The Gap Inc.

Strong Back-to-School Sales

Old Navy sales rose 4% in August, which lead to net sales of $1.12 billion for the month of August. Sales are down slightly, from $1.14 billion, last year, but considering the retail environment this is quite encouraging.

A Non-Surprise Surprise

The sales report came on the heels of the last quarterly announcement, which said earnings per share were 33 cents, a penny higher than the same period last year and the Zacks Consensus Estimate. While it is an earnings surprise, The Gap has beaten expectations in all but 1 quarter in the past 5 years. In late 2005 the company met expectations.

Estimates Still Rising

In the past month, 19 of 25 analysts polled by Zacks have increased their outlook for the full-year. The average estimate is now $1.35, up from $1.24. The Zacks Consensus for next year is $1.46, up from $1.33.

The Chart

After the recent success, shares of GPS are now trading at a 2-year high.

Read the June 26th Feature Here

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Read the full analyst report on GPS