The earnings call reflects a strong quarter for Gap Inc. with record operating margins, growth in net sales, and significant market share gains across its brands. While weather-related challenges and specific brand segments like Banana Republic's women's segment faced difficulties, the overall business showed resilience and progress towards strategic goals.

Company Guidance

During Gap Inc.'s third quarter 2024 earnings call, the company reported a 2% increase in net sales and a 1% rise in comparable sales, marking the fourth consecutive quarter of sales growth and the seventh consecutive quarter of market share gains. The company expanded its gross margin by 140 basis points and achieved an operating margin of 9.3%, the highest for a third quarter in seven years, reflecting a 270 basis point increase from the previous year. Earnings per share (EPS) rose by 24% to $0.72, and inventory levels were down 2% year-over-year. Gap Inc. ended the quarter with a strong cash balance of approximately $2.2 billion and generated $540 million in free cash flow year-to-date. The company raised its full-year outlook for sales, gross margin, and operating income growth, projecting a net sales increase of 1.5% to 2% for fiscal year 2024, excluding the impact of a 53rd week.

Record Operating Margin

Gap Inc. achieved the highest Q3 operating margin in seven years at 9.3%, representing an increase of 270 basis points versus last year's reported operating margin.

Continued Sales Growth and Market Share Gains

Net sales grew for the fourth consecutive quarter by 2%, with market share gains in all brands, marking the seventh consecutive quarter of gains.

Improved Earnings Per Share

Earnings per share increased by 24% to $0.72 compared to the third quarter of last year.

Athleta Returns to Growth

Athleta reported a 5% increase in comparable sales, marking a significant turnaround for the brand.

Strong Cash Position

Gap Inc. ended the quarter with a cash balance of $2.2 billion, an increase of 64% from last year, and generated $540 million in free cash flow year-to-date.

Gross Margin Expansion

Gross margin expanded by 140 basis points to 42.7%, driven by better inventory management and reduced promotions.

Positive Performance Across Brands

Gap brand comps were up 3%, Old Navy maintained flat comps with market share gains, and Athleta turned positive with a 5% comp increase.

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Gap Inc (GB:0ITS) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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GB:0ITS Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Aug 23, 2018	2018 (Q2)	- / 0.74	0.6	23.33% (+0.14)	―	―
Nov 20, 2018	2018 (Q3)	- / 0.68	0.6	13.33% (+0.08)	―	―
Feb 28, 2019	2018 (Q4)	- / 0.71	0.61	16.39% (+0.10)	―	―
May 30, 2019	2019 (Q1)	- / 0.24	0.42	-42.86% (-0.18)	―	―
Aug 22, 2019	2019 (Q2)	- / 0.63	0.74	-14.86% (-0.11)	―	―
Nov 21, 2019	2019 (Q3)	- / 0.53	0.68	-22.06% (-0.15)	―	―
Mar 12, 2020	2019 (Q4)	- / 0.58	0.71	-18.31% (-0.13)	―	―
Jun 04, 2020	2020 (Q1)	- / -2.51	0.24	-1145.83% (-2.75)	―	―
Aug 27, 2020	2020 (Q2)	- / -0.17	0.63	-126.98% (-0.80)	―	―
Nov 24, 2020	2020 (Q3)	- / 0.25	0.53	-52.83% (-0.28)	―	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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GB:0ITS Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Nov 21, 2024	$21.25	$24.50	+15.27%
Aug 29, 2024	$22.78	$22.10	-2.97%
May 30, 2024	$21.87	$27.99	+27.97%
Mar 07, 2024	$18.70	$19.63	+5.00%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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