Even as sales continue to shrink, Gap Inc. said yesterday that second-quarter earnings rose 19 percent, mainly on cost-cutting measures, including the elimination of 2,200 jobs.
Gap also said that its board authorized an additional $1.5 billion for share repurchases, including $250 million that will be bought from Fisher family members.
It is unclear whether the overall stake held by the Fisher family, currently amounting to 34 percent, will change materially, given that the number of shares outstanding will be reduced by the buyback and the Fishers may choose to purchase additional stock in the open market. Gap said the percentage held by the family “could fluctuate up or down or remain the same.”
After the stock market closed yesterday, Gap hosted a conference call with analysts, the first for new Chief Executive Glenn Murphy – the former head of a large Canadian drug store chain whose merchandising skills have been called into doubt.
Gap earned $152 million, or 19 cents a share, compared with $128 million or 15 cents a share, a year earlier.
Sales in the period declined 1 percent to $3.69 billion, as Gap has struggled to get its fashions back on track. Sales at Gap stores open at least a year in North American fell 6 percent in the quarter, following a 6 percent decline in the year-ago period.