Apparel retailer exceeded profit forecasts the last 10 quarters Gap Inc. is scheduled to report fiscal second-quarter results on Thursday, after the market closes. The apparel retailer’s shares have managed to outperform the broader market this year, although the company has had to operate in what many peers have called a very difficult, highly-promotional retail environment in which consumers have been increasingly unwilling to pay full price. Here’s what investors can expect: Earnings: Analysts are expecting Gap GPS, +1.55% to report a profit, excluding non-recurring items, of 69 cents a share, according to FactSet. The company said on Aug. 7, after reporting better-than-expected same-store sales growth in July, that it expected, excluding a gain on the sale of a company-owned building, earnings per share of 68 cents to 69 cents, which was above analyst forecasts at the time of 66 cents a share, and up from year-earlier earnings of 64 cents a share. Gap has beaten analyst profit projections in each of the last 10 quarters. On May 22, Gap affirmed its full-year profit outlook of $2.90 to $2.95 a share. Revenue: On Aug. 7, Gap reported fiscal second-quarter sales of $3.98 billion, up 3% from the same period a year ago, which was mostly in line with analyst projections at the time. Same-store sales, or sales of stores open at least a year, were flat compared with last year. Stock reaction: Gaps’ stock has gained 7.5% so far this year, compared with a year-to-date gain of 6.6% for the S&P 500 and a 2.6% decline in the SPDR S&P Retail exchange traded fund. The average analyst rating on the stock is overweight, according to FactSet, while the average price target is $45.05, or 7.2% above current levels. Despite consistently beating profit expectations, the stock has closed lower five times on the days following the last 10 quarterly reports. Key points: Analyst Richard Jaffe at Stifel Nicolaus expects gross margin to decrease by 0.9 percentage points in the second quarter as a result of promotional activity. Jaffe believes investors have already acknowledged that the second quarter was tough for retailers and Gap, so they will be more interested in Gap’s outlook for back-to-school and third-quarter selling trends. Some other key issues Jaffe will be looking for are which product categories have been driving sales, which have been underperforming and how have customers been responding to the new store designs for its Banana Republic brand. Investors should also focus on how the performance of its Athleta stores, which has become a key threat to yoga-gear maker Lululemon Athletica.http://www.marketwatch.com/story/what-to-look-for-in-gaps-profit-report-2014-08-18