Gap Stock Jumps as Old Navy Parent Boosts Outlook

Shares of The Gap (GAP) surged Friday, after the apparel retailer reported stronger-than-expected third-quarter results and boosted its full-year sales outlook.

The company behind the Old Navy, Banana Republic and Athleta brands now anticipates fiscal 2024 sales to grow between 1.5% and 2%—compared with its earlier guidance of “up slightly.”

The higher guidance comes as quarterly results topped estimates. Gap posted third-quarter revenue of $3.83 billion, up 2% year-over-year, and earnings per share (EPS) of 72 cents.

Analysts had expected third-quarter revenue of $3.81 billion and EPS of 55 cents, according to estimates from Visible Alpha.

Results Show CEO Dickson’s Success in Reviving Brands

The results mark continued progress for the retailer under Chief Executive Officer (CEO) Richard Dickson, who joined from toymaker Mattel, where he reinvigorated the Barbie franchise.

He took the top role in August last year and has since been executing an ambitious turnaround plan after years of sluggish growth. Gap’s brands, which flourished when mall culture was in its heyday, had been struggling to draw in younger Gen Z and Millennial consumers, according to a 2022 CNN article.

“Consistent execution of our strategic priorities, including the rigor and repetition we’re applying to our brand reinvigoration playbook, is making us a stronger company and demonstrates our continued progress in unlocking Gap Inc.’s full potential,” Dickson said in a statement, adding that the holiday season “is off to a strong start.”

Gap shares rose 7% in intraday trading Friday, bringing its year-to-date gain to almost 15%.