Gap tops Q2 expectations in apparent early earnings release

(Updated - August 29, 2024 11:00 AM EDT)

Shares of GAP (GAP) were halted on Thursday morning after it seems the company's quarterly earnings results were released prematurely.

The apparel retailer is scheduled to release its second-quarter earnings after the closing bell on Thursday. However, Bloomberg reported that a presentation displaying the results briefly appeared on Gap’s website in the morning.

While the release is no longer on the website, it showed the company reported Q2 EPS of $0.54, $0.13 better than the analyst estimate of $0.41. Revenue for the quarter came in at $3.7 billion, up 5% year-over-year and above the consensus estimate of $3.63 billion.

The company behind brands such as Old Navy and Athleta said in the release that it "gained market share for the 6th consecutive quarter."

The company also said it expanded gross margin by 500 bps year-over-year and reported operating margin of 7.9% for the quarter.

The company also raised its full-year gross margin and operating income outlook. It now expects an approximately 200 bps gross margin expansion compared to 38.8% last year, while it now sees operating income in the mid to high 50% growth range compared to $606 million in the prior year's quarter.

Reacting to the report, BMO Capital said, "GAP reported a strong EPS beat, driven by a top-line slightly above Street (largely driven by Old Navy's beat), with gross margins nicely ahead of Street (lower commodities, incremental revenue share sales, better promos and ROD leverage)."

"Looking ahead, management introduced 3Q ~in-line with Street and reiterated FY sales, but increased its GM expectations, driving better EBIT $ growth,” they added.

Source: Investing.com