Gap Inc (NYSE:GAP) reported financial results for the second quarter Thursday after the bell. Here’s a look at the key highlights from the quarter.
- Gap shares are advancing steadily. Why are GAP shares climbing?
Gap Q2 Key Metrics
- Q2 Revenue: $3.65 billion, versus estimates of $3.69 billion
- Q2 Adjusted EPS: 52 cents, versus estimates of 48 cents
Net sales fell 2% on a year-over-year basis as store sales decreased 3% and online sales dropped 1% compared to the prior year’s quarter, representing 35% of total net sales.
Comparable sales were down 1% overall. Here’s a breakdown of comparable sales by brand.
- Old Navy: down 4%
- Gap: up 10%
- Banana Republic: up 3%
- Athleta: down 12%
“While top-line results in the second quarter were modestly below expectations, continued operational and financial rigor contributed to gross margin strength resulting in the company exceeding profit expectations,” said Richard Dickson, president and CEO of Gap.
“We are particularly proud of the momentum at the Gap brand, which posted another quarter of double-digit comparable sales. We have work to do at Old Navy, but we have a clear understanding of the factors that impacted performance and are taking targeted actions that are already driving improved results.”
In connection with earnings, Gap announced a CEO transition at Old Navy. Michael Francis will take over as president and CEO of Old Navy as Haio Barbeito transitions to an advisory role.
What’s Next For Gap?
Gap sees third-quarter revenue of approximately $3.96 billion to $4 billion versus estimates of $3.98 billion. The company also guided for full-year revenue of $15.55 billion to $15.63 billion versus estimates of $15.53 billion.
Gap raised its full-year adjusted earnings guidance from a range of $2.30 to $2.40 per share to a new range of $2.35 to $2.45 per share versus estimates of $2.34 per share.
Gap management will further discuss the quarter on an earnings call at 5 p.m. ET.
GAP Shares Jump After Earnings
GAP Price Action: Gap shares were up 11.45% in Thursday’s after-hours session, trading at $23.17 at publication time, according to Benzinga Pro data.
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