Gap (GAP) Q2 2025 Earnings
How Did GAP Stock React to Q2 2025 Earnings?
S&P 500 over the same 30 days: +3.63%.
Did GAP Beat Earnings? Q2 2025 Results
Yes. Gap reported Q2 2025 earnings of $0.57 a share on Aug 28, 2025, beating the $0.55 consensus estimate by 4.0%. Revenue was $3.7B against a $3.7B estimate.
Gap Inc. delivered a profit-ahead quarter in fiscal Q2 2025, demonstrating that cost discipline can carry the day even when top-line growth stays modest. GAAP diluted EPS of $0.57 edged past the $0.55 consensus estimate by roughly 4%, lifted primarily by a meaningful reduction in operating expenses to $1.24 billion from $1.29 billion a year earlier, while net sales of $3.73 billion came in fractionally below expectations and were essentially flat year-over-year, up just 0.1%. Comparable sales rose 1%, the sixth consecutive quarter of positive comps, with Old Navy and the Gap brand carrying much of the weight; Athleta remained a drag, posting an 11% sales decline that management acknowledged will require more time to reverse. Tariffs are emerging as the central overhang, with the company now baking an estimated 100 to 110 basis points of net tariff impact into its reaffirmed full-year operating margin outlook of 6.7% to 7.0%, and guiding for 200 basis points of tariff pressure on gross margin in Q3 alone, even as net sales growth of 1% to 2% for fiscal 2025 remains the target.
- Positive comparable sales for sixth consecutive quarter, driven by Old Navy, Gap, and Banana Republic
- Online sales increased 3% and represented 34% of total net sales
- Operating expenses decreased by $46 million year-over-year
- Gap brand achieved 7th consecutive quarter of positive comparable sales with 4% comps
- Banana Republic comparable sales turned positive at 4% as brand reset resonates with consumers
“In the second quarter, Gap Inc. overdelivered on profit expectations and achieved our topline goals. With positive comps for the sixth consecutive quarter, fueled by our three largest brands Old Navy, Gap and Banana Republic, it's clear our strategy is working.”
Gap CEO, on the earnings call
What Was Gap's Outlook in Q2 2025?
Gap Inc. reaffirmed its fiscal 2025 outlook for net sales growth of 1% to 2%. Operating margin is expected at 6.7% to 7.0%, including an estimated 100-110 basis points of net tariff impact. Full-year capital expenditures are expected at approximately $500 to $550 million, net interest income of approximately $15 million, effective tax rate of approximately 27%, and approximately 35 net store closures. For Q3 fiscal 2025, net sales are expected to grow 1.5% to 2.5%, with gross margin declining approximately 150 to 170 basis points including an estimated 200 basis points of net tariff impact, and slight operating expense deleverage due to shift in timing of investments.
GAP YoY Financials
| Metric | Q2 2025 | Q2 2024 | Year over year |
|---|---|---|---|
| Revenue | $3.7B | $3.7B | +0.1% |
| Gross Profit | $1.5B | $1.6B | −3.0% |
| Operating Income | $292.0M | $293.0M | −0.3% |
| Net Income | $216.0M | $206.0M | +4.9% |
GAP Revenue by Segment
GAP Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.