Gap stock jumped 7% in premarket trading, after the specialty apparel maker delivered a smaller-than-expected quarterly loss and provided encouraging guidance.
Gap (ticker: GPS) said it lost two cents a share on an adjusted basis in its fiscal fourth-quarter, on revenue that rose 2.3% year over year to $4.53 billion. Analysts were looking for the company to lose 13 cents a share on revenue of $4.49 billion.
Same-store sales climbed 3% year over year, slightly below the 3.7% consensus estimate, and were up 3% from the prepandemic 2019 period.
For the full year, Gap expects to earn between $1.85 and $2.05 a share, compared with the average analyst estimate of $1.33.
Athleta continued to be a standout brand for Gap, with net sales jumping 52% versus 2019. Both its Banana Republic and Gap brands registered sales declines compared with the prepandemic period, falling 11% and 13%, respectively. Old Navy notched a 2% increase in sales, although the company said that supply chain headwinds hurt top-line results. Still, the division recorded more than $9 billion in sales for the year.
Online sales surged 44% versus 2019 and now account for 43% of Gap’s business.
Gap has struggled recently—its fiscal third-quarter report missed the mark, and analysts have also grown more cautious. And other mall-based apparel chains didn’t fare well in terms of earnings this week, making Gap’s upbeat results and rosier outlook a welcome win. Short sellers, which account for nearly 15% of the shares outstanding, may also be reconsidering their positions, boosting the stock.
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