The Gap’s (GPS) stock is up 23% after the clothing retailer reported strong first-quarter financial results and raised its full-year guidance.
The San Francisco-based company announced earnings per share (EPS) of $0.41 U.S. compared to $0.14 U.S. that was forecast among analysts.
Revenue in the period totaled $3.39 billion U.S., topping Wall Street estimates of $3.29 billion U.S. Sales were up 3% from a year earlier.
Additionally, the company said that all four of its brands — Gap, Old Navy, Athleta and Banana Republic — posted positive comparable sales for the first time in years.
Gap Chief Executive Officer (CEO) Richard Dickson said on the company’s earnings call that the results show his turnaround strategy is working.
Looking ahead, the Gap said it now expects sales to be up slightly compared to previous guidance for flat revenue this year.
The company said it also expects operating income to be in the mid-40% growth range, compared to previous guidance of low-to-mid teens growth.
Dickson became CEO of Gap in August 2023 and has set about revising the company’s portfolio of brands, which retail analysts said had grown stale.
During the earnings call, Dickson said his team is focused on brand storytelling, celebrity endorsements, and positioning the Gap and Old Navy at the centre of the culture.
Earlier in May, actress Da’Vine Joy Randolph wore a ball gown designed by the Gap to the Met Gala in New York, creating buzz for the company.
Before today (May 31), the Gap’s share price had risen 8% so far in 2024 and was trading at $22.52 U.S. per share.
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