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Marvel Studios did not recast the role played by the late Chadwick Boseman in “Black Panther: Wakanda Forever,” and industry experts say that was a smart move for the franchise.
Marvel head Kevin Feige and director Ryan Coogler felt recasting the role of T’Challa would be “too soon” and that the film should honor the death of Boseman.
The result is a sequel that critics and audiences agreed was emotionally resonant and pushed the Marvel Cinematic Universe and its characters forward.

A still from the movie “Black Panther.”
Source: Marvel

In August 2020, Disney’s Marvel Studios was faced with an unenviable task — how to handle the sudden and tragic death of Chadwick Boseman, the star of its megahit film “Black Panther.”
At the time of Boseman’s death from colon cancer, director Ryan Coogler had already completed a draft script for the sequel, which was centered around the late actor’s character. The 2018 Marvel film was among the first blockbusters to feature a predominantly Black cast, and it was proof that racial representation in Hollywood could mean big money at the box office.

With the “Black Panther: Wakanda Forever” sequel slated for release in mid-2022, Marvel executives and Coogler needed to quickly decide what to do with the character of T’Challa, who was played by Boseman and becomes the Black Panther superhero after the death of his father. The film centers on what it means to be Black, in both America and Africa, and grapples with issues affecting modern-day life for the Black community.
Since the Black Panther is a key character in the Marvel Cinematic Universe, the studio could have recast the character and carried on with production.
But Marvel President Kevin Feige felt it wasn’t the right strategy.
“It just felt like it was much too soon to recast,” said Feige in an interview with Empire. “Stan Lee always said that Marvel represents the world outside your window. And we had talked about how, as extraordinary and fantastical as our characters and stories are, there’s a relatable and human element to everything we do. The world is still processing the loss of Chad. And Ryan poured that into the story.”
The result is a much-anticipated sequel that critics and audiences agreed honored Boseman’s legacy and pushed the MCU and its characters forward. The film generated $181 million during its domestic debut, earning it the record for the biggest opener in the month of November and the second-highest opener of 2022.

In the sequel, the Black Panther is not gone from the Marvel Cinematic Universe. Instead, the name becomes a mantle.
Coogler’s film opens with the death of T’Challa from an unspecified disease. His passing deeply affects his community and the supporting characters from “Black Panther.” His sister Shuri, guilt-ridden that she could not use science to cure him, buries herself in work. His mother, who has once again become Queen of Wakanda, tries to lead while honoring her son and ancestors.
T’Challa’s love interest, the war dog Nakia, has fled Wakanda and is living in Haiti, working as a director of a local school.

Letitia Wright stars as Shuri in Marvel Studio’s “Black Panther: Wakanda Forever.”

