About six months into the top job at Gap (GPS), Richard Dickson finds himself settled in and ready to take a crack at reinventing the mall-based retailer.
“We’ve got some really great demonstration of early signs of brand reinvigoration. And the efforts that we’ve been making on running a better business, operational and financial rigor, are showing up in the numbers,” Dickson told Yahoo Finance by phone on Thursday as Gap posted much better-than-expected Q4 earnings.
After a lengthy search, Gap named the former Mattel (MAT) COO as CEO, effective August 2023. Dickson, who sat on Gap’s board before the appointment, was one of the Mattel executives behind the resurgence of Barbie, helping bring the doll to movie theaters in 2023.
Since taking over, Dickson has been on the road, visiting distribution centers and stores while meeting with top decision-makers at the retailer. The group diagnosed long-running issues (clunky website, less-than-cool products, supply chain inefficiencies) that have plagued the company’s performance and stock price.
Gap’s overall results for the holiday quarter show Dickson and his mostly new leadership team have a lot of work to do, though signs of improvement have emerged (particularly in Old Navy’s sales trends and Gap’s margins).
“This is not a portfolio with challenges that happened overnight, and we’re not going to turn it overnight,” said Dickson. “But you’re starting to see where the new leadership and prioritization is starting to show up.”
Here’s how Gap performed on its earnings day.
The earning rundown
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Net sales: +1% year over year to $4.3 billion vs. $4.21 billion estimate
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Comparable sales:
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Old Navy: +2% compared to -7% last year, vs. +2.75% estimate
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Banana Republic: -4% compared to -3% last year, vs. -4.16% estimate
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Gap: +4% compared to -4% last year, vs. +1.2% estimate
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Athleta: -10% compared to -5% last year, vs. -10.9% estimate
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Gross Margin: 38.9% compared to 33.6% last year, vs. 35.9% estimate
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Diluted EPS: $0.49 vs. $0.23 estimate
What else caught our attention
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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