Gap Stock Soars as Retailer’s Turnaround Plan Bears Fruit
Key Takeaways
Gap Inc. (
GAP
) shares jumped nearly 15% Friday, a day after the clothing retailer posted better-than-expected profit and sales in the key holiday period as its
turnaround plan
continued to produce positive results.
The company behind the Gap, Old Navy, Banana Republic, and Athleta brands reported fourth-quarter
earnings per share (EPS)
of $0.54, while Visible Alpha consensus called for $0.36. Revenue fell 3.5% year-over-year to $4.15 billion, but that also exceeded forecasts.
Comparable store sales
increased 3%, well above the Visible Alpha expectation of 0.68%. CEO Richard Dickson noted that Gap had positive comparable sales in all four quarters of 2024, and “achieved one of the highest
gross margins
in the last 20 years.”
Dickson said in an interview with
Yahoo! Finance
that the results showed “that our brands are resonating” with consumers. He explained that he’s not overly concerned about new Trump administration tariffs, saying that “regardless of inputs and tariffs and everything else, there’s always winners and losers. Our market share performance is showing us that we are doing what’s right.”
Gap anticipates full-year sales growth of 1% to 2% from 2024’s $15.09 billion.
Shares of Gap entered Friday’s session essentially flat over the past 12 months before soaring 14% in recent trading.
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