Gap is expecting to beat 2022 earnings estimates as U.S. consumers make a return to the office and reengage in social events.
“(Customers are) leaning into categories like dresses or new silhouettes and pants for back-to-work … as well as denim with new leg shapes. It’s a pretty radical change from last year,” Chief Executive Sonia Syngal said on an earnings call.
The company expects to earn $1.85 to $2.05 per share, which will be higher than Refinitiv IBES estimates of $1.86.
The retailer anticipates sales at Athleta and Old Navy stores to rise this year, which will help the company exceed analysts’ estimates. The company also expects to benefit from its tie up with Walmart for selling home goods and its partnership with rapper Ye (Kanye West) for launching new styles, according to Reuters.
Gap’s shares jumped 7.2% to $15.67 in extended trading after posting a smaller-than-expected loss for the fourth quarter.
The apparel retailer’s strong performance reportedly rivals other competing players such as American Eagle Outfitters and Abercrombie and Fitch, who have noted that rising logistics expenses are going to impact their profit margins in the first half of this year. Gap, however, has been able to sidestep some of those issues thanks to its use of air freight.