May 29 (Reuters) - Gap kept its annual forecasts

intact after beating Wall Street expectations for first-quarter

sales on Thursday as more customers shopped for its Old Navy and

namesake brands following a style refresh over the past few

quarters.

Under CEO Richard Dickson, the company has stabilized sales

by implementing initiatives such as remodeling of Gap stores and

bringing in trendy clothing.

Gap has taken steps including partnerships with actor Parker

Posey of the White Lotus TV series and Disney collaborations.

The company also launched sports apparel line StudioSmooth under

the Old Navy brand and featured more vivid prints and silk

clothing at its Banana Republic banner.

Comparable sales at Old Navy rose 3%, while at Gap banner it

increased 5%.

The results come at a time when most retailers including

Walmart ( WMT ) and Target ( TGT ) have struck a cautious tone

due to the impact of U.S. President Donald Trump's tariffs on

global trading partners.

Most companies have either withdrawn, cut or stuck to their

annual expectations while the global economic environment

remains volatile with a U.S. trade court blocking most of

Trump's tariffs on Wednesday and an appeals court reinstating

them a day later.

Gap, which bought less than 10% of its merchandise, by

dollar value, from factories in China in fiscal 2024, said it

expects incremental costs of about $250 million to $300 million

but has strategies to mitigate more than half of that amount.

It retained its fiscal 2025 sales forecast of 1% to 2%

growth and operating income growth of 8% to 10%. Gap said the

forecast does not reflect the potential effect of tariffs.

The company's first-quarter revenue rose 2.2% to $3.46

billion, compared with analysts' average estimates of $3.42

billion, according to data compiled by LSEG.

It reported a profit of 51 cents per share. Analysts were

expecting earnings of 45 cents.