:max_bytes(150000):strip_icc()/GettyImages-2233928832-b6903dcca2a949839e9ea30e494e94c3.jpg "This Clothing Chain Feels Good About the Holiday Season. Its Stock Is Rising.")
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Key Takeaways
- Gap posted better-than-expected results as sales at its namesake stores led the gains. Comparable store sales increased 5%.
- Gap also raised its outlook as it sees a strong start to the key holiday shopping season.
Shares of Gap took off after the clothing retailer exceeded 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 up 3% to $3.94 billion. Analysts surveyed by Visible Alpha were looking for $0.58 and $3.91 billion, respectively.
Why This Matters to Investors
Gap’s enthusiasm about its positioning for the holiday season may give investors looking for clues about consumer health some optimism, with the company shifting its end-of-year sales outlook to reflect more confidence.
The stock was recently up some 5% as broader markets slipped on the last trading day of the week. Read Investopedia’s full daily markets roundup here.
Gap’s (GAP) overall comparable store sales increased 5%. They rose 7% at Gap, 6% at Old Navy, and 4% at Banana Republic. Comparable sales slumped 11% at Athleta.
The “strength of our third quarter and quarter-to-date performance positions us well for the holiday selling season,” said CEO Richard Dixon. The company now sees fiscal 2025 sales increasing 1.7% to 2%, up from its previous estimate of 1% to 2%, and expects its operating margin to grow approximately 7.2%, above its previously issued range.
The news lifted Gap shares into positive territory for the year, offering investors a measure of optimism after an up-and-down 2025.
