Raphael Stevens

Gap beat Wall Street’s expectations on the top and bottom lines for its all-important holiday quarter.
The apparel giant behind Old Navy, Athleta, Banana Republic and its namesake chain has been in the midst of a turnaround plan under CEO Richard Dickson.
In fiscal 2024, Gap posted its highest gross margin in more than 20 years.

A shopper carries her early Black Friday purchases on Thanksgiving Day, November 28, 2024, at the Citadel Outlets shopping center in Los Angeles. 
Robyn Beck | AFP | Getty Images

Gap on Thursday posted another quarter that blew away expectations, indicating its turnaround under CEO Richard Dickson is working better – and faster – than Wall Street anticipated. 
Shares jumped 17% in extended trading Thursday.

The apparel retailer behind Old Navy, Banana Republic, Athleta and its namesake banner beat expectations on the top and bottom lines during the all-important holiday quarter and saw comparable sales grow 3%, ahead of expectations of up 1%, according to StreetAccount.  
Here’s how Gap did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 54 cents vs. 37 cents expected
Revenue: $4.15 billion vs. $4.07 billion expected

The company’s reported net income for the three-month period that ended Feb. 1 was $206 million, or 54 cents per share, compared with $185 million, or 49 cents per share, a year earlier. 
Sales dropped to $4.15 billion, down about 3% from $4.30 billion a year earlier. Like other retailers, Gap benefited from an extra selling week in the year-ago period, which negatively skewed comparisons.
In the year ahead, Gap is expecting sales to grow between 1% and 2%, in line with expectations of up 1.7%, according to LSEG. For the current quarter, its guidance was slightly weaker than anticipated. It’s expecting sales to be “flat to up slightly,” compared to Wall Street estimates of up 1.5%, according to LSEG. 

“We’ve been operating in a highly dynamic backdrop for the last few years, and we’re expecting the same for fiscal 2025,” said Gap’s finance chief Katrina O’Connell on a call with analysts. “As a result, we’ve taken a balanced view with our guidance and remain focused on controlling the controllables.”
Like other retailers caught in the midst of President Donald Trump’s trade war with China, Canada and Mexico, Gap has been working to figure out the impact new duties will have on the company. In an interview with CNBC, Dickson said less than 1% of its product comes from Canada and Mexico, combined, and less than 10% comes from China.
When asked if the company will raise prices, Dickson said the “goal is to minimize the impact to the consumer.”
“We’re going to be working with our suppliers. We’re looking at our cost base, and we’ll need to balance that with always protecting the structural economics of the business,” said Dickson.
O’Connell added tariffs, as they stood on Thursday, were embedded into the company’s guidance and said any impact to margin is expected to be “relatively minimal.”
It’s been about a year and a half since Dickson took over as Gap’s CEO. Under his direction, the company has gotten back to growth and repaired its brand image — and in fiscal 2024, delivered its highest gross margin in more than 20 years at 41.3%. 
The former Mattel executive, credited with reviving the Barbie empire, has brought that same prowess to revitalizing Gap’s brands. After a fourth straight quarter of strong results, it appears the strategy has staying power. 
Apparel from Zac Posen, Gap’s creative designer, has been worn recently by celebrities like Timothee Chalamet, and even the company’s underperforming Banana Republic brand has returned to growth. Its athleisure brand Athleta is still strugging, but the company has stabilized the bleed and it’s no longer shrinking. 
Here’s a closer look at how each brand performed during the quarter. 

Old Navy

Gap’s largest brand by revenue saw sales of $2.2 billion, with comparable sales up 3%, topping of expectations of up 0.7%, according to StreetAccount. The brand saw strength in denim and activewear. 

