* Q3 profit up 60 percent
* Q3 EPS $0.63 vs est $0.63
* Raises FY EPS view to $2.20 to $2.25; est $2.27
* Shares up 3 percent
By Nivedita Bhattacharjee
Nov 15 Gap Inc posted a bigger quarterly
profit on Thursday and quelled fears of a possible slowdown
ahead of the holiday season as the retailer raised its profit
view for the year, sending its shares up 3 percent after the
The owner of the Gap, Old Navy and Banana Republic chains
expects to earn between $2.20 to $2.25 a share, up from its
August forecast of $1.95 to $2.
Wall Street was expecting it to make $2.27 a share,
according to analysts surveyed by Thomson Reuters I/B/E/S.
"When you're giving guidance, what's the point of being wrong
on the upside? I think they are giving conservative guidance,"
said retail consultant Jan Kniffen.
"The stock's traded up because people were concerned about a
slowdown in sales last month and thought it might be affecting
their quarterly numbers," he said.
The company missed October same store sales estimates, after
topping them for many months before that.
Gap has staged a turnaround after a decade of critics
derided its fashions as boring and it lost out to rivals such as
Zara parent Inditex SA and homegrown competitors such
Banana Republic's tie-in with television show Mad Men was a
big success. Redoing Gap's classic Khakis in bright colors
proved to be a crowd pleaser.
The company said all three brands posted positive comparable
sales in North America, with Old Navy rising 9 percent.
For the third quarter, Gap earned $308 million, or 63 cents
a share, compared with $193 million, or 38 cents a share, in the
same quarter last year. Analysts were expecting the company to
earn 63 cents.
Sales for the third quarter ended Oct. 27 rose 8 percent to
Gap shares were trading up at $34.21 after the bell. They
closed at $33.26 Thursday on the New York Stock Exchange.