Gap stock soars as it beat forecasts and upgraded outlook significantly

Gap Inc (NYSE:GPS) stock soared more than 20% higher in Thursday’s 'after hours' dealing, adding to the day’s earlier 4% gain, as its first quarter financials smashed Wall Street expectations.

The jeans-n-hoodies retailer reported $3.39 billion of revenue, up 3% year-over-year, and significantly better than the $3.29 billion predicted by Wall Street’s consensus estimates.

Earnings, on a per share basis, was reported at 41 cents – which will have caused some analysts to double-check for a typo, as it compared to a consensus forecast of 14 cents.

All four of Gap’s brands (Old Navy, Gap, Banana Republic, and Athleta) posted growth in comparable sales, bucking the trend of recent years.

Same-store sales were up 3%, versus a 4% decline in the same period last year.

Boosted by the bullish performance, Gap raised its full-year guidance with operating income now expected to grow by a “mid-40s percentage range” rather than previous projections in the “low-to-mid teens”.

Chief executive Richard Dickson talked up Gap’s turnaround.

“We gained market share for the 5th consecutive quarter with positive comparable sales at all brands, demonstrating improved relevance with our customers as we execute against our brand reinvigoration playbook,” he said in a statement.

"We are on a journey to become a high-performing house of iconic American brands that shape culture.

“While this will take time, perseverance, and rigor, we are excited about the opportunities ahead as we unlock the power of Gap Inc."

In New York, Gap shares were up 23.45% priced at $27.80 in ‘after hours’.

Over the past year, Gap stock is up around 170%.