Gap (GPS) – Get Report climbed Thursday after the apparel-and-accessories retailer swung to a second-quarter profit, beating Wall Street's expectations, and boosted guidance thanks to a surge in sales.
Shares of the San Francisco company at last check were up 6.3% to $28.02.
Gap reported earnings of $258 million, or 67 cents a share, compared with a loss of $62 million, or 17 cents a share, in the year-earlier quarter. The latest adjusted earnings were 70 cents a share.
Revenue totaled $4.21 billion, up 29% from a year earlier. The latest figure was the highest second-quarter sales in over a decade, the company said.
Online sales represented 33% of the total business, the company said.
Analysts surveyed by FactSet were looking for GAAP earnings of 45 cents a share, or an adjusted 46 cents, on sales of $4.12 billion.
Comparable sales were up 3% year-over-year and up 12% versus 2019.
Comparable sales at Old Navy Global were flat with a year earlier, while comparable sales at Gap Global declined 5% year-over-year.
Comparable sales rose 41% at Banana Republic and 13% at Athleta, year over year.
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The company raised its full year guidance to a range of $1.90 to $2.05, and adjusted earnings to an estimated $2.10 to $2.25 a share.
Wall Street is expecting full-year GAAP earnings of $1.78, or an adjusted $1.80.
Gap said the full-year outlook reflects the impact of expected headwinds in its global supply ch! ain, potential inflationary pressures, and the current COVID environment.
The company said it expects net sales for the fiscal year to grow about 30% from the year earlier.
The FactSet consensus calls for full-year revenue of $17.13 billion.
Separately on Thursday, Gap said it had acquired Drapr, an e-commerce startup and online application that enables customers to quickly create 3D avatars and virtually try on clothing. Terms weren't disclosed.
In May, Gap swung to a surprise fiscal-first-quarter profit, nearly doubled its quarterly revenue and raised its full-year guidance.
In June, Gap debuted the first item from its collaboration with Yeezy Apparel, the clothes brand started by the rapper Kanye West.
The company said the new recycled blue nylon jacket will retail for $200 and is set to ship in the spring.