Throughout the film, Shuri struggles with her faith in the spiritual elements of Wakanda. She is eventually able to take on the title of Black Panther after recreating the once-extinct heart-shaped herb that grants the superhero’s power.
The characters in the film see her as a symbol — a promise for the future of Wakanda — and, ultimately, rally together to take on antagonists Namor and the Talokan.
While promoting “Black Panther: Wakanda Forever,” Coogler noted that the initial script centered on T’Challa’s grief for the loss of time after returning from being turned to dust by another character, Thanos.
The decision by Marvel executives not to recast Boseman’s character isn’t unusual.
Director Christopher Nolan didn’t replace the late Heath Ledger as the Joker in his Dark Knight trilogy, after the actor suffered cardiac arrest brought on by prescription drug intoxication. After actor Paul Walker died in a car crash, his character was not recast in Universal’s Fast & Furious franchise. The death of Carrie Fisher, who suffered cardiac arrest on a plane, was woven into Disney’s “Star Wars: The Rise of Skywalker.”
“There isn’t a blueprint for replacing any actor when tragedy occurs,” said Shawn Robbins, chief analyst at BoxOffice.com. “It always depends on the film and the situation, but we know that high profile and beloved actors are often irreplaceable within the context of the franchise.”
Robbins said replacing Boseman never seemed like a realistic option for Marvel — or for fans.
“His portrayal of T’Challa was immediately iconic and made indelible by what he and that character meant to generations of Black families and Marvel Cinematic Universe canon,” Robbins said.
A subset of the Marvel fan base felt T’Challa should have been recast, allowing the character to live on. According to a survey by Morning Consult, 30% of 2,200 U.S. adults polled felt the role should have been recast. Another 33% said it should not have been recast, while 37% had no opinion.
The poll was conducted between Oct. 31 and Nov. 2, two years after Boseman’s death.
Perhaps more importantly, fellow “Black Panther” actors supported Marvel’s decision to incorporate Boseman’s death into the sequel.
“Losing your centerpiece, everything changed,” said Lupita Nyong’o, who plays Nakia, in an interview with the Hollywood Reporter last month. “When you say the world rotated around him, it revolved around him, it did.”
“That is not the death of the Black Panther, that’s the whole point,” Nyong’o added. “It’s laying to rest [T’Challa] and allowing for real life to inform the story of the movies.”
Boseman rose to prominence in Hollywood in 2013 after starring as Jackie Robinson in Warner Bros.’ “42” and catapulted into the spotlight after debuting as T’Challa, aka the Black Panther, in 2016’s “Captain America: Civil War.”
His performance in “Black Panther” was considered a milestone for Black representation in the entertainment industry, and he starred in two more MCU films — “Avengers: Infinity War” and “Avengers: Endgame” — before his passing in August 2020.
“The potency of Boseman’s aura, as a fictional king and as a real person, made recasting a preposterous option,” said Robert Thompson, a professor at Syracuse University and a pop culture expert. “Boseman’s passing forced the Marvel Universe to acquiesce to the rules of the actual universe, something it isn’t used to doing.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of the Fast & Furious franchise.

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“Indiscriminate use of hydrogen” could, the International Renewable Energy Agency says, “slow down the energy transition.”
The energy transition can broadly be seen as a shift away from fossil fuels to a system dominated by renewables.
Over the past few years, major economies and businesses have looked to tap into the emerging green hydrogen sector.

Hydrogen has a diverse range of applications and can be deployed in a wide range of industries.
Aranga87 | Istock | Getty Images

Hydrogen use by the G-7 could jump by four to seven times by the middle of this century compared to 2020 in order to “satisfy the needs of a net-zero emissions system,” according to a new report from the International Renewable Energy Agency.
In a foreword to the report, IRENA Director-General Francesco La Camera said it had “become clear that hydrogen must play a key role in the energy transition if the world is to meet the 1.5 °C target of the Paris Agreement.”

Despite this assertion, IRENA’s analysis — which was published on Wednesday, during the COP27 climate change summit in Egypt — paints a complex overall picture that will require a delicate balancing act going forward.
Among other things, it noted that “despite hydrogen’s great potential, it must be kept in mind that its production, transport and conversion require energy, as well as significant investment.”
“Indiscriminate use of hydrogen could therefore slow down the energy transition,” it added. “This calls for priority setting in policy making.”

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The first of these priorities, IRENA said, related to the decarbonization of “existing hydrogen applications.” The second centered around using hydrogen in “hard-to-abate applications” like aviation, steel, shipping and chemicals.
The energy transition can broadly be seen as a shift away from fossil fuels to a system dominated by renewables. Given that it depends on a multitude of factors – from technology and finance to international cooperation – how the transition pans out remains to be seen.

A spokesperson for Hydrogen Europe, an industry association, told CNBC that IRENA was “correct that the deployment of large-scale infrastructure and energy production require large-scale investments, and it is true that it requires energy to produce, store and transport hydrogen.”
The spokesperson said Hydrogen Europe agreed “that any development of hydrogen-related projects should be done responsibly and that certain use applications should be prioritised over others.”
“On how to prioritise, we believe this should be done as much as possible through market instruments that properly value the CO2 emission savings and other aspects (like security of supply), so that consumers can make informed choices,” they added.
A “top-down dogmatic restriction of certain sectors,” such as hydrogen for heating, should be avoided, they said.
Hopes for hydrogen
Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in a wide range of industries.
It can be produced in a number of ways. One method includes electrolysis, with an electric current splitting water into oxygen and hydrogen.
If the electricity used in this process comes from a renewable source such as wind or solar then some call it “green” or “renewable” hydrogen. Today, the vast majority of hydrogen generation is based on fossil fuels.
In a statement published alongside its report, IRENA said the G-7’s goal of net-zero emissions by the middle of this century would “require a significant deployment of green hydrogen.”