Gap

The namesake banner’s comparable sales grew 7%, well ahead of estimates of up 0.8%, according to StreetAccount.
“Gap is back in the cultural conversation,” said Dickson on the call. “This brand was built on strong product narratives with brilliant marketing expressed through big ideas, and over the past year, each of these were reignited.”
The brand’s longtime chief product officer Chris Goble left Gap in October for Dickie’s, but the company filled the position internally after he left. Dickson told CNBC in an interview that the brand has “great leadership” and is “staffed with extraordinary talent.” 

Banana Republic

The safari chic, officewear brand saw comparable sales grow 4%, when analysts expected them to shrink by 1.5%, according to StreetAccount. It continued to build strength in men’s apparel but is still without a CEO. Dickson expects the company to have an update on the role “shortly.” 
In the year ahead, Gap will close 35 stores on a net basis, the majority of which will be Banana stores, the company said.

Athleta

The athleisure brand’s comparable sales fell 2% during the quarter after it failed to offer the right types of products necessary for its core consumer, explained Dickson. Analysts didn’t have expectations for Athleta’s comparable sales.  
“We certainly have entered the cultural conversation again, and it reinforces that we do believe in this brand. We have long-term opportunities, but we do have work to do to reset the brand,” said Dickson. “In the fourth quarter, very specifically, you know, we needed to do more to excite our core consumer during the holiday period, we did a good job attracting new consumers. We did a great job reactivating customers, but we lacked the depth of product interest for our core customer at that holiday time.”
Dickson cautioned that the brand’s performance is likely to remain “choppy” in the quarters ahead as it continues its reset. More

The Women’s Tennis Association and Saudi Arabian Public Investment Fund announced Thursday that WTA players will receive one year of paid benefits during maternity leave.
More than 300 players will be eligible for the benefit.
Players have been calling on the WTA to make changes to the policy for years.

Victoria Azarenka plays a backhand against Iga Swiatek of Poland in their second round match during day three of the Dubai Duty Free Tennis Championships, part of the Hologic WTA Tour at Dubai Duty Free Tennis Stadium in Dubai, United Arab Emirates, on Feb. 18, 2025.
Christopher Pike | Getty Images

Big changes are coming to professional women’s tennis.
The Women’s Tennis Association and Saudi Arabian Public Investment Fund have launched a new program to provide players with maternity and child family planning benefits, the organizations said Thursday. Women’s tennis is one of the last professional sports to provide these benefits, and players have been asking.

As part of the program, eligible players will receive up to 12 months of paid maternity leave. Players will also have access to grants to cover fertility conception and egg freezing treatments. The WTA said the new policy will benefit 320 eligible players.
“This initiative will provide the current and next generation of players the support and flexibility to explore family life, in whatever form they choose,” Portia Archer, WTA CEO, said in a statement.
The PIF WTA maternity fund program is the first and only maternity program in women’s sports to be fully funded and supported by an external partner, the WTA said. PIF declined to comment on how much it is contributing to this program, but the organizations said players will be compensated equally.
In May, the Saudi public investment fund and the WTA agreed to a multiyear partnership as Saudi Arabia looks to further its investment into sports. PIF also funds the LIV Golf league.
The partnership has drawn criticism from some current and former players due to Saudi Arabia’s history of human rights abuses. The new policy could be an attempt by the PIF to show U.S. tennis fans that the Kingdom is changing.

“PIF partnerships are designed to elevate every level of sport and leave a legacy of transformative impact on a global scale,” said Alanoud Althonayan, head of events and sponsorships at PIF, in a statement.
While the changes signal a positive step for women’s tennis, the sport is following in the footsteps of other professional women’s sports as maternity benefits have emerged as a key issue for players in recent years.
“Thinking back about my experience in 2008 when I had my daughter, there was no support,” said Kim Clijsters, former WTA No. 1 player and a PIF Ambassador, in a statement. “I think this is going to be a career-changing opportunity for a lot of players.”
The Women’s National Basketball Association’s latest collective bargaining agreement with players guarantees women full pay during maternity leave. FIFA and the National Women’s Soccer League also recently expanded their maternity benefits.
Thursday’s announcement has been a long time coming for former top-ranked star Victoria Azarenka. She has been advocating for maternity pay in tennis since giving birth to her son in 2016. Azarenka sits on the players’ council advocating for increased benefits.
“This marks the beginning of a meaningful shift in how we support women in tennis, making it easier for athletes to pursue both their careers and their aspirations of starting a family,” Azarenka said in a statement. “Ensuring that programs like this exist has been a personal mission of mine, and I’m excited to see the lasting impact it will have for generations to come.”

