Gap Inc. (GPS, Financials) reported fourth-quarter earnings that exceeded Wall Street expectations, driven by improved profitability and higher sales across key brands. The stock rose 17.25% to $22.84 as of 2:30 p.m. ET on Friday.

With profits per share of $0.54 on $4.1 billion in sales, the clothing store exceeded analysts' projections by $0.17 and $30 million, respectively. Rising above the 38.1% consensus projection, gross margin hit 38.9%, the highest level in two decades.

Rising 3% in the quarter, comparable sales above the 1.89% consensus projection. Strong demand for denim helped Old Navy, the company's biggest brand, score a 3% sales increase beyond the 1.74% projection. While the Gap banner saw a 7% growth, considerably over the 1.67% projection, Banana Republic claimed a 4% increase, reversing a 4% drop in the previous year. With a 2% drop relative to an expected 4.6% growth, Athleta was the only brand to fall short of expectations.

Gap projects net sales for the first quarter of fiscal 2025 to be level to somewhat higher than the $3.4 billion reported in the previous-year period. From 41.2% a year earlier, gross margin is expected to rise only modestly.

Reaching between $15.25 billion and $15.40 billion, full-year projections demand revenue growth of 1% to 2%, in line with analyst consensus of $15.38 billion. Between $1.20 billion and $1.22 billion is the estimated operating income.

Though fewer than 1% of its goods are imported from Mexico and Canada, the mentioned macroeconomic difficulties and U.S. trade policies help to shape its perspective.