Gap Inc. released its second-quarter results, showing sales slightly below expectations, causing the stock to fluctuate after hours. The company earned $117 million in the quarter, a significant improvement from the loss of $49 million in the same period last year. Adjusted for one-time items, the adjusted earnings per share came in at 34 cents.
Sales for the quarter fell by 8% to $3.55 billion due to the negative impact from a stronger dollar and Gap China. Comparable-store sales also declined by 6%. Analysts had anticipated an adjusted profit of 9 cents per share on sales of $3.58 billion.
CEO Richard Dickson expressed optimism about the company's progress: "We're witnessing encouraging signs as our teams streamline operations and prioritize growth-driving initiatives - a virtuous cycle that we intend to make our norm."
Looking ahead, Gap expects third-quarter net sales to drop to the low-double-digit range compared to last year's sales of $4.04 billion. It is worth noting that Gap China was sold to Baozun Inc. earlier this year, and its third-quarter 2022 net sales included approximately $70 million from Gap China.
Year-to-date, Gap's stock has experienced a 15% decline, in contrast to the S&P 500 index, which has seen gains of about 14%.