In a Thursday interview with CNBC’s Jim Cramer, Gap CEO Richard Dickson detailed what’s contributing to the company’s successful turnaround efforts so far, including new marketing and branding.
“We’ve been really well-known for basics, really across our portfolio, and we’ve been dialing up the fashion quotient,” Dickson said. “And it’s really important to keep consumers engaged, to keep people interested you have to be interesting. And so we’ve been driving a lot of that idea through our brands, design-led innovation is a really important part of our reinvigoration strategy.”
Gap exceeded Wall Street’s earnings and revenue estimates and raised its full-year profit outlook, giving its stock a bump to close up 1.65%. Dickson took the reigns at Gap about a year ago, and sales have improved across the company’s brands — Banana Republic, Athleta, Old Navy and its namesake — since then. Before Gap, Dickson served as a top executive at Mattel and is widely credited for reviving the company’s signature Barbie brand.
Dickson said Gap is making progress with both its work-wear line, Banana Republic, and athleisure brand Athleta. The former has weighed on the company’s performance and saw flat revenue and comparable sales during the recent quarter compared to last year, while the latter saw sales slide. Gap has been making adjustments on pricing and implementing new merchandising strategies, Dickson said. He conceded that Banana Republic’s men’s business is stronger than women’s, saying the company has “work to do.” He also the company now expects Athleta to have positive comparable sales for the remainder of the year.
But Dickson highlighted the performance of Gap and Old Navy during the quarter, saying the company gained share in categories like dresses, denim and baby and kids.
“We’ve seen growth across all income cohorts, which means that we are really resonating, our brands and our proposition is resonating with consumers,” he said. “We think, again, we’re headed towards the right direction in unlocking the incredible value of this portfolio.”
