Gap Inc. Reports First Quarter Fiscal 2025 Results

Gap Inc., the largest specialty apparel company in the U.S. with a portfolio of brands including Old Navy, Gap, Banana Republic, and Athleta, has released its financial results for the first quarter of fiscal 2025, ending May 3, 2025. The company reported a solid performance, with key financial metrics indicating growth and operational improvements.

Financial Highlights

For the first quarter of fiscal 2025, Gap Inc. reported net sales of $3.5 billion, marking a 2% increase compared to the same period last year. Comparable sales also rose by 2% year-over-year. The company's gross margin improved by 60 basis points to 41.8%, while the operating margin increased by 140 basis points to 7.5%. Net income for the quarter was $193 million, translating to diluted earnings per share (EPS) of $0.51.

Business and Operational Highlights

Gap Inc. saw a mixed performance across its brands. Old Navy and Gap reported net sales increases of 3% and 5%, respectively, with both brands achieving positive comparable sales. However, Banana Republic and Athleta experienced declines in net sales, with Banana Republic down 3% and Athleta down 6%. Online sales for the company increased by 6% and represented 39% of total net sales.

Strategic Initiatives and Corporate Developments

During the first quarter, Gap Inc. distributed $131 million to shareholders through dividends and share repurchases. The company repurchased 4 million shares for $70 million and declared a second-quarter dividend of $0.165 per share. Additionally, Gap Inc. ended the quarter with $2.2 billion in cash, cash equivalents, and short-term investments, a 28% increase from the previous year.

Management's Perspective

Richard Dickson, President and CEO of Gap Inc., expressed optimism about the company's performance, highlighting the positive comparable sales and market share gains. He emphasized the effectiveness of the brand reinvigoration playbook and the company's focus on controlling controllables to drive long-term growth.

Future Outlook

Gap Inc. provided guidance for fiscal 2025, projecting net sales growth of 1% to 2% and operating income growth of 8% to 10%. The company also outlined potential impacts from tariffs, estimating a net impact of $100 million to $150 million on operating income if current tariff rates persist. For the second quarter of fiscal 2025, Gap Inc. expects net sales to be approximately flat year-over-year and gross margin to be similar to the first quarter.

SEC Filing: GAP INC [ GAP ] - 8-K - May. 29, 2025