Gap Inc's stock soared 18.74% in Friday's trading session, as the apparel retailer reported impressive fourth-quarter earnings that surpassed Wall Street estimates. The company's strong performance was driven by solid comparable sales growth across its major brands, including Old Navy, Banana Republic, and the namesake Gap division, reflecting improved profitability and strong holiday demand.

For the fourth quarter, Gap reported adjusted earnings per share of $0.54, comfortably beating analysts' consensus estimate of $0.38. Quarterly net sales came in at $4.15 billion, down 3.5% year-over-year but exceeding Wall Street's expectations of $4.07 billion. The company's gross margin hit a two-decade high of 38.9%, reflecting its efforts to better control inventory levels and improve operational efficiency.

Looking ahead, Gap projected net sales growth of 1% to 2% for fiscal 2025, with operating income expected to increase by 8% to 10%. These projections were largely in line with analysts' estimates, reflecting the company's confidence in its turnaround efforts and ability to navigate the challenging macroeconomic environment, including potential impacts from trade policies.