Gap, Inc. (NYSE: GPS) reported Q3 EPS of $0.59, $0.42 better than the analyst estimate of $0.17. Revenue for the quarter came in at $3.8 billion versus the consensus estimate of $3.6 billion.

Fiscal 2023 Outlook :

"Our third quarter results reflect ongoing progress, with gross margin expansion and operating margin improvement, resulting in strong free cash flow generation," said Katrina O'Connell, Executive Vice President and Chief Financial Officer, Gap Inc. "As we look to the remainder of the year, we are reaffirming our full year revenue outlook, which balances the progress we are seeing with a prudent view of the economic and consumer environment in which we are operating."

The fourth quarter and fiscal 2023 will include an additional week estimated to positively impact net sales by $150 million. The company is estimating fourth quarter net sales, inclusive of the 14th week, to be flat to slightly negative compared to last year's net sales of $4.2 billion as positive signs at Old Navy and Gap balance the continued work underway at Athleta and Banana Republic. As a reminder, the sale of Gap China to Baozun Inc. closed on January 31, 2023. Fourth quarter 2022 net sales included approximately $90 million in sales for Gap China.

The company continues to anticipate that fiscal 2023 net sales, inclusive of the 53rd week, could be down 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.

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 $1.4 billion in the fourth quarter and approximately $5.15 billion for fiscal 2023.

The company now expects fiscal 2023 capital expenditures of about $475 million, below its prior range of $500 million to $525 million, due in part to fewer store openings.

The company now expects to open a net total of 15 to 20 Old Navy and Athleta stores in fiscal 2023. The company continues to expect to close a net total of about 50 Gap and Banana Republic stores this year, completing its plan to close 350 Gap and Banana Republic stores in North America by the end of fiscal 2023.

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