The Gap, Inc.GAP
▲ PositiveCapitalrelevance
Raises full-year adjusted operating margin and EPS outlook despite sales decline.
Impact on stocks 1
Consumer Discretionary
The Gap, Inc.Gap Inc. reported second-quarter net sales of $3.7 billion, down 2% year-over-year, with comparable sales down 1%, but the company raised its full-year adjusted operating margin and EPS outlook. Adjusted EPS came in at $0.52, down from $0.57 a year ago, while adjusted gross margin rose 20 basis points to 41.4%. The company now expects full-year net sales growth of 1% to 1.5%, adjusted operating margin of 7.4% to 7.6%, and adjusted EPS of $2.35 to $2.45, up 10% to 15% from last year. By brand, Gap delivered a 10% comparable sales increase, its 11th consecutive quarter of positive comps, while Banana Republic posted its fifth straight quarter of growth with comps up 3%. Old Navy's comparable sales fell 4%, and Athleta declined 12%. The company also announced that Michael Francis will become Old Navy's new Brand President and CEO on November 2, succeeding Haio Barbeito, and it repurchased over $600 million in shares year-to-date.
The Gap, Inc.Raises full-year adjusted operating margin and EPS outlook despite sales decline.