Gap Inc. (GAP) had a good day Friday, with shares surging after the apparel retailer posted solid third-quarter results and gave investors something to smile about heading into the holidays.

The Numbers: Gap reported earnings of 62 cents per share, comfortably ahead of the 59-cent consensus estimate. Revenue came in at $3.94 billion, slightly above the $3.91 billion analysts expected and up nearly 3% from the $3.83 billion the company reported a year ago.

But the real headline was the raised guidance. Gap bumped its full-year 2025 sales forecast to a range of $15.36 billion to $15.40 billion, exceeding Wall Street's $15.32 billion consensus. That's the kind of confidence investors like to see.

President and CEO Richard Dickson sounded optimistic in the company's announcement: "We are proud to report that Gap Inc.'s third-quarter results exceeded our net sales and margin expectations and delivered the seventh consecutive quarter of positive comparable sales."

Dickson continued, "The strength of our third-quarter and quarter-to-date performance positions us well for the holiday selling season and gives us the confidence to increase our full year net sales outlook to the high end of our prior guidance range and raise our full year operating margin outlook."

Analyst Response: Wall Street took notice. Morgan Stanley's Alex Straton kept his Overweight rating and raised his price target to $31 from $30. Evercore ISI's Michael Binetti maintained an Outperform rating while lifting his target to $28 from $25.

Bank of America's Lorraine Hutchinson held a Neutral rating but bumped her target to $27 from $23. Baird's Mark Altschwager also stayed Neutral, moving his target to $27 from $26. Telsey Advisory's Dana Telsey kept her Market Perform rating and nudged her target up to $26 from $24.

Price Action: Gap shares were trading up 9.58% at $25.27 Friday.