What Happened?
Shares of clothing and accessories retailer Gap (NYSE:GAP) jumped 9.1% in the afternoon session after the company reported third-quarter results that topped Wall Street's expectations for both revenue and profit.
Revenue grew 3% year on year to $3.94 billion, driven by a solid 5% increase in same-store sales, a key metric tracking performance at established stores and e-commerce. The company also significantly outperformed on profitability, with its adjusted EBITDA (a measure of profit) coming in 15% above analysts' forecasts. This strong performance demonstrated healthier demand and better operational efficiency, boosting investor confidence.
The shares closed the day at $24.96, up 8.4% from previous close.
Is now the time to buy Gap? Access our full analysis report here.
What Is The Market Telling Us
Gap’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 22.2% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
Gap is up 5.6% since the beginning of the year, but at $24.94 per share, it is still trading 13.7% below its 52-week high of $28.89 from May 2025. Investors who bought $1,000 worth of Gap’s shares 5 years ago would now be looking at an investment worth $957.06.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.