GPS: Gap Stock Rallies 7% as Earnings Soar More Than Double Above Consensus Views

Analysts had priced in a 23-cent-a-share increase in the clothing retailer’s holiday earnings report. But there was a big gap.

Key Points:

• Gap to pop out with a gap today.
• Q4 earnings post surprise beat.
• Shares are down on the year.
• Gap stock GGPS jumped in late-trading Thursday and is looking to open with a gap of 7% for Friday’s regular session. The clothing retailer posted a surprise earnings beat of 49 cents a share, more than double the 23 cents analysts had penciled in. It was a needed sign of moving toward profitability as sales marked a gradual climb.
• Revenue for the fourth quarter, another successful one for Richard Dickson, gained 1% from a year ago to $4.3 billion and topped consensus calls for $4.2 billion. With that, net income for the quarter, which ended February 3, arrived at $185 million compared with a loss of $273 million in the same time span last year.
• Gap logged a 5% decline in its annual revenue growth as fiscal 2023 picked up $14.9 billion in net sales. For the current quarter, Gap expects revenue to stay muted. Shares of the clothing retailer are down 7.5% this year but have nearly tripled from their 2023 bottom of under $8 a pop.