Consumers Are Sending These 2 Stocks Soaring After Hours Thursday

Thursday was a down day on Wall Street, as investors continued to weigh all the uncertainties in the world right now. Testimony from Federal Reserve Board Chairman Jerome Powell helped put some context on concerns about inflation and the future path of interest rates, but market participants are still having trouble predicting how various scenarios could affect stock markets.

By the end of the day, the Nasdaq Composite (^IXIC -0.52%) had substantial losses, while the Dow Jones Industrial Average (^DJI 0.06%) and S&P 500 (^GSPC -0.22%) were down more modestly.

Data source: Yahoo! Finance.

After the market closed on Thursday, a couple of companies in the consumer sector released their latest financial reports, and their stocks rose in response. Below, we'll take a closer look at how the businesses of apparel retail-giant Gap (GPS -0.80%) and restaurant-operator Sweetgrass (SG 0.14%) performed, as well as what their prospects look like for the year ahead.

Image source: Getty Images.

Gap bounces back from the pandemic

Shares of Gap were higher by 7%. The retailer's fourth-quarter financial report showed that the company has largely managed to bounce back from the problems that the COVID-19 pandemic created, although it still faces some challenges.

Gap's numbers were mixed. Fourth-quarter revenue was up 2% year over year, climbing back to within 3% of the sales Gap had in the fourth quarter of fiscal 2019, before the pandemic began. However, Gap posted a modest loss of $16 million, or $0.04 per share, reversing a sizable profit in the year-earlier period.

Full-year fiscal 2021 results looked more favorable, though. Revenue was up 21% year over year and was nearly 2% above 2019's levels, and full-year earnings of $0.67 per share gave investors news of a welcome reversal from a larger loss in fiscal 2020.

Best of all, Gap expects to keep its momentum heading into 2022. Full-year sales are expected to grow by low-single-digit percentages, while full-year earnings of $1.85 to $2.05 per share could be as much as triple what the company posted for fiscal 2021. That's the direction in which Gap shareholders want to see the company move, and that explains much of the share-price jump after hours Thursday.

Sweetgreen serves up delicious financials

Meanwhile, shares of Sweetgreen did even better, jumping almost 20% after hours on Thursday afternoon. The salad-serving fast-casual restaurant chain  delivered impressive results in its financial report for the fourth quarter of 2021.

Sweetgreen's numbers showed the extent of the company's growth. Revenue of $96.4 million for the quarter was up 63% year over year to $96.4 million, with same-store sales jumping 36%. Average unit volumes for restaurants open for at least 12 months were up from $2.2 million a year ago to $2.6 million in the most recent quarter. Restaurant-level profit turned positive, although total net losses widened by more than half year over year.

Sweetgreen's full-year results showed similar patterns. Revenue rose 54% on a 25% rise in same-store sales, but net losses widened by about 10% from fiscal 2020.

Looking ahead, Sweetgreen expects to keep expanding in fiscal 2022 with at least 35 new restaurants, and calls for revenue of between $515 million and $535 million. That's very much in line with trends toward healthy eating, and investors seem to be getting on board with Sweetgreen's restaurant concept and its future prospects.