Gap Inc (NYSE:GPS) shares surged more than 15% after-hours following the company’s reported Q1 results, with EPS of $0.01 coming in better than the consensus estimate of ($0.15). Revenue fell 6% year-over-year to $3.28 billion, compared to the consensus estimate of $3.29B.
Comparable sales fell 3%. Store sales were down 4% year-over-year, while online sales fell 9% and represented 37% of total net sales.
"As we look to the remainder of fiscal 2023, we believe we remain well positioned to drive continued margin expansion and improved cash flow relative to last year despite what we know continues to be an uncertain macro and consumer environment," said CFO Katrina O'Connell.
The company expects Q2 net sales to decrease in the mid to high-single-digit range year-over-year. Q2/22 net sales included approximately $60 million in sales for Gap China, which was sold to Baozun (NASDAQ:BZUN) (transaction closed on January 31, 2023).
The company continues to expect fiscal 2023 net sales to decline in the low to mid-single-digit range. Fiscal 2022 net sales included approximately $300M in sales for Gap China. Fiscal 2023 will include a 53rd week estimated to positively impact net sales by $150M.