Gap, Inc. (NYSE:GAP) shares are trading higher after the company released its third-quarter earnings report on Thursday, beating estimates on the top and bottom lines.
- GAP is surging to new heights today. View the charts here.
Gap reported quarterly earnings of 62 cents per share, which beat the analyst estimate of 59 cents.
Quarterly revenue came in at $3.94 billion, which beat the analyst consensus estimate of $3.91 billion.
Analyst View
B of A Securities analyst Lorraine Hutchinson raised the price forecast to $27 (from $23), while keeping a Neutral rating.
The rating reflects the company’s positive comps, but is mindful of potential pressure on lower-end customers from tariffs.
The analyst says that third-quarter adjusted EPS beat the BoFA estimates of 56 cents, driven by stronger sales and gross margins.
Hutchinson notes that tariffs reduced margins by 190 basis points, balanced by AUR growth and lower discounting.
The analyst projects fourth-quarter gross margin to be down 80 basis points, on similar tariff pressure offset by commodity benefits and fewer promotional pullbacks during the holiday season.
Revised Estimates
The analyst raised the fiscal year 2025 and fiscal year 2026 EPS estimates by 3% and 14% to $2.14 and $2.18, respectively.
The estimates reflect the third-quarter beat and improved gross margin outlook for FY26.
GAP Price Action: Gap shares were up 8.33% at $24.98 at the time of publication on Friday, according to Benzinga Pro data.
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