Gap's 3Q earnings outlook tops Wall Street estimate despite sales drop; Shares rise

Gap Inc. shares are up in extended trading after the retailer predicted third-quarter earnings that topped market forecasts.

The San Francisco-based company operates Gap, Old Navy and Banana Republic.

Gap said Thursday after the market closed that it expects to earn 78 to 79 cents per share for the quarter that ran through October. Analysts polled by FactSet forecast 71 cents per share.

Gap’s earnings outlook overshadowed modest sales trends in October. The company said that its sales from stores open at least a year fell 2 per cent in its third quarter after dropping 3 per cent in October.

Shares rose $1.23, or 3.3 per cent, to $39.13 in extended trading.