Gap Beats Q3 EPS Estimates; Announces $1B Buyback (GPS)

The Gap Inc. (GPS) reported its third quarter earnings results after the closing bell on Thursday.

GPS Earnings in Brief

-Gap posted quarterly earnings of $0.72 per share, beating analyst estimates of $0.71 and a 14% increase from a year prior.
-Revenues came in at $3.98 billion, in line with the consensus estimate.
-Net sales increased 3% in the third quarter, while comparable sales rose 1%.
-Gap’s full year earnings per share guidance was reaffirmed at $2.57 to $2.65.

CEO Commentary

Gap Chairman and CEO, Glenn Murphy commented on the company’s quarterly performance: “This quarter marks our seventh consecutive quarter of positive comp sales growth. We are pleased to maintain our momentum of growing sales and earnings per share this quarter.”

Buyback Plan and Dividend

Gap’s board of directors also announced today that it has authorized up to $1 billion in additional repurchases of its common stock, emphasizing the company’s commitment to returning excess cash to shareholders.

This comes after the company recently raised its annual dividend per share by one-third, from $0.60 to $0.80. The stock now yields 1.91% based on Thursday’s closing price of $41.86. The next dividend will be paid on January 29, 2014 to shareholders of record on January 8, 2013, with an ex-dividend date of January 6, 2014.