On a quarterly conference call with analysts on Thursday, November 20, Gap, Inc. (GAP) President and CEO Richard Dickson said the company was pleased to see its three largest brands, Old Navy, Gap and Banana Republic, posting strong positive comps in the third quarter, and demonstrating the resilience of the overall portfolio despite a challenging quarter for Athleta.

Athleta delivered net sales of $257 million in the third quarter, an 11 percent decrease year-over-year in both net and comparable sales.

Dickson also noted that new Athleta Brand President Maggie Gauger has made an impact in her first 90 days on the job.

“She’s taking quick and thoughtful action to begin to reorient the brand. This includes reorganizing the talent structure to align with her vision,” he said. “The team is doing the right work, acting with speed and urgency to drive progress, but this reset will take time.”

Time appears to be something GAP is willing to give to the active lifestyle brand, as company expectations for a quick solution to Athleta’s woes have given way to a longer-term view.

“Our focus is on positioning Athleta for long-term success and returning it to its rightful place as a premium aspirational brand,” Dickson stated. “The brand is at the beginning of its reinvigoration journey. We aren’t chasing quick fixes. We are taking a deliberate approach to position the brand for the long term.”

Dickson said the company is confident that the “consistent application of a brand reinvigoration playbook anchored in purpose and heritage will guide Athleta forward.”

“This is about returning to what made the brand great to begin with while reestablishing our clear and distinctive position in the active market,” Dickson continued. “We’re encouraged by the steps Maggie and the team have already taken, and we look forward to the continued impact of their leadership as Athleta’s reinvigoration takes shape.”

Dickson made it clear after one analyst’s question that this is a reset year for Athleta. “We do believe Maggie and the team are taking the right steps, and we remain confident that Athleta will emerge as a brand that does matter even more to women through product, trend and storytelling. We understand there’s a lot of work to do, but we believe we’ve got the right leader in place to do it, and we look forward to continuing to update you as more news unfolds,” he responded.

Company CFO Katrina O’Connell offered her take on an analyst question about Athleta inventory, suggesting that the company did make choices to lower overall levels heading into Q4.

“We feel good about the levels and quality of inventory at Athleta, and we’ll remain pretty prudent as it relates to Athleta until we start to see the product and the marketing get back to where we would expect it to be for this brand,” she noted.

Looking ahead, O’Connell said that GAP is increasing its consolidated full-year 2025 outlook to the high end of its prior guidance range and now expects net sales growth of 1.7 percent to 2.0 percent year-over-year.

“Our outlook assumes ongoing strength at Old Navy, Gap and Banana Republic and a longer recovery at Athleta,” she concluded.”

Image courtesy Athleta