Gap Inc. shares surged 18.07% in Thursday's after-hours trading session following the company's impressive fourth-quarter earnings results and upbeat outlook for fiscal 2025.

The apparel retailer reported adjusted earnings per share of $0.54 for Q4, comfortably beating analysts' consensus estimate of $0.38. Quarterly net sales came in at $4.15 billion, down 3.5% year-over-year but exceeding Wall Street's expectations of $4.07 billion.

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

Looking ahead, Gap projected net sales growth of 1% to 2% for fiscal 2025, with operating income expected to increase by 8% to 10%. These projections were largely in line with analysts' estimates, reflecting the company's confidence in its turnaround efforts and ability to navigate the challenging macroeconomic environment.