Gap, Inc. (GPS) Tops Q2 EPS by 24c, Offers Outlook

Gap, Inc. (NYSE: GPS) reported Q2 EPS of $0.34, $0.24 better than the analyst estimate of $0.10. Revenue for the quarter came in at $3.55 billion versus the consensus estimate of $3.58 billion.

• Comparable sales were down 6%.

Fiscal 2023 Outlook:

"As we look toward the long-term, we believe our focus on unlocking the value of our important and iconic brands coupled with the transformative actions we are taking to improve our operating structure will position Gap Inc. back on its path towards delivering sustainable, profitable growth and value for our shareholders," said Katrina O'Connell, Executive Vice President and Chief Financial Officer, Gap Inc.

The company's outlook takes into consideration the continued uncertain consumer and macro environment.

The company is estimating that third quarter net sales could decrease in the low double-digit range compared to last year's net sales of $4.04 billion. As a reminder, the sale of Gap China to Baozun Inc. closed on January 31, 2023. Third quarter 2022 net sales included approximately $70 million in sales for Gap China.

The company anticipates that fiscal 2023 net sales could decrease in the mid-single digit range compared to last year's net sales of $15.6 billion. As a reminder, fiscal 2022 net sales included approximately $300 million in sales for Gap China. Fiscal 2023 will include a 53rd week estimated to positively impact net sales by $150 million.

The company continues to expect gross margin expansion for fiscal 2023. At the estimated level of sales described above, the company is planning adjusted operating expenses of approximately $1.3 billion in the third quarter and approximately $5.15 billion for fiscal 2023.

The company continues to expect fiscal 2023 capital expenditures in the range of $500 million to $525 million.

For earnings history and earnings-related data on Gap, Inc. (GPS) click here.

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