Gap Inc (NYSE: GPS) gained ground on stock markets Friday after the company reported better-than-expected results for its fourth quarter and issued a strong FY18 forecast.
The San Francisco-based clothing store chain said Thursday that, on a reported basis, the company’s diluted earnings per share were $0.52 for the fourth quarter of fiscal year 2017 and $2.14 for fiscal year 2017, which includes $34 million of provisional net tax impacts related to tax reform as a result of the enactment of the U.S. Tax Cuts and Jobs Act of 2017.
Excluding the net provisional impacts related to tax reform and the second quarter benefit from insurance proceeds related to the Fishkill fire of $64 million, the company’s adjusted diluted earnings per share were $0.61 for the fourth quarter of fiscal year 2017 and $2.13 for fiscal year 2017, inclusive of the 53rd week, compared with fourth quarter and fiscal year 2016 adjusted diluted earnings per share of $0.51 and $2.02, respectively.
The company noted that foreign currency fluctuations negatively impacted adjusted earnings per share for fiscal year 2017 by an estimated $0.08, or about four percentage points of earnings per share growth on an adjusted basis.
Said Gap CEO Ted Peck "Our strong positive comp and margin expansion during the critical holiday quarter affirms our balanced growth strategy,” said Art Peck, president and chief executive officer.
"Our outlook for 2018 demonstrates confidence in our strategy and a meaningful step up in earnings capacity for the company."
Gap shares gained $2.22, or 7%, in Friday’s last hour of trading to $33.92.
