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📌 Main takeaway:
Key takeaways
- Gap reported better-than-expected results as sales at its namesake stores led the gains. Comparable store sales increased 5%.
- GAP also raised its forecast as it sees a strong start to the main holiday shopping season.
Gap shares took off after the apparel retailer beat earnings and revenue estimates and boosted its guidance on strong demand at its namesake locations.
The company, which also operates the Banana Republic, Old Navy and Athleta chains, reported third-quarter fiscal 2025 adjusted earnings per share of $0.62, with revenue rising 3% to $3.94 billion. Analysts surveyed by Visible Alpha were looking for $0.58 and $3.91 billion, respectively.
Why is this important to investors?
Gap’s enthusiasm about its holiday positioning may provide some optimism for investors looking for clues about consumer health, with the company changing its year-end sales forecast to reflect more confidence.
The stock recently rose nearly 5% as broader markets fell on the final trading day of the week. He reads Investopedia The full daily markets tour is here.
GAP’s (GAP) total comparable store sales increased 5%. Shares rose 7% in Gap, 6% in Old Navy, and 4% in Banana Republic. Comparable sales were down 11% at Athleta.
“The strength of our Q3 and quarter-to-date performance positions us well for the holiday sales season,” said CEO Richard Dixon. The company now expects fiscal 2025 sales to increase 1.7% to 2%, up from its previous estimate of 1% to 2%, and expects operating margin to grow approximately 7.2%, above the previously released range.
The news lifted GAP shares into positive territory for the year, providing investors with a measure of optimism after the ups and downs of 2025.
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