Gap has been building momentum for years. Now, investors are starting to believe in its turnaround.

The retailer's shares soared Friday after the company said sales at its namesake Gap brand, excluding newly opened or closed stores, rose 10% in the most recent quarter. Earnings beat analyst estimates and the company raised its earnings estimates slightly for the year.

The brand that set American style for much of the '90s and early 2000s is undergoing a renaissance. Product collaborations with celebrities such as Victoria Beckham and Hailey Bieber have fueled excitement, and designs by Zac Posen, the company's creative director, have appeared at the Met Gala, the Oscars and other red-carpet events in recent years.

"When great product is paired with compelling storytelling and disciplined execution, it creates a powerful flywheel of customer engagement and brand momentum," Gap Inc.'s Chief Executive Richard Dickson told analysts on Thursday after the company reported financial results.

Gap defined the way a generation of Americans dressed and was a cultural touchstone for nearly two decades, under the direction of then-CEO Mickey Drexler. It made khakis cool with its television commercials that showed models dancing in them to swing music. Its basics became a thing of celebrity stardust when Sharon Stone wore a Gap T-shirt to the 1996 Oscars. And its ads starring Madonna, Spike Lee and other luminaries styling Gap's classic T-shirts and denim their own way resonated with shoppers: They too could make the look their own.

But sales slumped in the early 2000s and Drexler was forced out. Subsequent CEOs weren't able to reignite the magic-until now.

A turnaround took hold soon after Dickson was named CEO of the parent company in August 2023. A former Mattel executive, who helped revive Barbie, Dickson began making the brand relevant again by collaborating with celebrities and hot brands, having more on-point marketing and more trend-worthy products. Same-store sales have grown for 11 consecutive quarters.

The latest results sent shares up 15% Friday morning to $23.95. It was the biggest jump in more than a year.

The company's other brands have fared less well recently. At Old Navy, its largest division by sales, same-stores sales fell 4% in the most recent quarter. Dickson said the brand had missed the mark in key summer categories such as dresses, shorts and bathing suits and that its marketing failed to drive enough business.

"We made some assortment and pricing decisions that impacted our value equation," Dickson said. He added the team has been working to address the shortcomings and has seen improvements in August. It also shook up its management.

Haio Barbeito, Old Navy's president and CEO, will move into an advisory role as of Nov. 2. He will be replaced by Michael Francis, who joined Old Navy in 2026 as chief customer officer and head of marketing shared services.

Banana Republic same-store sales fell 2%. Athleta same-store sales dropped 12%, as it has lost ground to newer rivals. Overall sales at the parent company fell 2% to $3.65 billion, compared with $3.73 billion a year earlier.