US speciality apparel retailer Gap has raised its full-year 2024 outlook for net sales, gross margin and operating income growth beyond previous expectations.
The company now anticipates a net sales increase of between 1.5% and 2% on a 52-week basis and expects operating income growth in the mid-to-high sixtieth percentile.
The updated guidance follows a 2% increase in net sales for the third quarter of fiscal year 2024, reaching $3.82bn, compared to $3.76bn in the same period of fiscal 2023. It saw comparable sales increase 1% year-on-year.
The company, which owns Old Navy, Gap, Banana Republic and Athleta, saw individual brand performances contributing to the overall increase.
Old Navy's net sales grew by 1% to $2.2bn, while Gap's net sales also saw a 1% rise to $899m.
Banana Republic experienced a 2% increase in comparison to the previous year. Athleta stood out with a 4% jump in net sales amounting to $290m.
Despite a 2% decrease in store sales, the company maintained a strong global presence with 3,603 stores across 40 countries, 2,544 of them company-operated.
Online sales, however, surged by 7%, now accounting for 40% of total net sales.
For the quarter ending November 2024, Gap's net income was notably higher at $274m compared to $218m during the same period of 2023.
Diluted earnings per share increased from $0.58 in the third quarter (Q3) of the financial year 2023 (FY23) to $0.72 in Q3 FY24. The company also reported an improvement in gross margin to 42.7%, up by 140 basis points from the previous year.
Operating income reached $355m, indicating an operating margin of 9.3%. Operating expenses decreased slightly from $1.30bn to $1.28bn.
Gap president and CEO Richard Dickson said: “I'm proud that Gap Inc delivered another successful quarter, growing net sales for the 4th consecutive quarter and gaining market share across all brands while meaningfully expanding operating margin.
“Consistent execution of our strategic priorities, including the rigour and repetition we’re applying to our brand reinvigoration playbook, is making us a stronger company and demonstrates our continued progress in unlocking Gap Inc’s full potential.”
