Gap Inc

NYSE:GAPUnited States

Aug 29, 2024

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• DJ Gap's Surprise Earnings Beat Expectations. The Stock Rises. -- Barrons.com, from 4:06PM ET on Thursday Aug 29, 2024 by Dow Jones

  4:06PM ET on Thursday Aug 29, 2024 by Dow Jones
  Companies Mentioned: GAP
  By Sabrina Escobar Gap's second-quarter earnings topped Wall Street's expectations, proving that the company's turnaround is well and truly underway. Revenue of $3.7 billion rose 5% year over year and beat the $3.6 billion consensus call among analysts surveyed by FactSet. Adjusted earnings of 54 cents a share were better than forecasts calling for 41 cents. Gross margin rose 5 percentage points year over year to 42.6%, boosted by lower commodity costs and less discounting activity, the company said. Given the strong quarter, Gap raised its forecasts for margin and earnings for the year. It now expects gross margins to expand by about 2 percentage points, compared with previous guidance of 1.5 percentage points. Operating income is expected to reach a mid-to-high 50% growth rate, up from management's previous forecast for a number in the mid 40% range. The company reaffirmed its view that net sales will be up slightly from the previous fiscal year. Gap stock was trading 3% higher at $23.05 following the release. The shares had been halted from trading Thursday morning but resumed trading around 11:30 a.m. Eastern time. Gap had been scheduled to issue its earnings report after the market closed Thursday, but the results were accidentally released earlier in the day. A Gap representative didn't immediately respond to Barron's request for comment. The company recently changed its ticker to GAP from GPS. Gap is in the midst of a multi-year turnaround strategy, led by CEO Richard Dickson, who joined the company in 2023. In the past year, Gap has cut its corporate workforce, hired new executives -- such as fashion designer Zac Posen -- and taken steps to become more relevant for consumers. Those efforts seem to be paying off. This quarter, the Old Navy and Gap brands saw same-store sales increase 5% and 3%, respectively. A year ago, both brands had notched single-digit declines. Banana Republic and Athleta's same-store sales have yet to turn positive, but are also improving from a year ago. "In comparison to where we were only one year ago, we are in a stronger position across key metrics that matter -- including net sales, margins, and our cash position -- and we are making consistent progress in the reinvigoration of our brands," Dickson said. The company's quarterly call with analysts is still scheduled for 5 p.m. Eastern time Thursday. Write to Sabrina Escobar at sabrina.escobar@barrons.com This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires August 29, 2024 16:06 ET (20:06 GMT)

• DJ Gap Was Itching To Spread The Good News About 2Q -- Market Talk, from 1:46PM ET on Thursday Aug 29, 2024 by Dow Jones

  1:46PM ET on Thursday Aug 29, 2024 by Dow Jones
  Companies Mentioned: GAP
  
  1346 ET - Gap was originally due to report 2Q results after the bell, but appears to have prematurely released them before the open. The report was then officially released nearly two hours later. The apparel retailer was apparently eager to spread the good news--a big jump in quarterly profit and 5% gain in sales. Comparable sales were up 3%, driven by gains at its Old Navy and Gap stores, while brick-and-mortar sales rose 4% and online sales, now a third of its business, rose 7%. The results topped analyst estimates and show that turnaround efforts from new company leadership, including CEO Richard Dickson and creative director Zac Posen, are resonating with consumers in a tight spending environment. Shares rise 2.4% to $22.96. (dean.seal@wsj.com)