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Dine Brands is trying to boost sales in 2025 after reporting its fourth straight quarter of domestic same-store sales declines for Applebee’s and IHOP.
Applebee’s promotions failed to cut through the noise as the restaurant industry at large advertised value meals to attract low-income consumers, and sales spiked at rival Chili’s.
The restaurant company plans to widen its array of value offerings and improve its messaging, particularly with younger consumers.

Michael Siluk | UCG | Universal Images Group | Getty Images

Dine Brands hopes to boost sales this year with a wider swath of value meals and buzzier advertising after a rough 2024 for Applebee’s and IHOP.
“We had a soft year in 2024, which disappoints us, but we’re focused on improving that in 2025,” Dine Brands CEO John Peyton told CNBC. “We’ve got to have compelling messages and compelling promotions and compelling reasons to drive traffic into the restaurants.”

Dine on Wednesday reported fourth-quarter U.S. same-store sales dropped 4.7% at Applebee’s and 2.8% at IHOP, ending the year with four straight quarters of domestic same-store sales declines for its two flagship brands. Shares of Dine have fallen 50% over the last 12 months, dragging its market cap down to $386 million.
The company’s down year followed three years of strong growth for the company, driven by pent-up demand as diners returned to IHOP and Applebee’s after the pandemic. But like many restaurant companies, Dine saw a pullback last year from customers who make less than $75,000. After several years paying higher prices for groceries, rent, gas and other necessities, consumers opted to stay home to cook their meals or visit other chains that offered better deals or flashy promotions.
The slowdown in restaurant spending led a slew of casual-dining restaurant chains to file for bankruptcy over the last 12 months. Familiar names like Red Lobster and TGI Friday’s sought bankruptcy protection to reorganize their struggling businesses and offload their worst-performing restaurants. Most recently, On the Border filed for Chapter 11 bankruptcy on Tuesday.
Applebee’s promotions have failed to cut through much of the noise from the so-called value wars that have ignited across the restaurant industry, at chains from McDonald’s to Bloomin’ Brands’ Outback Steakhouse. Even a triad of recent pop-culture moments last year couldn’t boost its profile: a pivotal cameo in the tennis drama film “Challengers,” an Applebee’s-motivated meltdown on “Survivor” and a shoutout from football legend Peyton Manning during Netflix’s roast of his former rival Tom Brady.
“You’ve got most of the restaurant companies are advertising value, and they’re advertising full meal deals, and so it’s harder to break through with a message when there are so many similar messages out there,” Dine’s Peyton said.

But it’s not impossible to break out from the pack. Chili’s, which is owned by Brinker International, won over diners with its viral Triple Dipper and $10.99 burger combo after spending months turning around its business.
In its most recent quarter, Brinker reported same-store sales growth of 27.4%. Thanks to its dramatic comeback, the company has become the rare casual-dining darling of investors. Brinker’s stock has soared over the last year, nearly tripling its value in the same period and raising its market cap to $6.29 billion.
For now, the star of Applebee’s value promotions, the two for $25 deal, routinely accounts for roughly a fifth of the chain’s tickets, according to Peyton. But Applebee’s is looking to add to its value offerings later this spring or in the early summer with options that appeal to larger groups or to customers who don’t want to order with their dining partner.
Dine is also trying to improve its social media presence.
“At both IHOP and Applebee’s, we know we need to do better there. We know we need to be more relevant. We know that we have to be part of the conversation and the culture,” Peyton said.
A new president for Applebee’s could help with that goal.
Peyton is currently pulling double duty serving as interim president for the chain after Tony Moralejo stepped down effective Tuesday. Peyton said the company is looking for a replacement “with a great marketing background” who understands how to connect with younger customers, on top of being a great leader with an understanding of franchising and some restaurant experience. (Yum Brands’ Lawrence Kim joined Dine as IHOP’s president in early January, succeeding Jay Johns.)
Looking to 2025, Dine is trying to communicate better with its customers and use its menu innovation to attract younger diners, according to Peyton.
But Dine’s confidence in its ability to attract customers seems shaky. For 2025, the company is projecting Applebee’s same-store sales to range between a 2% decline and a 1% increase and IHOP’s same-store sales to range between a 1% decrease and a 2% gain. More

