May 23, 2013 / 8:11 PM / 6 years ago

Gap profit soars; Aeropostale first quarter sales plummet

A Gap retail store is shown in San Francisco, California, May 8, 2013. REUTERS/Robert Galbraith

(Reuters) - Gap Inc (GPS.N) reported a higher first-quarter profit on Thursday, helped by a rise in same-store sales at its Old Navy and namesake chains, and growth in Asia.

Gap has staged a comeback in the last few years, offering hipper fashions that have found favor again with shoppers that in the interim had flocked to Zara parent Inditex SA (ITX.MC) and homegrown competitors such as Forever21.

The company, which also owns Banana Republic, posted net income of $333 million, or 71 cents per share, for the quarter ended May 4, up 42.9 percent from $223 million, or 47 cents per share, a year earlier. That was two cents better than Wall Street forecasts, according to Thomson Reuters I/B/E/S.

Despite the rise in profit, Gap stuck to its forecast and still expects a profit for the year of $2.52 to $2.60 per share.

Gap shares, which earlier this week hit a 52-week high, slipped 1.1 percent in after-hours trading to $40.90.

As previously reported, overall sales for the quarter rose 6.9 percent to $3.73 billion, while sales at stores open at least a year rose 2 percent.

The company gets 86 percent of its revenue in North America, and has been pushing into new international markets. But results have been mixed.

Sales in Europe, where shoppers have been cutting back on spending, were flat, while in Asia, revenue rose 14.7 percent. Gap is pushing its namesake chain in the Chinese market and Old Navy in Japan.

Elsewhere, struggling teen retailer Aeropostale Inc ARO.N, which competes with Gap, said its first quarter same-sales fell 14 percent, blaming poor weather and a tough economy, and reported a loss as it resorted to deep discounts to sell merchandise. Shares fell 3.2 percent in after-hours trading.

Reporting by Phil Wahba in New York; Editing by Bernard Orr

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