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Over the past few years, major economies and businesses have looked to tap into the emerging green hydrogen sector in a bid to decarbonize the way sectors integral to modern life operate.
During a roundtable discussion at COP27 last week, German Chancellor Olaf Scholz described green hydrogen as “one of the most important technologies for a climate-neutral world.”
“Green hydrogen is the key to decarbonizing our economies, especially for hard-to-electrify sectors such as steel production, the chemical industry, heavy shipping and aviation,” Scholz added, before acknowledging that a significant amount of work was needed for the sector to mature.
“Of course, green hydrogen is still an infant industry, its production is currently too cost-intensive compared to fossil fuels,” he said.
“There’s also a ‘chicken and egg’ dilemma of supply and demand where market actors block each other, waiting for the other to move.”
Also appearing on the panel was Christian Bruch, CEO of Siemens Energy. “Hydrogen will be indispensable for the decarbonization of … industry,” he said.
“The question is, for us now, how do we get there in a world which is still driven, in terms of business, by hydrocarbons,” he added. “So it requires an extra effort to make green hydrogen projects … work.” More

View from the Gulf

Rideshare app Careem is offering round-trip taxis from Saudi Arabia to the Qatar World Cup for $532.
The company expects customer demand to balloon during the World Cup, which runs from Nov. 20 to Dec. 18. 
Careem’s key challenge, as with many services in both Qatar and the UAE, will be managing the rapid influx of customers and keeping up with demand.

A general view of the skyline from the Doha Corniche on March 31, 2022.
Nick Potts – Pa Images | Getty Images

DUBAI, United Arab Emirates — The Dubai-based rideshare app Careem is offering inter-country taxi journeys for the 2022 World Cup in Qatar, as millions of soccer fans from around the world descend on the tiny Gulf country for the Middle East’s first-ever go at hosting the massive tournament. 
The offer doesn’t span all of the countries around Qatar but will be accessible to those traveling from two parts of neighboring Saudi Arabia: the city of Dammam, which is 250 miles (402 kilometers) away from the capital Doha and takes roughly 4.5 hours to get there, and Al Ahsa City, roughly 160 miles away from Doha with a journey time of 3 hours.

The fare? A fixed $266 each way (1000 Saudi riyals), or $532 for the round-trip, with a maximum of three passengers per taxi.
But will people opt for a multi-hour road trip rather than just taking a quick flight? Bassel Al Nahlaoui, Careem’s managing director for mobility, thinks so. 
“This trip is really convenient. It’s around 3.5 hours and if you compare that to a flight, it matches the time it takes you to go to the airport and take the flight, land there, etc — except you’re in a car, you’re paying a fraction of the price, and if you split that with a couple of friends it becomes even cheaper,” Al Nahlaoui told CNBC.

Potential challenges

Still, travelers can only book the ride to Doha one day in advance, which could make planning ahead difficult. 
And crossing the Saudi-Qatar border requires taking a shuttle bus, going through border control and meeting a new driver on the other side. But Careem says this part of the journey has also been fully accounted for.

The Careem ride-hailing app on a phone outside the Mall of the Emirates in Dubai, United Arab Emirate.
Christopher Pike | Bloomberg | Getty Images

“What happens is you open your app, you book a car from one of these two cities, a captain [driver] picks you up and drives you to the border,” Al Nahlaoui said. “At the border, we have Careem staff that will help you cross the border, find the captain that’s waiting for you on the Qatari side, and then that’s the last leg of the trip.” 
“And our customer care is monitoring the trip throughout the journey itself,” he added, noting that Careem’s customer support staff numbers have been boosted.  
To this end, contingencies have also been put in place if riders or drivers face problems or unruly behavior, Al Nahlaoui said. 

