The Gap, Inc.

Gap Inc. delivered a largely steady second quarter for fiscal 2025, posting earnings per share of $0.57 that edged past the $0.55 consensus estimate by 3.98%, even as revenue of $3.73 billion came in essentially flat — up just 0.1% year-over-year and a hair below expectations. The profitability beat reflected disciplined cost management, though gross margin contracted 140 basis points to 41.2% as the company lapped a prior-year credit card revenue-sharing benefit that weighed on merchandise margin. Brand performance was uneven: Gap and Banana Republic both extended their positive comparable sales streaks, while Old Navy held steady as the portfolio's anchor at $2.15 billion in quarterly sales. Athleta remained a drag, with sales falling 11% to $300 million as the brand works through a longer-term reset — a challenge management is now pairing with an ambitious expansion into beauty and accessories. Looking ahead, Gap reaffirmed full-year net sales growth of 1% to 2% and an operating margin of 6.7% to 7.0%, though an estimated 100 to 110 basis points of net tariff impact continues to cloud the path forward.