GAP EARNINGS SOAR - UP 1100%+ IN LAST YEAR! STOCK RISES ON ANALYST UPGRADE TO OVERWEIGHT
Gap Hyperdrive; Wunderkind Zac Posen in as Creative Director
It has been over a year since Richard Dickson, the man credited with driving the resurgence and success of Barbie at Mattel, took on the role of CEO at Gap Inc.
At Mattel, Dickson served as President and COO. Prior to becoming Gap’s CEO, he joined its Board of Directors in 2022, while still at Mattel.
He officially assumed the role of Gap CEO on August 22, 2023—and what a whirlwind it has been since.
At first, the connection between his experience at Mattel and the world of apparel retailing wasn’t immediately clear, though his background does include some relevant experience in that space.
Prior to Mattel, Dickson spent time at both The Jones Group and Bloomingdale’s. It appears Gap was seeking to hire a branding expert and that is exactly what they got.
New Creative Director
Dickson has created a new role for designer Zac Posen, who has joined Gap Inc. as Creative Director.
A few of Posen’s designs are featured in this post, with the full collection set to launch early next year. While Posen will contribute across multiple banners, his primary focus will be on the flagship brand, Gap.
I have no words for how stunning the Posen coated denim jacket is (pic at top)!
Results
Earnings in the last year are up over 1100%.
Highlights from the last quarter, reported on November 21, include:
Net sales increased 2% versus last year with comparable sales up 1%
Operating margin of 9.3% improved 270 basis points versus last year
Market share gains across all brands in the quarter
Raises outlook for fiscal 2024 net sales, gross margin and operating income growth
Gap Inc.’s stock rose in early December when JPMorgan Chase analyst, Matthew Boss boosted his rating on Gap to Overweight from Neutral. The stock popped 4% on that news.
Enhancements
Since 2014, Gap has approximately halved its number of stores in the North American market. The store count had been 968 and now totals 472.
Gap Inc. continues to emphasize store curation, including at its Banana Republic brand. According to CEO Richard Dickson, “We’re optimizing and repositioning our store footprint, focusing on locations that are relevant to our customers and well-suited to reflect the new aesthetic.”
In addition, Gap Inc. is introducing several upgrades and changes across all its brands. These initiatives include new collaborations aimed at attracting a broader customer base, digital enhancements to improve the shopping experience, and increased engagement and outreach through social media influencers.
I personally see big things for Gap Inc. - more to come!