Gap Inc has reported sales uplift for the first quarter driven by the strong performance at its core Gap and Old Navy brands.

The company’s net sales for the quarter ended May 3 rose 2 per cent to $3.5 billion, with comparable sales also up 2 per cent.

Operating income increased 26.8 per cent to $260 million and net income soared 22 per cent to $193 million.

GlobalData MD Neil Saunders said the sales uplift was delivered during a challenging trading period when a cold start to spring disrupted the sales of new season apparel and consumers remained cautious.

The Gap brand delivered the best performance with a 5 per cent increase in comparable sales. According to Saunders, this underscores that the mission to make Gap relevant again and to inject some excitement and interest into the range is working. 

Old Navy’s comparable sales were up 3 per cent, which the analyst said was a positive outcome given the brand’s core customer was under pressure. “Better execution on the shop floor, some very strong assortments in areas like athleisure, and good prices and promotions all helped nudge the family shopper into spending,” he added.

Banana Republic was flat, while Athleta saw an 8 per cent decline, showing that both brands need some reinvention and newness, Saunders said.

For the full year, the company expects net sales to increase 1-2 per cent amid approximately 35 net store closures. Operating income is forecast to grow 8-10 per cent.

The outlook does not reflect the potential effect of tariffs. Management wanted that profits could be damaged if the current tariff rates remain. 

“Overall, Gap is on a good trajectory. There is a lot more work to do to keep on track over the year ahead, but management has made the kind of progress that has been lacking for a long time,” Saunders concluded.