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Gap stock bounces back after earnings beat diminished expectations

Gap Inc. earnings beat diminished expectations Thursday afternoon in the wake of a shakeup, sending shares higher in late trading. Gap had already cut its outlook for the third quarter and the year earlier this month, when it also said goodbye to Chief Executive Art Peck. On Thursday, the company reported third-quarter earnings of $140 million, or 37 cents a share, on sales of $4 billion, down from $4.09 billion a year ago. After adjusting for separation and restructuring costs, the company reported earnings of 53 cents a share, down from 68 cents a share a year ago. Analysts on average projected adjusted earnings of 51 cents a share on sales of $3.97 billion, after adjusting forecasts lower in the wake of Gap’s warning. “We are not pleased with the third quarter results and are focused on aggressively addressing the operational issues that are hindering the performance of our brands,” Robert Fisher, the interim CEO of Gap, said in an announcement, adding that the chain still plans to spin off Old Navy as a separate entity. Gap’s stock closed with a 0.4% decline at $16.22, and has fallen more than 37% so far this year as the S&P 500 index has gained 24%. In after-hours trading Thursday, shares gained more than 3%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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