Gap Inc. Beats Q4 EBITDA Estimates, Guides Q1 Revenue 0.5% Below Consensus
Gap Inc. reported Q4 net income of $171 million, or $0.45 per share, on revenue of $4.24 billion, all in line with expectations, while adjusted EBITDA of $357 million topped estimates. The company guided Q1 revenue at $3.51 billion, 0.5% below consensus, prompting a 9.5% share price drop.
1. Q4 Financial Results
Gap Inc. reported net income of $171 million, or $0.45 per share, on revenue of $4.24 billion, representing a 2.1% year-on-year sales increase and matching analyst forecasts for both top and bottom lines.
2. EBITDA Performance
The retailer posted adjusted EBITDA of $357 million, corresponding to an 8.4% margin that exceeded projections by over $20 million, while operating margin held at 5.4% and free cash flow margin remained at 12.8%.
3. Outlook and Market Reaction
Gap guided Q1 revenue at $3.51 billion—0.5% below Street estimates—and set full-year EPS at $2.20 to $2.35, which triggered a 9.5% drop in the stock as investors reacted to the cautious outlook.