Gap Inc. shares surged 17% in after-hours trading following an impressive quarterly report that surpassed expectations, signaling the success of CEO Richard Dickson’s turnaround strategy. The apparel retailer, which operates brands like Old Navy, Banana Republic, Athleta, and its namesake label, reported a 3% growth in comparable sales during the holiday quarter, ahead of the anticipated 1% increase. For the fiscal fourth quarter, Gap earned 54 cents per share, beating the expected 37 cents, on revenue of $4.15 billion compared to the forecasted $4.07 billion. Net income for the quarter ending February 1 was $206 million, or 54 cents per share, up from $185 million, or 49 cents per share, the previous year. Sales were down slightly at $4.15 billion from $4.30 billion a year earlier, partly due to an extra selling week in the prior year. Looking ahead, Gap expects sales growth between 1% and 2%, aligning with analyst expectations of a 1.7% increase. Despite challenges from President Donald Trump’s trade policies, Dickson emphasized minimizing consumer impact through supplier negotiations and cost management. CFO Katrina O’Connell confirmed that current tariff impacts are integrated into the company’s guidance, with minimal margin effects expected. Under Dickson’s leadership, Gap achieved its highest gross margin in over 20 years at 41.3% in fiscal 2024. The company’s brand revitalization efforts have shown results, with notable celebrity endorsements and improved performance from the Banana Republic brand. — news from CNBC
