With motivating second quarter 2014 financial results, The Gap Inc. (NYSE:GPS) has raised its earnings guidance for fiscal 2015 to $2.95-$3.00. The company reported financial results for second quarter on August 21, 2014 and as per its expansion plans; the company is planning to open up to 40 new stores in India.
According to the Global President of the Gap Inc (NYSE:GPS), Steve Sunnucks,
“India is an emerging, vibrant market and an important next step in our global expansion strategy.”
The company plans to partner with a local textile manufacturer, Arvind Lifestyle Brand Ltd, and the company will launch its first stores in major Indian cities including Mumbai and Delhi. The Gap Inc. (NYSE:GPS) is trying to reduce its dependence over the North American market and increase its sales in Asia. As of now, North America accounts for nearly three-quarters of the overall sales of the company.
Other brands owned by the company, Banana Republic and Gap, are facing tough competition from discretionary chains. The Gap Inc. (NYSE:GPS) has 231 stores in Asia and the company is planning to open another 110 Gap stores in China, Taiwan, and Hong Kong within 2014. Gap has received a sharp increase in sales throughout Asia and the company claimed that its sales would reach $1 billion in China within the next 3 years.
Earlier, Gap reported revenue of $3.98 billion for the second quarter with $0.74 earnings per share. The company had 3 percent growth in net sales and Old Navy, one of the primary brands of Gap, increased its sales by 4 percent within this quarter. According to the CEO of Gap Inc, Glenn Murphy,
“Building on last year’s strong performance, we are pleased to have grown our sales three percent and delivered solid improvement in earnings per share. We remain focused on our strategic initiatives, as we turn our focus toward delivering a strong second half.”
This article has been written by Prakash Pandey.