, from $352 million, or 51 cents per share, a year earlier.
Analysts, on average, had expected earnings of 57 cents per share, according to Thomson Reuters I/B/E/S.
As previously reported, revenue rose nearly 3 percent to $4.36 billion, as same-store sales, a key measure of retail performance, were flat.
A turnaround in the company's main Gap chain has been slow in coming and the head of that casual brand was recently replaced.
Gap has been revitalizing its merchandise to spur shopper loyalty, but sales have remained inconsistent, despite improvements, and Chief Executive Glenn Murphy has expressed frustration.
Although Gap shares have been rising since the beginning of
the year, they have not reached the nine-year high of $26.21 gained in April of last year as the stock market rallied and confidence grew in the economic recovery.
The company faces intense competition from a host of retailers selling casual American fashion and some analysts say its stores are too large and its fashion inconsistent.
Sourcing costs will drive down operating margins during fiscal 2011, Gap said. The higher price of cotton and petroleum-based synthetics has increased the cost of making garments for all apparel makers.
Still, Gap gave a 2011 profit outlook that was above Wall Street's estimates. It said 2011 earnings would range between $1.88 and $1.93 -- above the $1.86 expected by analysts.
Also on Thursday, department stores Macy's Inc (M.N) and Kohl's Corp (KSS.N) posted gains in fourth-quarter profit that were better than expected and in line with expectations, respectively.
Old Navy, which sells lower-cost fashions to families, has been remodeling its stores to a smaller and easier-to-shop format. It said some 400 stores would be remodeled by the end of 2011.
Moreover, the company will open about 50 company-owned stores internationally -- including 10 to 15 new stores in China -- and about 75 franchise stores during the year.
Capital expenditures in 2011 will increase to about $575 million from $557 million last year due to the international store openings and Old Navy remodels.
Gap increased its quarterly dividend to 45 cents per share for fiscal 2011 from 40 cents per share in 2011.
(Reporting by Alexandria Sage; editing by Andre Grenon)
SAN FRANCISCO – Gap Inc. says its fourth-quarter net income rose nearly 4 percent as slightly stronger sales at its higher-priced Banana Republic stores made up for continued weakness at Gap brand stores.
The company is buying back $2 billion in shares and raising its annual dividend by 5 cents.
It said Thursday that its quarterly net income rose to $365 million, or 60 cents per share. That compares to $352 million, or 51 cents per share, a year earlier. Revenue rose 3 percent to $4.36 billion. Analysts expected $4.34 billion.
Revenue for the Gap brand fell nearly 2 percent; for Old Navy, it edged down less than 1 percent. Banana Republic revenue rose nearly 2 percent.
The company expects 2011 net income of $1.88 to $1.93 per share. Analysts expect $1.94.