Gap Shares Jump On Q4 Profit Above Market With Comps Growth, Dividend, Positive FY25 Sales View

(RTTNews) - Shares of Gap Inc. (GAP) gained around 19 percent in the extended trading on the NYSE after specialty apparel retailer reported Thursday fourth-quarter profit above market estimates on higher comparable sales, despite weak net sales. The company also issued outlook, expecting higher net sales in fiscal 2025.

Further, the Board of Directors approved a first quarter fiscal year 2025 dividend of $0.165 per share, representing a 10 percent sequential increase.

For the first quarter, the company projects net sales to be flat to up slightly from prior year's sales of $3.4 billion. Gross margin is expected to expand slightly from 41.2 percent last year.

Further, for fiscal 2025, Gap projects net sales to grow 1 percent to 2 percent from last year's $15.1 billion, and operating income to grow 8 percent to 10 percent.

In its fourth quarter, Gap's bottom line came in at $206 million or $0.54 per share, compared with $185 million or $0.49 per share last year. Analysts on average had expected the company to earn $0.38 per share. Analysts' estimates typically exclude special items.

The company's revenue for the period fell 3.5 percent to $4.149 billion from $4.298 billion last year. Store sales decreased 4 percent and online sales decreased 2 percent. Online sales represented 41 percent of total net sales. Comparable sales were up 3 percent.

On the NYSE, Gap shares had closed Thursday's regular trading down 1.8 percent at $19.48. Following the earnings news, shares gained 18.9 percent in the after-hours trading to $23.17.

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