Overview
- Comparable sales rose 5% for the quarter ended Nov. 1, topping LSEG’s 3.26% estimate, and revenue reached $3.94 billion versus $3.91 billion expected.
- Brand results diverged as Old Navy gained 6%, Gap rose 7%, Banana Republic grew 4%, and Athleta fell 11% for a fourth straight quarterly decline.
- Campaigns and collaborations, including Gap’s viral Katseye “Better in Denim” push and tie-ins with Disney, Stranger Things, and Wicked, were cited as demand drivers.
- Gap reiterated a 100–110 basis-point tariff hit to the annual operating margin; gross margin slipped 30 basis points to 42.4% and net income fell 14% to $236 million.
- The company guided full-year sales to the high end of prior targets and an operating margin around 7.2%, continued shifting sourcing away from China toward a sub-3% goal by late 2025, and is preparing an affordable beauty and personal-care line to diversify revenue.