Sotheby’s is auctioning off Michael Jordan and Kobe Bryant rookie jerseys.
The two items are expected to fetch a combined $20 million.
The sale comes as rookie memorabilia sees a surge in popularity and pricing.

Michael Jordan of the Chicago Bulls (L) eyes the basket as he is guarded by Kobe Bryant of the Los Angeles Lakers.
Vince Bucci | AFP | Getty Images

Rare pieces of memorabilia from two of the National Basketball Association’s biggest icons are hitting the auction block and are expected to sell for a combined $20 million.
Sotheby’s announced on Thursday that it is putting up for auction Michael Jordan and Kobe Bryant rookie jerseys that were worn during each of their first NBA games. The auction comes as rookie memorabilia has seen a recent surge in popularity and pricing.

“The historical weight of these two jerseys is difficult to overstate. They are as rare as they come,” said Brahm Wachter, Sotheby’s head of modern collectables, in a statement.
The jerseys will be available in separate lots beginning March 21.

Sotheby’s is auctioning off rare jerseys from Michael Jordan’s and Kobe Bryant’s rookie season.

The Jordan jersey was first worn Oct. 5, 1984, in Peoria, Illinois, where he played his first game for the Chicago Bulls in front of a crowd of just 2,000 people.
Sotheby’s said jerseys from Jordan’s rookie season are “unicorns” and rarely seen on the market.
Jordan ended up averaging 28.2 points per game that rookie season, earning him Rookie of the Year honors. He went on to win six NBA championships and has cemented his name as one of the greatest basketball players of all time.

Sotheby’s expects the iconic jersey to fetch about $10 million.
A second lot is offering Bryant’s first jersey from his 1996-97 rookie reason with the Los Angeles Lakers. Sotheby’s said the rare jersey was worn during Bryant’s first preseason and regular season games.
Bryant entered the NBA at just 18 years old and went on to win five NBA championships and two Finals MVP awards. He died in a tragic helicopter crash in 2020.
Bryant’s jersey is also expected to sell in the $10 million range.
Sotheby’s says rookie memorabilia has seen a recent uptick in demand among its customers. In October 2023, Victor Wembanyama’s game-worn San Antonio Spurs jersey sold for $762,000, and in August 2022, a 1952 Topps Mickey Mantle rookie card sold for $12.6 million.
“Early rookie jerseys represent the genesis of an athlete’s career. For collectors in search of true one-of-one treasures, this is a once-in-a-lifetime opportunity to own iconic pieces of basketball history,” said Wachter. More

Macy’s beat Wall Street’s earnings expectations but fell short on revenue as CEO Tony Spring works through his plan to revitalize the business.
The company’s so-called First 50 locations – the stores that Macy’s is devoting more resources to as part of its turnaround plan – outperformed the overall company.
In December, activist investor Barington Capital revealed it’s taken a stake in Macy’s and wants the department store to cut costs and consider monetizing its real estate portfolio.

