After the market closed on Aug. 21, shares of The Gap (NYSE:GPS) inched up almost 1% to $43.50 in response to the retailer's management team posting revenue and earnings that exceeded expectations for the second quarter of its 2014 fiscal year. According to its press release, the company's revenue for the quarter came out to $3.98 billion, representing a roughly 3% improvement over the $3.87 billion management reported for the second quarter of its 2013 fiscal year and coming in just a hair above the $3.97 billion analysts anticipated as its store rose 4% year-over-year from 3,428 locations to 3,565. During this timeframe, however, comparable store sales were flat.
|Earnings per Share||$0.64||$0.69||$0.75|
Looking at profits, the situation appears even more favorable for Gap. For the quarter, the company reported earnings per share of $0.75. This represents a 17% jump compared to the $0.64 reported during last year's quarter and came in notably higher than the $0.69 analysts hoped to see. In addition to benefiting from revenue growth, the business enjoyed a 6% drop in share count as well as a drop in its operating expenses from 27% of sales to 25.2%.
In a previous article I wrote on the company, I highlighted that it's not likely to be a growth name anytime soon because of its size and operating history. Although it looks as though I was wrong about how quickly the business may grow moving forward, the case remains that Gap appears to be a good long-term prospect that could serve as a nice safer play in your portfolio.
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