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Gap posts 3Q loss
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November 15, 2001: 5:47 p.m. ET
Retailer's results far from last year's profit, but better than expected.
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NEW YORK (CNN/Money) - Gap Inc. reported a third-quarter loss that was slightly narrower than Wall Street expected, though still far worse than the profit it earned a year ago, hurt by falling sales, a sluggish economy and the impact of the Sept. 11 attacks.
The San Francisco-based specialty retailer reported a third-quarter loss of $48 million before one-time items, or 6 cents a share, compared with earnings of $186 million, or 21 cents a share, a year ago.
Wall Street analysts surveyed by earnings tracker First Call expected Gap, which operates Gap, Old Navy and Banana Republic stores, to lose 7 cents a share.
Gap's quarterly sales fell 2.2 percent to $3.33 billion from $3.41 billion a year ago. Sales in stores open for at least a year fell 17 percent, compared with an 8-percent drop during the same period last year.
"Clearly, this quarter has been disappointing for us," Chief Financial Officer Heidi Kunz said in a conference call with analysts.
Gap (GPS: Research, Estimates) shares fell 23 cents to $14.85 Thursday ahead of the report.
Retail sales in the United States, already sluggish as a result of anemic economic growth, suffered greatly in the immediate aftermath of the Sept. 11 terror attacks. They rebounded sharply in October, the government reported this week, but are still at relatively low levels.
Gap has struggled all year as customers have rejected its simple styles in favor of more fashionable clothes, as well as the residual effects of past management problems. In August, the company cut about 1,300 jobs and has warned about its earnings performance all year.
"To restore our comparable-store sales and earnings performance, we're tightly managing our business and focusing on the fundamentals," Gap CEO Millard Drexler said in a statement. "Our priorities are controlling costs, strengthening margins, and getting the product right for our customers."
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Separately, Kohl's Corp. reported its third-quarter earnings jumped to $100.2 million, or 29 cents a share, from $76.7 million, or 23 cents a share, a year ago, a 31 percent jump. First Call expected Kohl's to earn 28 cents a share.
The Menomonee Falls, Wis.-based retail chain attributed its profit gain to healthy sales of its moderately priced clothes and home goods.
Kohl's (KSS: Research, Estimates) shares rose 39 cents to $67.08 Thursday.
And Nordstrom Inc. reported third-quarter earnings of $10.5 million, or 8 cents a share, compared with a loss of $3.3 million, or 3 cents a share, a year ago. Analysts surveyed by First Call expected Nordstrom to earn 4 cents a share.
On Oct. 9, Seattle-based Nordstrom cut its third-quarter earnings-per-share target to a range of 3 cents to 6 cents a share from a range of 17 cents to 20 cents.
Nordstrom (JWN: Research, Estimates) shares rose 46 cents to $17.82. 
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