Gap rises as Q3 sales beat expectations following viral denim ad campaign
US-based apparel maker Gap is up 4% in early trading on Friday after posting better-than-expected Q3 results after the bell on Thursday.
The clothing and accessories retailer reported that comparable sales rose 5% in the third quarter — the strongest growth it’s seen since its 2017 holiday quarter, per CNBC — surpassing Wall Street’s forecast of 3.1%, according to data compiled by Bloomberg.
Adjusted earnings per share came in at $0.62, some ~6% ahead of consensus expectations. The company also hiked its sales guidance for the year, and now expects revenue to grow 1.7% to 2% (up from 1% to 2%).
Gap Inc. CEO Richard Dickson tapped the company’s marketing efforts as a major factor in its sales pop — in particular, the “Better in Denim” ad campaign starring pop group Katseye, which went viral after its release back in August.
“With more than 8 billion impressions and 500 million views, Better in Denim culminated in a global cultural takeover,” Dickson said on the earnings call, helping to generate “significant traffic” and “double-digit growth in denim.”
Gap’s marketing pivot to attract “highly engaged” Gen Z consumers — and, as Business Insider put it, “[bridge] the gap” between generations — is part of the brand’s broader push to diversity beyond apparel, following fears of an income hit from looming tariffs earlier this year.
Gap Inc. CEO Richard Dickson tapped the company’s marketing efforts as a major factor in its sales pop — in particular, the “Better in Denim” ad campaign starring pop group Katseye, which went viral after its release back in August.
“With more than 8 billion impressions and 500 million views, Better in Denim culminated in a global cultural takeover,” Dickson said on the earnings call, helping to generate “significant traffic” and “double-digit growth in denim.”
Gap’s marketing pivot to attract “highly engaged” Gen Z consumers — and, as Business Insider put it, “[bridge] the gap” between generations — is part of the brand’s broader push to diversity beyond apparel, following fears of an income hit from looming tariffs earlier this year.
