Why The Gap Stock Jumped Today

Shares of apparel retailer The Gap (NYSE: GAP) jumped on Friday after the company reported financial results for the third quarter of 2024. As of 11:30 a.m. ET, The Gap stock was up about 9% but it had been up nearly 18% earlier in the day.

The big story here is that The Gap's Q3 profits were materially better than what investors had expected. The company's net sales growth of 2% was nothing to write home about. That said, investors were encouraged to see growth for most of its brands, including 5% same-store-sales growth for its Athleta chain. But the growth was still modest compared to its improvements with profitability.

Gap's Q3 gross margin was only slightly better than it anticipated but this led to a big outperformance for its operating profit. The company's Q3 operating margin was 9.3%. This was the best Q3 operating margin it's had in seven years and it led to a meaningful 42% jump in operating income.

Source Fool.com