The Gap’s stock is soaring, back to where it was in 1998... and 2012, and 2017, and 2020, and 2024

The Y2K mall brand might be cool again — at least on Wall Street.

Yesterday, Gap reported operating profits for its fiscal year 2024 of $1.1 billion, up more than 80% on last year’s efforts, sending its shares up 13% in trading this morning.

It’s a sharp turnaround for the iconic but often struggling American retailer, which shrunk its footprint by closing over 340 stores and cutting 2,300 corporate jobs since 2020. At the heart of Gap’s struggles was Old Navy, which is actually the company’s largest brand, accounting for 56% of its sales. The label has lagged in recent years — first by being slow to pivot away from the pandemic-era comfort wear, then stumbling on an ambitious inclusive sizing rollout that left stores overloaded with XXLs and XSs while running out of core medium sizes, per the WSJ.

Sales were consistently slipping until August 2023, when ex-Mattel exec Richard Dickson, the man behind Barbie’s revival, took the top job. Then came Zac Posen, the “Project Runway”-famous designer, as Gap’s creative director, bringing the ’90s fashion staple back into the spotlight — from celebrities gracing Met Gala red carpet in a Gap gown to Timothée Chalamet rocking Gap at an Oscars dinner.

The results are starting to show: Old Navy just delivered one of its highest annual net sales ever, while the Gap brand posted a 7% jump in comparable sales, now “back in the cultural conversation,” Dickson said in yesterday’s earnings call.

Gap also isn’t sweating tariffs. According to the CFO, the company sources less than 10% from China and under 1% from Mexico and Canada combined.

Of course, even with Gap soaring this morning, the company’s stock remains stuck in the $10 to $30 range that it’s been in for much of the last three decades.

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