Macy’s flagship store in Herald Square in New York, Dec. 23, 2021.
Scott Mlyn | CNBC

Macy’s delivered another quarter of mixed results on Thursday as investors wait and see how quickly CEO Tony Spring can pull off a turnaround of the business with yet another activist investor looking to take the chain private.
Across the business, which includes the Macy’s banner, Bloomingdale’s and Blue Mercury, comparable sales during the all-important holiday quarter were down 1.1%. But comparable sales across its owned and licensed businesses, plus its online marketplace, were up 0.2%, which is the highest the metric has been since the first quarter of 2022. 

Plus, the so-called First 50 locations – the stores that Macy’s is devoting more resources to as part of its turnaround plan – saw comparable sales up 0.8%, marking the fourth quarter in a row the metric has been positive. 
The two bright spots in an otherwise worse-than-expected set of results suggest Macy’s turnaround is showing some signs of life – it just might take a bit longer than expected. 
For fiscal 2025, Macy’s is expecting adjusted earnings per share of $2.05 to $2.25 and sales of between $21 billion and $21.4 billion, lower than Wall Street expectations of $2.31 per share and $21.8 billion, according to LSEG.
Macy’s shares were down more than 4% in premarket trading.
Here’s how the department store performed during its fiscal fourth quarter, compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: $1.80 adjusted vs. $1.53 expected
Revenue: $7.77 billion vs. $7.87 billion expected

The company’s reported net income for the three-month period that ended Feb. 1 was $342 million, or $1.21 per share, compared with a loss of $128 million, or a loss of 47 cents per share, a year earlier. Excluding one-time items including impairments and settlement and restructuring charges, Macy’s reported earnings of $507 million, or $1.80 per share. 
Sales dropped to $7.77 billion, down about 4% from $8.12 billion a year earlier. Like other retailers, Macy’s benefited from an extra selling week in the year-ago period, which has skewed comparisons. 
Macy’s mixed results come just over a year into CEO Spring’s tenure as the legacy department store’s chief executive. While Bloomingdale’s and Blue Mercury saw another quarter of positive comparable sales, growing 4.8% and 6.2%, respectively, Macy’s namesake banner continues to be the company’s laggard with comps down 1.9%. 
To address long-standing issues at the legacy banner, Spring has implemented an aggressive store closure plan that includes shuttering 150 stores and a strategy to fix its better-performing locations. As Macy’s and other department stores have shrunk over the years, it’s faced criticism for neglecting its stores, not having enough staff and falling behind on the retail essentials that are necessary to win in any environment. 
Spring has started to address those issues by investing in 50 locations and providing better staffing, merchandising and visual presentation of the company’s varied assortment. So far, the plan appears to be working. Those locations have performed better than the bulk of the chain and the company plans to expand the strategy beyond those 50 stores.
Still, Macy’s will have about 350 namesake locations left over after it finishes closing stores, and it will take time – and capital – to extend its strategy to the bulk of the chain. Whether or not investors have the patience to see Macy’s strategy play out remains to be seen. 
In December, activist investor Barington Capital revealed it has a position in Macy’s and wants the company to cut spending, explore selling its luxury brands and take a hard look at its real estate portfolio. It’s the fourth activist push at the department store in the last decade.
Like the activists that had come right before it, Arkhouse and Brigade, many suspect that Barington is mainly after Macy’s lucrative real estate portfolio and is more interested in juicing it for profit than doing the work necessary to revitalize the chain. Still, Macy’s must act in the interest of shareholders and if it’s not doing enough to return value quickly, an activist could eventually win out.
Macy’s on Thursday announced its intent to resume share buybacks under its remaining $1.4 billion share repurchase authorization, “market conditions pending.” 
“Building on our momentum, we continue to elevate the customer experience, deliver operational excellence and make prudent capital investments,” Adrian Mitchell, Macy’s chief operating officer and chief financial officer, said in a statement. “We remain committed to generating healthy free cash flow and returning capital to shareholders through share buybacks and predictable quarterly dividends.” 

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