Gap Inc. reported an 8% increase in total sales for its fourth quarter of 2017 while its same-store sales beat market expectations. The solid results sent the stock soaring after the earnings report.
The Old Navy brand continues to be a strong spot for the company, where comparable store sales grew 9% during the quarter.
Gap believes its Old Navy and Athleta brands have good potential for growth going forward with sales likely to exceed $10 billion and $1 billion respectively. The company plans to open more stores to focus on these two brands going forward.
As you may recall, Old Navy had last month fired three of its employees for racially profiling a customer. The company said it took swift measures to ensure the brand’s reputation was not dented.
The Gap and Banana Republic brands, which had been seeing softness, saw some recovery this quarter. Comparable store sales at the Gap brand remained flat while Banana Republic posted a slight pickup. However, parent company Gap Inc. will go forward with its plan to close Gap and Banana Republic brand stores this year.
In February, Jeff Kirwan, CEO of the Gap brand, had stepped down from his role after failing to revive the ailing brand.
The retailer has been struggling to keep up with fashion chains such as H&M, Zara and Forever 21 as online shopping trends.