Ubiquitous mall retailers Gap Inc. (NYSE: GPS) and Aeropostale Inc. (NYSE: ARO) both reported Thursday that their profits increased in the first quarter despite the weak economy.
San Francisco-based Gap said it boosted its earnings by tightly managing costs and inventory. Profit for the quarter ended May 3 rose 40% to $249 million, or 34 cents per share, from $178 million, or 22 cents per share, in the same period last year. However, revenue fell 5% to $3.38 billion as same-store sales fell 11%.
Analysts polled by Thomson Financial had predicted a profit of 30 cents per share on revenue of $3.42 billion.
The Gap reaffirmed its 2008 guidance of earnings between $1.20 and $1.27 per share, while analysts expect $1.25 per share.
Shares rose 22 cents, or 1.2%, to close at $18.29 Thursday, and climbed an additional 31 cents in after-hours trading.
New York-based Aeropostale's first-quarter profit rose 27% to $17.5 million, or 26 cents per share, from $13.8 million, or 18 cents per share, in the same quarter a year ago. Revenue rose 22% to $336.3 million from $275.8 million. Same-store sales rose 10% in the quarter.
Analysts polled by Thomson Financial had expected a profit of 25 cents per share on revenue of $332.3 million.
Shares fell 3 cents to close at $32.72, and declined another 72 cents, or 2.2%, after hours. Shares have risen 23.5% since the beginning of the year, reaching a 52-week high of $36.02 last week.
Another favorite of malls everywhere, Foot Locker Inc. (NYSE: FL), didn't fare as well. Foot Locker's first-quarter profit fell, hurt by an impairment charge and nearly flat sales. Shares fell 1.5% Thursday, but rebounded after hours.
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