Gap sure sounds ready to declare victory in the denim ad wars.
Richard Dickson, CEO of Gap Inc., touted the success of Gap’s latest ad campaign, “Better in Denim,” on the company’s second-quarter earnings call Thursday. The company, which includes its namesake title as well as brands like Old Navy and Banana Republic, reported sales that missed Wall Street estimates, and its shares were trading down slightly after-hours.
Despite the earnings miss and discussion of tariff-related headwinds, the earnings call felt like a denim celebration right off the bat.
Before it began, the broadcast aired its viral Gap ad, which was released last week. The ad features the girl group Katseye dancing to Kelis’s “Milkshake.” The ad was a smash hit and quickly went viral.
“Twenty million views in the first three days, 400 million total views, and 8 billion total impressions. ‘Better in Denim’ is the No. 1 search on TikTok,” Dickson said on the call. “These aren’t small facts or small stats. This is proving that Gap is a powerful pop culture brand.”
Dickson said the ad got more views in its first three days than the full length of their last four releases combined, adding it was “reinforcing the cultural relevance of the brand.”
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The ad came at a time when other denim ads have made headlines recently. American Eagle’s denim campaign featuring Sydney Sweeney sparked some controversy in July, garnering both critics and defenders. In contrast, denim ads released last week by Gap and Lucky Brand, the latter of which featured TikToker and singer Addison Rae, achieved virality without the controversy.
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Dickson, who became Gap’s CEO in 2023, has led a comeback strategy at the company that seems to be working for the Gap brand, which he said had seen comparable sales growth for seven straight quarters. The brand’s comparable sales for quarter two were up 4% compared to a year prior.
“Gap has been riding a wave of momentum from the flagship brand’s renewed cultural relevance, supported by a consistent showing by Old Navy and significant improvement in Banana Republic’s comp sales,” Emarketer principal analyst Sky Canaves said in a statement to Business Insider. “But tariff impacts and rising inventories will add to margin pressures and cloud the outlook for the remainder of the year.”
Dickson said Gap’s latest denim campaign had driven a “record-breaking response” for the brand and that the success of it demonstrated that the company’s reinvigoration efforts, including storytelling through marketing, were working.
“This is striking range of probably being one of the most iconic brand campaigns, certainly that we’ve done, but that is out there,” Dickson said. “People aren’t just watching, but they’re actively joining and suggesting that this is actually a cultural takeover.”
Beyond the denim success, rough patches related to Athleta, which is hoping for a comeback amid struggling sales, and tariffs, featured heavily on the call. The company revised tariff costs, saying that they could be between $150 million and $175 million, which is revised up from estimates earlier this year.