Gap’s third quarter net sales of 3.8 billion dollars were up 2 percent compared to last year and comparable sales were up 1 percent year-over-year.

As a result of its strong third quarter results, the company is raising its full year outlook for net sales, gross margin and operating income growth compared to prior expectations.

"I'm proud that Gap Inc. delivered another successful quarter, growing net sales for the 4th consecutive quarter and gaining market share across all brands while meaningfully expanding operating margin," said the company’s president and CEO, Richard Dickson.

Highlights of Gap’s Q3 results

Store sales decreased 2 percent in the third quarter and the company ended the quarter with 3,603 store locations in about 40 countries, of which 2,544 were company operated.

Online sales increased 7 percent compared to last year and represented 40 percent of total net sales.

The company’s gross margin of 42.7 percent increased 140 basis points versus last year's gross margin, while operating income was 355 million dollars and operating margin reached 9.3 percent.

Gap reported net income of 274 million dollars and diluted earnings per share of 72 cents.

Gap posts sales growth across brand portfolio

Third quarter net sales at Old Navy of 2.2 billion dollars were up 1 percent, while comparable sales were flat.

Gap brand net sales of 899 million dollars were up 1 percent and comparable sales were up 3 percent representing the fourth consecutive quarter of positive comparable sales at the brand.

Banana Republic net sales of 469 million dollars were up 2 percent but comparable sales were down 1 percent. The brand saw strength in its men's business during the quarter.

Athleta net sales of 290 million dollars were up 4 percent and comparable sales were up 5 percent.

Gap raises fiscal 2024 outlook

"Holiday is off to a strong start. Our performance year-to-date gives us the confidence to raise our full year outlook for sales, gross margin and operating income growth," added Dickson.

The company now expects net sales to increase between the range of 1.5 percent to 2 percent, approximate 220 bps expansion in gross margin and operating income between mid to high 60 percent growth range.