(Boursier.com) — GAP soars by more than 20% in pre-session on Wall Street, sought after quarterly results better than expected and the increase in its annual guidance. In the midst of a turnaround, the owner of the Old Navy and Gap brands recorded revenue of $3.4 billion during the fiscal quarter ended May 4, up 3% on a comparable basis. The gross margin reached 41.2% versus 38.5% expected and the operating margin stood at 6.1% versus a consensus of 2%. The San Francisco-based company ended the quarter with smaller inventory, down 15% from last year, and said new products and advertising efforts were paying off.
Richard Dickson, CEO of Gap, who took office in August 2023, said the first quarter results “provide the confidence to raise both sales and operating profit guidance for the full year “. The company now sees net sales “up slightly” this year, compared to an earlier forecast of “roughly flat”, while gross margin is expected to grow by at least 150 bps compared to at least 50 bps previously. The outlook “takes into account continued uncertainty in consumption and the macroeconomic environment.”
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