Gap Shares Jump 14% After-Hours as FY Sales Growth Outlook Raised

Luzi Ann Santos wrote a column · Nov 21, 2024 15:28

$Gap Inc (GAP.US)$ shares advanced almost 14% in extended trading after the apparel company raised its full year sales growth outlook.

The company behind clothing brands Old Navy, Banana Republic, Athleta and its namesake brand Gap now expects net sales to rise between 1.5% to 2% in fiscal year 2024. It previously expected sales to be up just "slightly." It also said it expects operating income to see mid-to-high 60% growth range, higher than the 50% range it provided previously.

“Holiday is off to a strong start, and we remain focused on executing with excellence in the fourth quarter," CEO Richard Dickson said in the company's earnings release. "Our performance year-to-date gives us the confidence to raise our full year outlook for sales, gross margin and operating income growth."

The better outlook overshadowed a miss in the company's comparable sales in its fiscal third quarter. Comparable sales grew 1% in the three months ended, trailing the 1.7% expected by analysts, according to estimates compiled by Bloomberg.

Earnings rose to 72 cents a share in the quarter, from 58 cents a year earlier. That surpassed estimates that called for 58 cents a share. Revenue totaled $3.83 billion, better than the $3.81 billion expected by analysts.

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