Gap, Inc. (NYSE:GPS) shares rose around 12% since the company’s reported Q3 results on Thursday, with revenue of $4.04 billion coming in better than the Street estimate of $3.81 billion. EPS was $0.71, beating the Street estimate of $0.00. Comparable sales rose 1% year-over-year. Online sales increased 5% year-over-year, representing 39% of the company’s total revenue.
Sales growth was driven by an improving product assortment at Gap and Old Navy, while Athleta continued to experience softness as consumers shift away from athleisure and into workwear. Gross margin showed improvement as the company focuses on cost-cutting initiatives, although higher markdowns continued to offset this.
The company anticipates its total net sales in Q4 to decrease by mid-single digits year-over-year.