By Sabrina Escobar

Gap stock was surging Thursday after the apparel retailer barreled through earnings expectations and delivered stronger-than-expected profit guidance.

Gap stock jumped 13% to $22.02 in after-hour trading Thursday. Shares of Gap have fallen 17% this year, underperforming the S&P 500's 2.4% drop.

Sales for Gap's fiscal fourth quarter, ended February, fell by 3% year over year to $4.1 billion. Analysts had forecast $4.07 billion, according to FactSet.

Gap's earnings of 54 cents a share were better than consensus calls for 38 cents a share.

"These strong results are underpinned by the momentum we're seeing in our operational execution, our culture and the reinvigoration of our brands as they climb in the cultural conversation," said CEO Richard Dickson in a press release.

For the fiscal year ending around January 2026, Gap sees total company sales rising between 1% to 2%. Wall Street had penciled in a 1.7% increase in sales to $15.7 billion.

The retailer projects that operating income will grow between 8% and 10% throughout the year from 2024's $1.1 billion, ahead of analyst projections for a 7% increase.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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March 06, 2025 16:44 ET (21:44 GMT)

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