Gap Inc.'s stock surged nearly 12% in the after-hours trading session on Thursday, following the company's better-than-expected fourth-quarter earnings report and positive outlook for 2025.

The apparel retailer reported adjusted earnings per share of $0.54 for the fourth quarter, beating analysts' consensus estimate of $0.37 by a significant margin. Gap also reported quarterly sales of $4.10 billion, narrowly exceeding the estimated $4.07 billion.

Gap's strong performance was driven by solid comparable sales growth across its brands, with Old Navy, Banana Republic, and Gap divisions all reporting positive comps. The company's inventory levels remained well-controlled, while its cash position surged 38% year-over-year to $2.6 billion.