- Gap (GPS.US) shares jumped more than 8% before the opening bell after the clothing and accessories retailer posted solid results for the third quarter.
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Company earned $0.71 per share, which includes $0.33 income from tax benefits, while analysts expected flat earnings.
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Gap, which also operates the Old Navy and Banana Republic brands, recorded a revenue of $4.04 billion, which represents a 2.0% uptick compared to last year, versus $3.8 billion estimated by analysts, according to a survey conducted by Refinitiv.
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Online sales increased by 5% compared to the prior year, representing approximately 49% of total net sales for Q3.
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Gap paid a dividend of $0.15 per share in Q3, totaling $55 million and approved a Q4 dividend of $0.15 per share.
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Company also recorded a $53 million impairment changed caused by cancellation of partnership with Kanye West, known as Yeezy Gap.
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"We have sharpened our focus on execution to optimize profitability and cash flow, are bringing more rigor to our operations, and balancing our assortments in response to what our customers are telling us. While our efforts show early signs of improvement, we are clear that there is work to be done to deliver what our customers, employees, and shareholders expect from Gap Inc.” said Bob Martin, Executive Chairman and Interim CEO of Gap Inc.
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For the current quarter, Gap expects that net sales will slow down by 'mid-single digits', in percentage terms, from last year's levels. GAP CFO Katrina O'Connell, pointed out that the group saw "strong volume in October slow a bit in the end and a little bit of a slow start to November," during an analyst call.
Gap (GPS.US) stock recently jumped above major resistance at $12.15, which is marked with upper limit of the 1:1 structure and 78.6% Fibonacci retracement of the upward wave launched in March 2020. Recent quarterly figures provided fuel for market bulls and price is heading towards local resistance at $15.30, which is marked with previous price reactions. Source: xStation5
