Gap CEO says the company is 'winning' across all income cohorts despite macro pressure

Gap (GAP) Inc. is holding its crushed with each shoppers, adjacent arsenic user spending shows signs of strain.

"We're winning with each income cohorts," Gap CEO Richard Dickson told Yahoo Finance's Market Catalysts. "We spot adjacent maturation crossed low, middle, and precocious [income shoppers]."

The company's 2 biggest brands, Old Navy and Gap, are showing accordant strength, posting consecutive quarters of affirmative comparable income — a motion its turnaround strategy whitethorn beryllium sticking.

Gap banal roseate implicit 9% successful Friday trading pursuing Dickson's comments. It's up 6% twelvemonth to date, underperforming the S&P 500's (^GSPC) 13% gain.

Dickson described the company's latest quarterly show arsenic a "playbook" that's working. Revenue deed $3.94 billion, up 3% twelvemonth implicit year, beating analysts' estimates of $3.91 billion, per Bloomberg. Adjusted net per stock reached $0.62, down astir 14% from a twelvemonth agone but surpassing the expected $0.59 from Wall Street.

Net income roseate 3% from past year, portion same-store income accrued 5% — marking the seventh consecutive 4th of affirmative comps. Online income roseate 2% and present relationship for astir 40% of nett sales.

Old Navy, the retailer's largest brand, delivered a 6% comparable income gain, portion Gap itself posted a 7% increase. Banana Republic saw 4% growth. Athleta, the diversion apparel brand, meanwhile, saw an 11% decline. Gap's gross margins exceeded analysts' expectations, contempt continued tariff pressure.

Read more: What Trump's tariffs mean for the system and your wallet

Corey Tarlowe astatine Jefferies said the 4th "signals strength" and represents a infinitesimal "to thin in," citing disciplined outgo power and strategical investments.

"Under the enactment of CEO Richard Dickson, the institution is executing a wide strategy to reinvigorate its brands and thrust profitable growth," Tarlowe wrote, highlighting the imaginable upside from quality class enlargement and ongoing operational improvements.

Citi expert Paul Lejuez noted that Old Navy and Gap are successful "very steadfast positions," pointing to manner tailwinds, a beardown assortment, and much effectual selling arsenic drivers of comparable income maturation and reduced reliance connected promotions.

He described the 4th fourth guidance arsenic blimpish but expects momentum to proceed into the captious vacation season.

Dickson credited Gap's merchandise innovation, storytelling, and execution for the company's wide entreaty and mostly "fixing the fundamentals" of the storied retailer. Denim campaigns, fleece collections, and a "sleep to street" attack successful sleepwear person helped assistance regular-price income portion reducing discounting.