Gap, Inc. (GAP) delivered a solid third-quarter performance that sent shares climbing after Thursday's closing bell, beating expectations on both the top and bottom lines. It's the kind of report that suggests the retailer's turnaround strategy might actually be working.

The Numbers

Gap reported quarterly earnings of 62 cents per share, topping analyst estimates of 59 cents. Revenue came in at $3.94 billion, edging past the $3.91 billion consensus. But the real story here isn't just about beating expectations—it's about the consistent momentum building across the company's brands.

Brand Performance Breakdown

The segment results tell an encouraging story across the board:

Old Navy led the charge with third-quarter net sales of $2.3 billion, up 5% year-over-year. Comparable sales jumped 6%, showing the brand continues to resonate with value-focused shoppers.

Gap brand posted net sales of $951 million, up 6% compared to last year. Comparable sales rose 7%, marking the brand's 8th consecutive quarter of positive comp sales—a streak that suggests the brand refresh is genuinely connecting with customers.

Banana Republic showed mixed results with net sales of $464 million, down 1% from the prior year. However, comparable sales were up 4%, indicating improving underlying trends despite the overall sales dip.

Management's Take

"We are proud to report that Gap Inc.'s third-quarter results exceeded our net sales and margin expectations and delivered the seventh consecutive quarter of positive comparable sales," said CEO Richard Dickson.

Dickson added: "Our strategy is working and our brands are gaining momentum with our three largest brands — Old Navy, Gap and Banana Republic — each posting strong comparable sales."

Looking Ahead

Confidence in the turnaround showed up in the guidance, too. Gap raised its fiscal 2025 revenue outlook to a range of $15.36 billion to $15.4 billion, versus the prior estimate of $15.32 billion.

According to market data, Gap stock was up 4.81% at $24.17 in Thursday's extended trading session.