The Gap Misses Q3 Estimates, Shares Fall

The Gap Inc. GPS reported third quarter fiscal year 2014 results Thursday. Total revenue was $3.972 billion, below estimates of $4.04 billion and the $3.976 billion reported in the year-ago period.

Net income was $351 million, or $0.80 per share on a diluted basis, an 11 percent increase over last year.

The company’s diluted earnings per share for the third quarter of fiscal year 2014 includes a non-recurring benefit of about $0.06 from a lower effective tax rate vs. the third quarter of fiscal year 2013, primarily due to the recognition of certain foreign tax credits.

EPS on an adjusted basis was $0.74, below estimates of $0.79.

"As we move into the holiday season, our teams are focused on delivering unique customer experiences which will differentiate our portfolio of brands in the marketplace,” said Glenn Murphy, chairman and chief executive officer, Gap Inc.

The company updated its diluted earnings per share guidance for the full fiscal year 2014 to be in the range of $2.73 to $2.78, which includes the gain on the asset sale of $39 million communicated in connection with the company’s second quarter of fiscal year 2014 financial results.

The Gap traded at $38.47 in the after-hours session, down 4.1 percent.