The official Al Rihla FIFA World Cup Qatar 2022 match ball
Robbie Jay Barratt – Ama | Getty Images Sport | Getty Images

“Our care team supports all verticals … we are able to increase and decrease our support volume nearly by day, that’s how flexible we are and how quickly we are able to adjust to support incoming calls,” he said. “In terms of crisis, we have a specific support line you can access through the app itself.”
In case the drivers themselves face trouble from passengers, “our captains have the same access to care that our customers have,” Al Nahlaoui said. “We have multiple channels for them to get immediate access or different types of support depending on the situation, so that has always been in place for captain support.”

World Cup boosting region’s demand

The rideshare app, which has grown into a “super-app” over the last few years to offer numerous services in addition to rides and was acquired by Uber in 2019, expects customer demand to balloon during the World Cup, which runs from Nov. 20 to Dec. 18. 
But during large events in the region’s cities like international conferences or the Dubai Expo 2020, Careem cars were often difficult to find, and wait times multiplied, leaving many customers frustrated.
Al Nahlaoui says he hopes this won’t be the case this time, and that the company has amply prepared for the massive influx of people. 
Careem, which operates in 80 cities, has “steadily expanded its fleet size by 1,000 additional cars over several months,” to prepare for the World Cup, the company said in a statement earlier this month.
The company expects the total number of Careem vehicles in Qatar — which span taxis, vans, luxury cars and motorbikes — to grow by more than 50% in time for the tournament.

Dubai International Airport. Dubai, United Arab Emirates
Karim Sahib | AFP | Getty Images

Careem’s fleets in nearby cities like Dubai, the commercial capital of the United Arab Emirates, have been growing in tandem, Al Nahlaoui said. 
The region’s top city for leisure tourism is expected to see a massive surge in visitors alongside Doha, as many opt to stay in Dubai but fly to Qatar for individual matches.
This is due at least in part to the struggle that Qatar, with a population of about 3 million, has faced in building up hotel capacity for its 1.2 million anticipated visitors during the tournament period. Qatar Airways is even offering “match day shuttles” that will allow spectators to fly into and out of the country within 24 hours for individual games.
To that end, Careem says it will have dedicated pickup lanes at Qatar’s Doha International Airport and Hamad International Airport providing direct rides to all eight World Cup stadiums. 
And to prepare for the large volume of tourists coming into Qatar and the wider region from elsewhere in Asia, Careem has partnered with other countries’ popular rideshare and payments apps — Grab, Alipay, and Kakao — based in Singapore, China and South Korea, respectively — for direct app integration so that users can book Careem taxis on the apps they already use. Grab is the most-used rideshare app in Southeast Asia. More

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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CNBC’s Jim Cramer on Thursday said that stocks have largely stayed resilient lately because the investors remaining in the market are there to stay.
“People don’t want to trade, they just want to own and own and own some more,” he said.

CNBC’s Jim Cramer said on Thursday that stocks have largely stayed resilient lately because the investors remaining in the market are there to stay.
“The sellers are exhausted. The remaining shareholders, they may just be in it for the long haul. That’s why so much money’s in index funds. People don’t want to trade. They just want to own and own and own some more,” he said.

Stocks closed down on Thursday but managed to rebound from lows reached earlier in the day after St. Louis Federal President James Bullard said in a speech that the central bank hasn’t sufficiently tamped down inflation.
The Dow Jones Industrial Average fell 7.51 points, or 0.02%, after tumbling as much as 314 points during the trading session. The S&P 500 and Nasdaq Composite slipped 0.31% and 0.35%, respectively.
Cramer also pointed out that the market has stayed resilient even during the collapse of FTX. The cryptocurrency exchange once valued at $32 billion filed for bankruptcy last week. 
While there are several reasons the market was able to shrug off the crypto disaster, the most important one is rooted in investors’ weariness, he said. “Nobody cares about crypto because we’ve already been in a bear market for a year.”
Cramer added that this mentality extends to investor sentiment toward the broader market.

“Wall Street gets used to the weakness. As a matter of fact, I think we actually become numb to it as long as we’re not dealing with systemic risk,” he said.

