‘I’d Pay $50 for the Stock’ – Cramer Reacts to Gap’s Stunning Turnaround Numbers

Gap Inc. (NYSE:GAP | GAP Price Prediction) President and CEO Richard Dixon appeared on Mad Money this week to lay out what is quietly becoming one of retail’s more compelling turnaround stories. Eight consecutive quarters of positive comparable sales. A 25-year gross margin high. And a market that, at least for a moment, didn’t seem to care.

Here’s what the numbers actually say, and why the post-earnings selloff deserves a second look.

The Streak That Matters

Dixon didn’t bury the lede on the call: “We achieved our second consecutive year of top line growth. That’s eight consecutive quarters of positive comparable sales. And that’s real consistency.”

Eight quarters is not an accident. That’s two full years of a management team executing a playbook that was widely doubted when Dixon took over. For context, comps were up 3% in Q4, driven by Old Navy up 3%, Gap brand up 7% on top of last year’s 7%, and Banana Republic up 4% for three consecutive quarters.

That Gap brand number is the one Jim Cramer couldn’t get over. He said on air that if someone had told him Gap could post a 7% comp, he would have called it impossible and said he’d pay $50 for the stock. That’s a meaningful statement from someone who has watched this brand struggle for years.

Brand by Brand: What’s Working, What’s Not

The Gap brand is the standout. A 7% comp on top of a 7% comp from the prior year is the kind of stacking that signals genuine brand momentum, not a one-quarter fluke. Gap brand generated $1.054 billion in Q4 net sales, up 8% year over year.

Old Navy, the revenue engine at $2.273 billion in Q4, posted a solid 3% comp. The market seemed to treat this as a miss relative to expectations, which is where the noise crept in. Banana Republic’s three consecutive quarters of comp growth is a quiet win getting overlooked.

Athleta remains the drag. Q4 net sales fell 11% to $354 million, with comps down 10%. Dixon acknowledged the rebuild is ongoing, and there’s no sugarcoating it.

The Margin Story Is the Real Story

Dixon called out something that should stop every investor in their tracks: 2025 marked the highest gross margin in the last 25 years. The company also ended the year with $3 billion in cash and announced a new $1 billion share repurchase authorization alongside a dividend increase.

The forward picture carries real risk. Tariffs are expected to pressure Q1 gross margins by 150 to 200 basis points, and guidance is built on tariff rates prior to February 20, 2026, meaning any escalation changes the math.

But zoom out. A stock trading at roughly 12x earnings with eight straight quarters of positive comps, a 25-year gross margin record, and an analyst consensus target of $30.71 presents a picture that analysts and investors are weighing against near-term tariff headwinds. The turnaround metrics are notable. Whether the macro environment allows the market to reflect them remains an open question.