Gap’s Q3 Profit Falls 36% (GPS)

Gap Inc. (NYSE: GPS), the San Francisco, California-based specialty retailer, after-market close reported a 36% drop in its third-quarter profit as the company continued to lose market share.

Gap, whose brands include Gap, Old Navy, Banana Republic, Piperlime and Athleta, has fallen off shoppers’ list lately. The retailer has been trying to make a come back by revamping its stores and merchandise, but it has found the going tough so far.

For the third quarter ended October 29, Gap reported a profit of $193 million, or $0.38 per share, down from $303 million, or $0.48 per share reported for the same period in the previous year. The company sales for the quarter fell 2% to $3.59 billion. Sales at the retailer’s namesake stores, which account for almost 25% of total sales, dropped 3% in the third quarter.

Analysts were expecting Gap to report a profit of $0.36 per share and revenue of $3.61 billion.

Glenn Murphy, Chairman and CEO of Gap, said that the company is intensely focused on improving its current sales trend across its brands. Murphy said that the company is making necessary product and marketing adjustments, with a view toward building momentum as it heads into 2012. Murphy added that the company is ready to compete aggressively this holiday season.

Gap, meanwhile, reaffirmed its fiscal 2011 earnings guidance of $1.40-$1.50 per share.

Gap shares have risen marginally in after-hours trading today following the release of third-quarter financial results. At last check, the stock was 0.26% higher at $19.30 in after-hours trading. Earlier, in regular trading, Gap shares fell 1.18% to $19.25.

Gap shares have gained more than 17% in the last three months, compared with a gain of 1.86% for the S&P 500. Year-to-date, however, the stock has underperformed the broad market, falling 13.05%, compared with a decline of 3.29% for the S&P 500.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.