Investing.com — Gap reported third-quarter results Thursday that beat Wall Street estimates as margin continued to improve amid an ongoing reduction in promotional activity, though the apparel retailer also offered tame guidance for the key holiday quarter.
Gap Inc (NYSE:) shares jumped 10% in after-hours trade following the report.
Gap EPS of $0.59, up from on revenue of $3.77B. Analysts polled by Investing.com anticipated EPS of $0.17 on revenue of $3.6B.
The beat was supported by a 390 basis point increase in gross margin to 41.3% from the same period a year earlier.
Same store sales fell 2%, but that was well below estimates for 8.7%.
The company said it expects fourth-quarter net sales to be flat to slightly negative compared to last year’s net sales of $4.2B.
Looking further ahead, the retailer reiterated its guidance for 2023, forecasting net sales to fall in the mid-single digit range compared to last year’s net sales of $15.6B.
The company also lowered its fiscal 2023 capital expenditures guidance to about $475M, below its prior range of $500M to $525M, partly driven by fewer store openings.