Gap Inc. shares surged Friday following strong quarterly results and an upward revision to the company’s full-year earnings forecast, signaling renewed investor confidence in the retailer’s turnaround efforts. The company reported a 10 percent increase in same-store sales at its flagship Gap brand, excluding performance from newly opened or closed locations, surpassing analyst expectations.

Gap, which was a defining force in American fashion during the 1990s and early 2000s, has been experiencing a resurgence driven in part by high-profile product collaborations with celebrities such as Victoria Beckham and Hailey Bieber. Designs by the company’s creative director, Zac Posen, have gained visibility at major events including the Met Gala and the Oscars, contributing to heightened brand momentum.

“When great product is paired with compelling storytelling and disciplined execution, it creates a powerful flywheel of customer engagement and brand momentum,” Gap Inc. CEO Richard Dickson said during a Thursday earnings call. The strong results and optimistic guidance fueled a 15 percent increase in the company’s stock price to US$23.95, marking its largest one-day gain in over a year.

In contrast, Gap Inc.’s other major brand, Old Navy, the company’s largest division by sales, reported a 4 percent decline in same-store sales for the same period. Dickson attributed the downturn to missed opportunities in key summer product categories and marketing efforts that fell short of driving sufficient customer engagement.

The divergent performance of Gap Inc.’s brands highlights ongoing challenges and opportunities as the company navigates shifting consumer preferences and competitive pressures in the retail sector. While Gap’s renewed popularity has buoyed overall results, management acknowledges the need for improvements at Old Navy to sustain broader growth.