After years of being beaten by other clothing retailers, Gap Inc. (NYSE: GPS) is finally showing signs that its turnaround, which has faced several false starts, is successful. Recent earnings show that the company has renewed stability across its brands. The figures also exceeded Wall Street’s expectations, which drove its stock higher.
Investors saw early signs of new success a few months ago. Over five years, Gap shares fell 25% while the S&P 500 rose by 88%. In the most recent year, the stock was up 60%, compared to a 29% increase in the S&P 500. New earnings pushed the stock another 10% higher.
For the most recent quarter, Gap’s total revenue was flat at $4.3 billion after years of decline. Net income was $185 million, compared to a loss of $273 million in the same quarter a year ago. Gap President and Chief Executive Officer Richard Dickson commented, “The fourth quarter exceeded expectations on several key metrics along with market share gains, reflecting improved trends at Old Navy and Gap and strong continued progress on margins and cash flow.”
Among the best ways to look at Gap’s performance is via its brands. Its largest brand, Old Navy, posted a revenue increase of 6% to $2.3 billion in the quarter. Deeply troubled flagship brand Gap has started to pull out of a nosedive. Its revenue dropped only 5% to $1 billion. The other large brand, Banana Republic, posted a revenue drop of 2% to $567 million. (These 24 clothing brands are still made in America.)
Flat revenue is not usually something to cheer about. However, after repeated failures in getting its business stable, Gap management has proven it has finally reached that milestone.
Travel Cards Are Getting Too Good To Ignore (sponsored)
Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.
We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.
It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.
We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