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Jim Cramer on Thursday called on Disney (DIS) to oust CEO Bob Chapek and clean up the company’s ugly balance sheet. Chapek is “incapable of running a fantastic company,” Jim said. “Let’s say it was an NFL team, and the team was losing. … We need someone new at Disney. It’s accountability. Look, if you fired Bob Chapek, you’d make 25 points.” Disney saw wide misses on fiscal fourth-quarter earnings and revenue, driven in part by growing losses at its direct-to-consumer segment, which includes streaming. The poor results prompted the Club to call for a leadership change shortly after the quarterly release on Nov. 8, and Jim doubled down on the stance during Thursday’s “Monthly Meeting” for members. Acknowledging that he’s long been a fan of Disney, Jim said he would consider adding to the Club’s position if the stock price were to dip below $90. However, he cautioned that just because the company has an iconic franchise doesn’t mean it has a stock of equal standing. Shares of Disney closed at $91.45 each on Thursday, down nearly 41% year to date. Jim blasted Chapek’s prioritization of Disney+, the company’s namesake streaming service, over its theme parks. “The balance sheet, crushed by the need to make Disney+ profitable, as if nothing’s changed since the original profitability goal in 2024, must be fixed. That balance sheet is the balance sheet from hell.” He also called on Disney to exercise humility by conceding its mistakes, both with how it handled the quarter and the decision to hire Chapek in the first place. “When someone screws up as much as this guy has, you say to yourself, all right, we made a mistake, we picked the wrong guy,” Jim said. “This is [like] the NFL, people. That’s how much people are paid, and then some.” (Jim Cramer’s Charitable Trust is long DIS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Bob Chapek, Chief Executive Officer of Disney, speaks at the 2022 Disney Legends Awards during Disney’s D23 Expo in Anaheim, California, September 9, 2022.
Mario Anzuoni | Reuters

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Groceries account for more than half of Walmart’s sales, and just 20% of Target’s.
It’s one of the key differences that help explain the companies’ diverging outlooks.
On Tuesday, Walmart raised its outlook for the year. A day later, Target slashed its forecast for the key holiday quarter.

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Walmart’s stock surged this week. Target’s shares plunged.
The rival big-box players are both known for selling an array of products including food, clothing, home goods and kitchen appliances. Both their CEOs — Walmart’s Doug McMillon and Target’s Brian Cornell — stepped into their roles in 2014.

But the retailers issued starkly divergent outlooks this week that underscored their differences, most notably in how much each relies on grocery sales.
On Tuesday, Walmart raised its financial outlook for the year after U.S. same-store sales in the third quarter rose 8.2% from a year ago when excluding fuel. A day later, Target slashed its forecast for the holiday quarter after comparable sales rose just 2.7%, with executives noting weakening trends heading into the season.
Here’s a rundown of four key factors that help explain the split in the earnings results:

Grocery routine vs. Occasional stop

Walmart gets a far bigger share of its sales from groceries than Target, which is helping it draw shoppers looking to save money as inflation squeezes budgets.
Groceries account for 56% of Walmart’s annual revenue, compared with just about 20% at Target, according to company filings. Walmart is the country’s largest grocer by revenue.

Target also sells groceries, but it doesn’t have the same breadth of offerings. For example, stores sell eggs, milk, fruits and vegetables, but do not have full-service bakeries, meat and seafood counters or delis where shoppers can get freshly sliced turkey and cheese.
More customers turn to Walmart to fill out the bulk of their grocery lists, said Neil Saunders, managing director of retail advisory firm GlobalData.
By contrast, shoppers tend to go to Target more for “top-up shopping” — grabbing a few food items when making a run for another reason, such as picking up diapers.
Even as shoppers decide not to buy a TV or a new outfit, they have had to keep replenishing the food in their fridges — a factor that is keeping Walmart’s sales steadier.

