Facade of GAP retail store with logo sign on sunny day, San Francisco, California, June 7, 2024.
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Gap beat quarterly earnings and revenue estimates and raised its full-year profit margin outlook, the apparel retailer said in results released earlier than expected Thursday.
The company’s shares rose nearly 3% after being halted for much of Thursday morning. Bloomberg reported that a presentation showing the results briefly appeared on Gap’s website in the morning, before it was apparently taken down.
Gap’s stock was halted just before 10 a.m. ET. The company then released its quarterly results at 11:12 a.m. ET, hours before it was originally expected to drop the results after the bell Thursday.
Gap did not immediately respond to a request for comment.
Here’s what the company reported for the second quarter, compared with what Wall Street expected, according to analysts surveyed by LSEG:
- Earnings per share: 54 cents vs. 40 cents expected
- Revenue: $3.72 billion vs. $3.63 billion expected
The apparel retailer’s sales climbed 5% to $3.7 billion in its second quarter. Comparable sales rose 3%.
Gap posted net income of $206 million, or 54 cents per share, for the period ending Aug. 3. That compares with $117 million, or 32 cents per share, in the prior-year period.
The retailer also affirmed its full-year sales guidance of up slightly from the previous year. Gap increased its gross margin outlook to about a 200 basis point expansion, up from at least a 150 basis point expansion. It also hiked its operating income guidance to approximately 50% growth, up from percentage growth in the mid-40s.
Comparable sales were strongest at the Old Navy brand, where they rose 5%. Gap’s namesake brand posted 3% comparable sales growth.
Comparable sales were flat at Banana Republic, while they fell 4% at Athleta.
Gap’s earnings come as CEO Richard Dickson, who took the helm last year, tries to lead a sales turnaround at the legacy retailer.
Investors are watching a jammed week of retail earnings for signs of whether consumer spending is slowing down in the second half of the year. Dollar General shares plummeted on Thursday morning after the discount retailer slashed its sales and profit outlook, citing in part “financially constrained” lower-income consumers.
Both American Eagle Outfitters and Best Buy showed progress in boosting profits when they reported earnings Thursday. But the apparel retailer gave a muted outlook for its second half, while the electronics giant is still working to return to sales growth.
Lululemon and Ulta Beauty are also due to post results after the bell Thursday.
