The largest specialty apparel company in the US, Gap, reported strong financial results for its third quarter, praising the increase in comparable sales following its viral “Better in Denim” campaign with girl group Katseye.
Gap’s stronger-than-expected results come as apparel sales stay generally weak across the industry and consumers cut back on spending.
According to the company, Gap’s Q3 net sales were $3.9 billion, up 3% year over year, while comparable sales were up 5% year-over-year.
Gap’s in-store sales rose 3% from last year, while online sales increased 2% and accounted for 40% of total net sales.
Gap President and CEO, Richard Dickson told investors: “We are proud to report that Gap Inc.’s third quarter results exceeded our net sales and margin expectations and delivered the seventh consecutive quarter of positive comparable sales. Our strategy is working and our brands are gaining momentum with our three largest brands – Old Navy, Gap, and Banana Republic – each posting strong comparable sales.”
Looking ahead, Dickson said, “The strength of our third quarter and quarter-to-date performance positions us well for the holiday selling season and gives us the confidence to increase our full year net sales outlook to the high end of our prior guidance range and raise our full year operating margin outlook. We are focused on executing with excellence and finishing the year strong.”
For Gap’s fiscal year, the company now anticipates sales at the higher end of its earlier forecast, expecting a 1.7% to 2% increase, aligning with analyst predictions. Gap stated that its fiscal 2025 outlook “includes the estimated effect of tariffs”.
Despite the brand exceeding Wall Street expectations, Gap stock dropped 4% in premarket trading today.
By CEO NA Editorial Staff
