Gap Stock Higher On Surprise Q2 Profit, But 2022 Outlook Scrapped

Updated at 10:30 a.m. EST

Gap Inc. (GPS) stocks moved higher Friday after a surprise second-quarter gain that offset the subdued near-term outlook associated with bulging inventories and weaker demand for clothing.

Gap, which also operates the Old Navy and Banana Republic brands, withdrew its full-year outlook for earnings between 30 cents and 60 cents a share amid what it called a “testing” macro environment coupled with ” shifts in consumer behavior” favoring formal wear over many of its casual alternatives.

For the three months ended July, Gap said revenues were down 3.3% year-on-year to $3.68 billion on the streets, helped in part by stronger-than-expected Banana Republic sales, while profits were locked in on 18 cents a share, good. ahead of forecasts for a loss of 5 cents per share.

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