Shares of the Gap Inc. (NYSE: GPS) rallied about 7.15% in aftermarket hours on Thursday after the clothing retailer, late last evening, provided upbeat sales guidance for the fiscal first quarter while sales in April along with same-store-sales showed strong growth trend.
For the fiscal first quarter ended May 4, the San Francisco Calif. based Company anticipates earnings of 68 cents to 69 cents a share compared to 47 cents a share, posted in the year-earlier quarter. Analysts’ most recent consensus estimate is for 56 cents a share.
Gap said that first quarter net income included a onetime gain of 4 cents a share linked to favorable tax matter resolution.
The Company said that sales rose 7% to $3.73 billion from $3.49 billion, in the year-earlier quarter. Wall Street’s most recent estimate was for $3.67 billion.
Same-store-sales, a key gauge on retailer’s performance since it excludes sales from those stores that were opened or shuttered less than a year ago, increased 2%, in the fiscal first quarter.
Meanwhile, the Company reported that sales in the month of April (five week period ended May 4) soared 7% to $1.21 billion from $1.15 billion, in the same month of last fiscal.
Same-store-sales, climbed 8% at namesake brand stores, rose 1% at Banana Republic stores and jumped 9% at Old Navy stores, in April.
Overall, Same-store-sales for April, which ended May 4, climbed 7%.
Commenting over the results, Gap Inc’s Chief Executive, Glenn Murphy said, “We are pleased with our sales performance this month, led by our largest brands, Gap and Old Navy.”
On May 7, analysts at Wells Fargo raised their rating on the stock to “outperform” from “market-peform” and set a price target of $42-$44.
“We believe GPS has many ways to win. The U.S. business is improving, the company has underappreciated growth opportunities, and the new global structure is the right one to help the businesses thrive, in our opinion. With strong and consistent FCF as downside protection, we believe the stock has a favorable risk/reward,” said analysts at Wells Fargo in their research note to clients.
The Company is scheduled to release its fiscal first quarter results on May 23.
Recent Comments