Gap Inc. (NYSE:GPS) is a San Fransisco-based apparel retail company. Its shares had surged 25% week-over-week as of early morning trading on Friday, May 31, 2024. The stock is now up 27% in the year-to-date period. A recent earnings report for the retailer has allowed Gap to capitalize on the post-earnings momentum.
The company unveiled its first quarter (Q1) fiscal 2024 earnings after markets closed on Thursday, May 30, 2024. In Q1 2024, Gap reported net sales of $3.4 billion – up 3% compared to the previous year. Meanwhile, comparable sales delivered 3% growth as store sales increased 3% and online sales grew by 5%, all in a year-over-year period. The company posted net income of $158 million and diluted earnings per share (EPS) of $0.41.
As for the financials, Gap ended the first quarter of fiscal 2024 with cash, cash equivalents, and short-term investments of $1.7 billion. That was up 48% compared to the end of Q1 FY2023. Moreover, net cash from operating activities reached $30 million and free cash flow was reported at negative $63 million. Capital expenditures were reported at $93 million.
Looking forward, Gap is expecting net sales to be up slightly on a 52-week basis for the full year. Moreover, it is projecting operating income growth in the mid-40% range with capital expenditures reached approximately $500 million. For the second quarter, the company expects net sales growth to be in the low-single digits and a gross margin expansion of roughly 300 basis points.
Shares of Gap still possess a favourable price-to-earnings ratio of 14 at the time of this writing. Moreover, the stock offers a quarterly dividend of $0.15 per share. That represents a 2.2% yield.