Gap (GPS) Shares Surge 8% on Q4 Beat and Solid Outlook
Gap, Inc. (NYSE: GPS) shares were trading more than 8% higher after-hours after the retailer's strong Q4 results, with EPS of ($0.02) coming in significantly better than the consensus estimate of ($0.12).
Quarterly revenue came in at $4.6 billion, representing a decrease of 3% compared to Q4/19 (due to the significant impact of COVID-19 on 2020, the comparison was made to 2019), above the consensus estimate of $4.51 billion. Online sales increased 44% vs. Q4/19 and represented 43% of the total business. Q4 comparable sales grew 3% vs. both Q4/19 and Q4/20.
For the full 2021-year, the company posted net sales of $16.7 billion (up 2% vs. 2019), with Old Navy net sales of $9 billion (up 14% vs. 2019), Gap net sales down 12% vs. 2019, negatively impacted by permanent store closures, while Gap North America comparable sales up 12% vs. 2019. Banana Republic’s net sales were down 18% vs. 2019, while comparable sales were down 9% vs. 2019. The brand’s new premium positioning has resulted in Average Unit Retail growth, higher basket size, and an increase in higher-income shoppers followed by its successful re-launch. Athleta's net sales were up 48% vs. 2019, with comparable sales up 39% vs. 2019, and it is on track to hit net sales of $2 billion by the fiscal year 2023.
The company expects full 2022-year EPS to range from $1.85 to $2.05, compared to the consensus estimate of $1.86. The company expects 2022 year-over-year revenue growth to be in the low single-digit range, with Q1/22 revenue to be down mid to high-single digits year-over-year.