Gap Posts Strong Quarterly Results With Early Release Leading to Trading Halt

Gap (GAP) posted better-than-expected results for the second quarter and boosted its guidance on higher sales at its Gap and Old Navy stores.

The company reported second-quarter diluted earnings per share (EPS) of 54 cents, with revenue rising 4.8% from a year ago to $3.72 billion. Both exceeded estimates compiled by Visible Alpha. Gap’s gross margin increased 500 basis points (bps) to 42.6%.

Same-store sales climbed 3% overall, and advanced 5% at Old Navy, while they were up 3% for Gap’s namesake brand. Same-store sales were flat at Banana Republic, and fell 4% at Athleta. A year ago, all four had declined.

CEO Richard Dickson said “in comparison to where we were only one year ago, we are in a stronger position across key metrics that matter–including net sales, margins, and our cash position–and we are making consistent progress in the reinvigoration of our brands.”

The company said it now anticipates full-year gross margin gaining approximately 200 bps, up from at least 150 bps. It expects operating income in the mid-to-high 50% growth range, versus an earlier forecast in the mid 40% range.

Early Release Leads to Temporary Trading Halt

Shares of Gap finished 1.7% higher at $22.80 Thursday after an early release of the company’s results led to a trading halt.

“Results were inadvertently posted to the Company’s website for a brief period of time this morning as a result of administrative error,” a Gap spokesperson said, adding “as soon as the error was caught, we notified the NYSE and trading of our stock was halted temporarily.”

With Thursday’s gains, shares of Gap have gained about 9% from the start of the year.