Gap stock shoots higher after retail chain lost less than expected in holidays, predicts growth in 2022

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Gap stock shoots higher after retail chain lost less than expected in holidays, predicts growth in 2022
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Gap stock surges in late trading as retailer predicts growth in 2022

The Gap Inc. lost less money than expected in the holiday season and surprisingly beat analysts’ expectations with executives’ forecast for 2022, driving shares more than 15% higher in after-hours trading Thursday.

Analysts on average were expecting an adjusted loss of 13 cents a share on sales of $4.49 billion, after Gap’s holiday forecast for losses led to a huge decline in its stock. Shares moved higher than $16.50 in after-hours trading Wednesday immediately after the release of the results, after closing with a 2.3% loss in the regular session.

“We expect GPS provides EPS guidance below the Street’s $1.76 forecast,” UBS analysts wrote earlier this week in previewing Gap’s earnings. “We think the Street Gap executives did say that they expect supply-chain issues to continue weighing on results in the first half of the year, but expect the second half to be a part of a long-awaited turnaround for the retailer.

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