Spectacular Gap Results Drive Shares Higher

By Douglas A. McIntyre Published May 31, 6:40AM EDT

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Spectacular Gap Results Drive Shares Higher — © Dimas Ardian / Getty Images News via Getty Images

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Gap Inc. (NYSE: GPS | GPS Price Prediction) has finally posted strong quarterly results.
Its stock has benefited from the long-awaited signs of a turnaround.

Gap Inc. (NYSE: GPS) has endured years of falling sales, several chief executive officers, store closings, and turnaround plans. Management finally found the right formula and posted strong quarterly results, which pushed up its share price.

Gap’s stock price has increased 20% in the past five years, compared to the S&P 500’s huge 90% run-up. However, investors recently started to believe in its plans. As measured from the start date of those five years, the stock was down 67% in May of last year.

Gap owns the Gap, Old Navy, Banana Republic, and Athleta brands. In the most recent quarter, revenue rose 3% to $3.4 billion. Same-store sales rose by the same amount. Gap has 3,571 store locations spread across its brands. Earnings came in at $0.42, which compared to a loss of $0.05 in the same quarter the year before.

Perhaps the most important part of the earnings was that all brands showed improvement. Comparable store sales for both Old Navy and the Gap brand rose 3% year over year. Banana Republic was up 1%, and Athleta rose 5%. Last year, all but the Gap brand showed a comparable store sales decline.

CEO Richard Dickson, hired in August 2023 from Mattel, has shown that the board made the right decision. “Our first quarter results are giving us confidence to raise both sales and operating income guidance for the full year,” he said as earnings were announced.

Gap still has to contend with competitors Abercrombie & Fitch, Talbots, Macy’s, J.Crew, Forever 21, American Eagle Outfitters, and several larger retailers. However, it has shown investors it is still in the game.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.