On March 27, I argued that Gap (NYSE: GPS ) could have years of upside ahead . Unfortunately, in the days and weeks following, GPS stock started on a downward trajectory. Earnings last week, however, show that the leadership of CEO Richard Dickson is beginning to benefit the bottom line.
Gap’s first-quarter 2024 earnings report beat expectations on all key metrics, demonstrating the company’s financial and operational strength. Earnings per share came in at 41 cents versus estimates of 14 cents, while revenue of $3.39 billion beat forecasts of $3.
29 billion. Put simply, these are phenomenal numbers relative to what Wall Street was expecting, which makes me think that analysts are underestimating how well Gap’s turnaround is going. Dickson’s approach is working.
Gap posted its fifth consecutive quarter of market-share gains and positive comparable sales year over year, across all brands. One of the main reasons Gap is bouncing back now is a reinvigoration of its brands. Old Navy, Gap, Banana Republic, Athleta – all those brands reported positive comparable sales gains, with Athleta rising fastest at 5%.
When this kind of rejuvenation occurs, it can do wonders to keep a company on the right side of the retail wave and ensure many new and old customers buy. This is all clearly demonstrated from a financial standpoint. While other retailers are struggling, Gap appears to be in a much more positive spot.
Why? Because its margin is looking solid here. It increased by 410 .