A man pushes his shopping cart past bread for sale at a Walmart SuperCenter store in Rosemead, California.
Frederic J. Brown | AFP | Getty Images

Low prices vs. Fun finds

Walmart is known for its mantra of “everyday low prices” and its focus on value has become synonymous with its name. Founder Sam Walton built the company on a no-frills approach aimed at making groceries and other products more affordable.
As Americans increasingly watch their budgets, the big-box retailer’s reputation as a discounter is giving it an edge. And the company has flexed its ability to use its size and scale to keep prices low.
Walmart’s McMillon speaks often about the company being a price leader — and more recently, an inflation fighter. For Thanksgiving, the company said it would hold down the price of foods like turkey and ready-to-heat macaroni and cheese to last year’s levels.
The low prices are attracting new customers, including more higher-income households.
For the past two quarters, the company said about 75% of its market share gains in groceries have come from households with an annual income of more than $100,000 a year.

Walmart vs. Target

Groceries as a percentage of sales:Walmart: 56%, Target: 20%

U.S. same-store sales in the third quarter vs. year ago:Walmart up 8.2%, Target: up 2.7%
U.S. store count Walmart: More than 4,700,  Target: More than 1,900

Source: Company filings

Planned purchases vs. Impulse buys

Target has turned its stores into mini malls offering a range of “cheap chic” items.
It has launched exclusive private brands like All in Motion, a trendy, but lower-priced activewear brand and Hearth & Hand, a home decor line created with celebrity home renovation duo Chip and Joanna Gaines.
It also has shops for popular national brands, including Disney, Ulta Beauty and Apple. And it has a Starbucks where shoppers can grab a latte to sip as they browse.
The assortment has led to jokes about “Target runs,” where shoppers stop by for toothpaste but end up leaving with a lot more.
About 21% of sales at Target come from unplanned purchases, according to GlobalData research from before the pandemic. At Walmart, the figure is about 12%.
In an inflationary environment, those shopping sprees – and impulse buys – become a tougher sell.
“People are starting to say ‘Do I actually need this?'” Saunders of GlobalData said. “When people do that, that affects Target more so than Walmart.”

Shopper spending power

Both retailers draw shoppers from across incomes, but Target’s customers tend to be wealthier. 
The average household income for Target shoppers is about $79,000, versus Walmart’s average household income of about $62,000, according to GlobalData.
During the pandemic, Target benefited from its middle-income customers, who suddenly felt flush with cash from stimulus checks and the money they weren’t spending on dining out, travel or sending kids to summer camp.
Those shoppers helped Target’s sales grow dramatically during the pandemic. Its annual revenue rose about 36% to $106 billion in 2021, the most recent full fiscal year, from 2019.
And even in a third quarter that disappointed Wall Street, its sales climbed 3% to $26.52 billion from a year earlier.
The growth is being fueled in part by investments Target made before the pandemic — such as renovating stores, adding curbside pickup and turning stores in fulfillment centers for online orders.
But now as people go back to traveling, dining out and commuting into the office, Target is competing with more spending priorities. It has also gotten tougher for the company to keep topping its own growth.
“It’s picked a lot of that low handing fruit,” Saunders said. “Now even if there wasn’t this consumer crunch, it would have been much more difficult to eke out gains.”

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Gap on Thursday beat Wall Street’s quarterly revenue expectations, but gave a cautious outlook for the holiday season.
The apparel retailer — which includes its namesake brand, Banana Republic and Athleta — said it anticipates its overall net sales could be down mid-single digits year-over-year in the fourth quarter of fiscal 2022.
Gap’s net income rose to $282 million, or 77 cents per share unadjusted, a dramatic improvement from the year-ago period.

Holiday shoppers take part in early Black Friday shopping deals at the Gap store in Times Square in New York.
Brendan McDermid | Reuters

Gap on Thursday beat Wall Street’s quarterly revenue expectations, but gave a cautious outlook for the holiday season.
The apparel retailer — which includes its namesake brand, Old Navy, Banana Republic and Athleta — said it anticipates its overall net sales could be down mid-single digits year-over-year in the fourth quarter of fiscal 2022.

