Gap (GAP) Q4 2025 Earnings
How Did GAP Stock React to Q4 2025 Earnings?
S&P 500 over the same 30 days: +0.54%.
Did GAP Beat Earnings? Q4 2025 Results
No. Gap reported Q4 2025 earnings of $0.45 a share on Mar 5, 2026, missing the $0.45 consensus estimate by 0.7%. Revenue was $4.2B against a $4.2B estimate.
Gap Inc. closed fiscal 2025 with a fourth quarter that told two stories at once: steady top-line momentum undercut by a tariff-driven margin squeeze. Q4 net sales rose 2.1% year-over-year to $4.24 billion, fractionally below the $4.24 billion consensus, while GAAP diluted EPS of $0.45 missed the $0.45 estimate by 0.73%, falling sharply from $0.54 in the year-ago period. The culprit was clear: tariffs carved an estimated 200 basis points from merchandise margin, compressing gross margin 80 basis points to 38.1% and pulling operating income down to $229 million from $259 million a year ago. The headline masked genuine brand strength, with the Gap brand posting 7% comparable sales growth and Old Navy delivering a solid 3% comp, extending the company's streak to eight consecutive quarters of positive comparable sales. Athleta remained a drag, with comps falling 10%. Looking ahead, management guided fiscal 2026 net sales growth of 2% to 3% and adjusted diluted EPS of $2.20 to $2.35, though Goldman Sachs and Bank of America both maintained constructive ratings, citing core brand momentum and Athleta's longer-term recovery potential.
- Eighth consecutive quarter of positive comparable sales, up 3%
- Online sales grew 5% in Q4, representing 42% of total net sales
- Gap brand comp sales up 7% in Q4 with expanding customer base across generations
- Old Navy's price value equation resonating with consumers across wide range of income levels
- Average unit retail grew as a result of lower discounting
- ROD as a percent of sales leveraged 10 basis points in Q4
“I am pleased to report that Gap Inc. delivered a successful fourth quarter, marking another year of meaningful progress. The execution of our playbook is driving consistent results, as we achieved our second consecutive year of topline growth and eighth consecutive quarter of positive comparable sales. Financial and operational rigor combined with the strength of our platform drove one of our highest gross margins in the last 25 years and further strengthened our balance sheet.”
Gap CEO, on the earnings call
What Was Gap's Outlook in Q4 2025?
For fiscal 2026 (based on tariff rates in effect prior to February 20, 2026): Net sales expected to grow 2% to 3% year-over-year. Gross margin expected to be flat to up slightly. Adjusted operating expense as % of net sales about flat. Adjusted operating margin of approximately 7.3% to 7.5%. Adjusted diluted EPS of approximately $2.20 to $2.35. Capital expenditures of approximately $650 million. Net store closures about flat. Effective tax rate approximately 27%. Net interest income of approximately $10-$15 million. Reported diluted EPS including a $313 million legal settlement gain and $50 million charitable donation expected at approximately $2.71 to $2.86. For Q1 fiscal 2026: Net sales up 1% to 2% YoY, gross margin down approximately 150-200 bps including an estimated 200 bps of net tariff impact, adjusted operating expense as % of net sales about 35%.
GAP YoY Financials
| Metric | Q4 2025 | Q4 2024 | Year over year |
|---|---|---|---|
| Revenue | $4.2B | $4.1B | +2.1% |
| Gross Profit | $1.6B | $1.6B | +0.1% |
| Operating Income | $229.0M | $259.0M | −11.6% |
| Net Income | $171.0M | $206.0M | −17.0% |
GAP Revenue by Segment
GAP Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.