(Bloomberg) -- Gap Inc. reported better-than-expected results and raised its outlook for the full year, showing the apparel retailer’s bid to rebuild the business is moving forward. 

The San Francisco-based company posted revenue of $3.4 billion in the fiscal quarter ended May 4, 2024, beating the average estimate from analysts. All of Gap’s brands posted comparable sales gains and outperformed expectations; analysts had predicted declines for Banana Republic and Athleta, Gap’s athletic apparel chain.

Gap shares jumped 20% at 5:36 p.m. in extended trading in New York. The stock has gained 7.7% so far this year through Thursday’s close, slightly less than the advance of the Russell 1000 Index. 

Gap Chief Executive Officer Richard Dickson, who took over in August of 2023, said the first-quarter results “are giving us confidence to raise both sales and operating income guidance for the full year.” The company now sees net sales “up slightly” this year, compared with an earlier, “roughly flat” projection, according to a statement released Thursday. The outlook “takes into consideration the continued uncertain consumer and macro environment.”

Gap ended the quarter with a leaner inventory, down 15% compared with last year, and said new products and advertising efforts are paying off. Linen clothing for women did particularly well at the company’s namesake brand, executives said during a call with analysts. 

“Continued focus on operational rigor is beginning to build improved consistency in performance at Old Navy,” the company said. The brand contributes the biggest portion to revenue to the parent company, followed by the Gap brand.

The retailer, which has overhauled many leadership roles and added designer Zac Posen as its creative director in February, has turned to celebrities to boost its visibility, with Anne Hathaway and Da’Vine Joy Randolph sporting Gap dresses at recent fashion events. 

Neil Saunders, managing director at GlobalData, said that Gap’s recovery remains “in its early stages,” but “management deserve credit for the effort they’ve put into stabilizing the business.” 

At Old Navy, “marketing efforts have been much improved, which is helping to put the brand back on the radar of shoppers,” he wrote in an email. Better product decisions and “storytelling efforts” have helped sales, Saunders wrote, while the brand’s low-cost model has allowed it to regain some lost ground from rival discount apparel players. 

(Updates share trading and adds analyst comment)

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