Gap Inc. (GPS) recently posted their financial results for the fourth quarter of the 2014 fiscal year. The company that is based in San Francisco, California saw their shares rise by 1.8 percent during after-hours trading thanks to the fact that their figures for earnings for Q4 were better than analysts or the market expected.
Thus, Gap reported they had generated earnings for the quarter of $319 million, equating to earnings per share of $0.75. This is compared to the previous year, when the company achieved $307 million in profits, which worked out to earnings per share of $0.68 at the time.
The company saw their sales increase by 3 percent from $4.58 billion in the same quarter of the previous year to reach $4.71 billion for this quarter. In terms of comparable sales, the company saw growth of 2 percent for Q4, compared to a 1 percent rise for last year.
Overall online sales increased from $698 million during the same timeframe of the previous year to $792 million for the most recent quarter.
The board of Gap approved the implementation of a share repurchase program worth $1 billion. They also increased the dividend per year to $0.92 per share from $0.88 per share.
Operating costs increased from $1.07 billion during the same quarter of the previous year to $1.14 billion for this quarter. Marketing costs, however, saw a slight drop, coming in at $178 million for the quarter.
Gap closed out the 2014 fiscal year with cash and cash equivalents of $1.52 billion. During Q4, Gap spent $148 million on buying back 3.7 million shares at an average of $40 per share.
Art Peck, the Chief Executive Officer of Gap Inc., stated that team plans to continue executing their global strategy for growth, which will include innovation in terms of digital capabilities as well as making the changes required to keep offering a product that aligns with the brand vision and creates an emotional connection with customers, as that is precisely what clients expect from all Gap brands.
For the entire year, Gap is expecting to generate earnings per share between $2.75 and $2.8, compared to analysts’ expectations, which are for $3 per share. The company’s estimates, however, also includes a $0.16 negative effect caused by fluctuations in currency rates, as well as a negative impact of $0.13 caused by West Coast ports receiving merchandise with delays.
Gap saw their shares advance by 1.83 percent, thus reaching $41.11 during after-hours trading. The company has been trading between $35.46 per share and $46.85 per share over the past 52 weeks. Gap has a market cap of $17.62 billion and a price to earnings ratio of 14.65.