The Gap logo is on display at a Gap store in Los Angeles, California on April 25, 2023. Gap reported another quarter of net losses and declining sales across its four brands, but the retailer insisted it was making progress and was able to increase its margins significantly, resulting in shares rising in long-term trading. Here's how the clothing retailer performed in the fiscal first quarter, compared to what Wall Street had predicted, according to a survey of analysts by Refinitiv Earnings per share 1 cent, adjusted etc. 16 cents lost, expected 1 cent, adjusted, expected revenue instead of 16 cents loss Revenue $3.28 billion - $3.29 billion expected The company's net loss for the quarter ended April 29 decreased to $18 million, or 5 cents per share, from $162 million, or 44 cents per share, in the prior year. On an adjusted basis, the company reported earnings of $3 million, or 1 cent per share. Sales fell 6% to $3.28 billion from $3.48 billion a year earlier. Stocks rose more than 15% in after-hours trading amid improvement in gross margins. Gap, which includes its own brands Old Navy, Banana Republic and Athleta, has been without a CEO for nearly a year as it works to restructure the business, better understand its customers and return to profitability. The retailer said work was going well and acknowledged that it had been needed for a long time. "Consistent with what you've heard from us over the past few quarters, we continue to take steps at Gap Inc. to drive critical change, further improve the course of our business and put us on the path to success again. Consistent results," interim CEO Bobby Martin told investors in an earnings call. . "I understand that we've brought up these issues before and I can say that this business has been derailed for a very long time and it is imperative that we pursue it seriously." Last month, Gap told investors it would cut nearly 1,800 employees, more than triple the 500 layoffs it announced in September, as part of a broader effort to cut costs and streamline operations. Between this year and last year, the company has reduced 25% of its headquarters roles, increasing the number of direct reports each manager has from two to four and reducing its management tiers from 12 to eight. The company said the cuts would remove layers of bureaucracy and red tape, allowing Gap to be more agile in decision-making and focus its creative efforts. In March, he also announced a major leadership change. Athleta CEO Mary Beth Laughton left the company and her role as chief growth officer was removed. Gap has announced that its chief human officer, Sheila Peters, will also leave, albeit at the end of the year. During an earnings call with investors, Martin said that the search for a new CEO is ongoing, but did not share a timeline for when the position will be filled. "When I assumed the role of interim CEO in July, I still didn't expect to speak with you on our first quarter earnings call," Martin said. “But it just underlines the board's determination to appoint the right person as our next CEO, with the passion, strong vision, and customer obsession to drive this company forward.” Martin has previously said that the next CEO will be an outside candidate. In its most recent quarter, comparable sales fell 3% year-on-year and in-store sales 4%. Online sales, which represent 37% of total net sales, also fell 9% year-over-year, but the company said this is because sales trends are more aligned with pre-pandemic metrics. However, the company added that digital sales increased 39% compared to the first quarter of fiscal 2019. Earlier in the year, many retailers were still struggling with supply chain issues related to the pandemic, bringing an abundance of inventory to Gap that had trouble selling because it was out of season or outdated. Gap, like other retailers, especially at Old Navy, relied on promotions to clear inventory, but managed to hold the discount line in its last quarter and took advantage of reduced air freight expenses that led to better margins. retailers across the industry. Gross margins increased 5.6pp year-over-year to 37.1%, improving also in the previous quarter where margins were 33.6%. The company attributed the increase in margins to a decline in air freight expenses and a slowdown in discounting, partially offset by continued inflationary costs.