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Chief Financial Officer Katrina O’Connell said in a news release while the company made progress in reducing its bloated inventory, it will “continue to take a prudent approach in light of the uncertain consumer and increasingly promotional environment as we look to the remainder of fiscal 2022.”
Shares of the company were up roughly 8% in extended trading Thursday. The stock has fallen 27% so far this year and closed on Thursday at $12.72, up more than 5% during the session.
Here’s how the retailer performed during the three-month period ended Oct. 29:

Earnings per share: 71 cents adjusted
Revenue: $4.04 billion vs. $3.8 billion expected, according to Refinitiv consensus estimates.

Wall Street was expecting Gap to break even on a per-share basis, but it wasn’t clear if reported earnings per share were comparable to estimates.
Gap’s net income rose to $282 million, or 77 cents per share unadjusted, a dramatic improvement from a net loss of $152 million, or 40 cents per share, in the year-ago period. Revenue rose 2% to $4.04 billion from $3.94 billion during the same quarter in 2021.

In August, Gap withdrew its full-year guidance, citing company-specific struggles along with high inflation and lower consumer sentiment.
The company is looking for a new CEO after Sonia Syngal departed this summer and playing out a high-profile breakup with Ye’s Yeezy brand. Ye, formerly Kanye West, terminated his contract with Gap in September citing what he called contract breaches and a lack of creative control. Gap removed all Yeezy products from its stores in late October, after West made public antisemitic remarks.
Gap said Thursday it incurred $53 million in impairment charges related to Yeezy Gap.

Comparable sales

The total business’ comparable sales, which track revenue online and at stores open for at least 12 months, rose 1% compared with the year-ago period. Analysts had expected a decline in comparable sales of 3.2%, according to StreetAccount estimates.
Online sales rose 5% over last year and represented 39% of total net sales.
Here’s a closer look at each division:

Gap’s namesake brand, known for denim and basics: comparable sales increased 4% globally and were flat in North America. The company said it got in better shape with inventory, but had weaker sales in the kids and baby categories.
Old Navy, known for casual clothing for adults and kids: comparable sales fell 1%. The brand saw softer demand for baby and kids’ clothing and got hurt by low-income consumers feeling stretched by inflation.
Banana Republic, known as a destination for suiting and dresses: comparable sales rose 10%. It’s looking for new direction after the pandemic disrupted the typical fashion routine – causing more people to work from home a few days a week and dress more casually on the days they head into the office.
Athleta, an activewear brand: comparable sales were flat, as shoppers shifted to buying more outfits for occasions and for work. The business is lapping a time when Americans eagerly stocked up on stretchy leggings, workout tops and other comfortable loungewear when spending time at home. 

The retailer is also shaking up its store footprint, based on the banners that are growing or shrinking. So far this year, the company has closed a total of 29 Gap and Banana Republic stores in North America, O’Connell said on a call with investors. It now expects to close about 30 additional stores this year, as part of a goal to close 350 stores in North America by the end of fiscal 2023.
She said the company is on track to open a total of 30 Athleta stores and now plans to open 10 Old Navy stores by the end of this fiscal year.

Inventory improvements

The retailer has been coping with a glut of apparel that’s out of season, out of style or the wrong size.
Bloated inventory has become a problem for many retailers, including Gap. A year ago, Gap struggled to keep up with demand, as factories shut temporarily because of Covid and goods got stuck in congested ports. The retailer went as far as paying extra to fly in apparel by air freight. But delays and backlogs meant some seasonal merchandise still arrived too late.
Inventory has piled up in recent quarters as consumers seek dressier clothes instead of casualwear. Gap’s inventories were up 34% in the first quarter and 37% in the second quarter. Gap been forced to offer deep markdowns, cutting into profits.
At the end of the third-quarter inventories were up 12% as the company continued to pack and hold merchandise to sell another time. The company also saw higher levels of slow-turning basics and some leftover seasonal products, O’Connell said.
She said the company is “committed to getting our inventories cleaned up so that we don’t continue to carry the excess inventory into next year.”
Old Navy has faced a more specific inventory issue: The division decided to offer more plus-sized women’s apparel, but the move wound up leaving stores with too many extended sizes and not enough of popular sizes. Gap said Thursday that Old Navy made strides in the third quarter to improve its balance of sizes, which drove sales.

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