A shopper bought the Black Friday early purchase on Thanksgiving, November 28, 2024 at the Citadel Outlets Mall in Los Angeles.
Robyn Beck | AFP | Getty Images
gap Another quarter on Thursday blew up expectations, showing that its turnaround time under CEO Richard Dickson was better and faster than Wall Street had expected.
Stocks jumped 12% in Thursday’s expansion trading.
StreetAccount said that during the most important holiday quarter, the clothing retailers behind the Old Navy, Banana Republic, Athletics and their eponymous flag beat the bottom line and bottom line expectations, and comparable sales rose 3% and 1% ahead of schedule.
According to an LSEG survey of analysts, GAP’s performance in the fourth quarter of fiscal year compared to Wall Street expectations:
- Earnings per share: 54 cents, estimated at 37 cents
- income: $4.15 billion vs. $4.07 billion
The company reported net income for the three months ending February 1 was $206 million, or 54 cents per share, compared with $185 million or 49 cents per share in the same period last year.
Sales fell to $4.15 billion, down about 3% from $43 billion a year ago. Like other retailers, Gap benefited from the additional sales week a year ago, which made a negative comparison.
According to LSEG, GAP expects sales to grow by 1% to 2%, meeting expectations of 1.7%. In the quarter, its guidance was slightly weaker than expected. According to LSEG, sales are expected to “slightly increase” compared to Wall Street’s estimated growth of 1.5%.
It’s about a year and a half since Dixon took over as CEO of Gap. Under his guidance, the company regained its growth and repaired its brand image – in fiscal 2024, over 20 years, giving its highest gross margin at a price of 41.3%.
The former Mattel Executive, once considered a revival of Barbie Empire, brought the same ability to revive Gap’s brand. After a strong fourth consecutive quarter, the strategy appears to be enduring.
Gap’s creative designer Zac Posen’s outfit was recently worn by celebrities such as Timothee Chalamet, and even the company’s underperforming Banana Republic brand has resumed growth. Its athletic and leisure brand athletes are still working hard, but the company has stabilized its bleeding and no longer shrinks.
Here are the performance of each brand in the quarter.
Old Navy
According to StreetAccount, GAP’s largest brand segment is $2.2 billion, with comparable sales up 3% and expected 0.7%. The brand sees the power of denim and sportswear.
gap
Comparable sales of banners of the same name grew 7%, estimated to be above 0.8%, according to StreetAccount. Chris Goble, the brand’s longtime chief product officer, left Dickie’s in October, but the company filled the position internally after leaving. Dickson told CNBC in an interview that the brand has “excellent leadership” and “extraordinary talent.”
Banana Republic
Safari Chic, Office apparel brands can see sales up 4% compared to sales, while analysts expect them to shrink by 1.5%. It continues to build strength in men’s clothing, but still has no CEO. Dickson hopes the company will update the role “soon.”
track and field
Dickson explained that comparable sales of the casual brand fell 2% after failing to provide the appropriate types of products that its core consumers needed in the quarter. Analysts have no expectations for comparable sales of Athleta.
“We’ve certainly been in the cultural dialogue again, and it reinforces that we do believe in the brand. We have long-term opportunities, but we do have work to reset the brand,” Dixon said. “In the fourth quarter, very specifically, you know, we need to do more to inspire our core consumers, and during the holidays, we did a great job of attracting new consumers. We lacked the product depth of our core customers during that holidays, and we did a great job.”
