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May 03, 2025
Gap Q1 2025 Earnings Report
Gap reported increased revenue and earnings in Q1 2025 compared to the prior year.
Key Takeaways
Gap Inc. delivered stronger than expected Q1 2025 results, driven by market share gains in Old Navy and Gap, with positive comparable sales and improved operating margin.
Net sales increased 2% year-over-year to $3.5 billion.
Gap and Old Navy both saw positive comparable sales and market share growth.
Operating income grew to $260 million with a 7.5% margin.
EPS rose to $0.51, up from $0.41 in Q1 2024.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Gap expects flat sales for Q2 FY25 and anticipates tariff pressures in the latter half of the year, with full-year operating income growing 8%-10%.
Positive Outlook
- Full-year net sales expected to grow 1% to 2%.
- Full-year operating income expected to grow 8% to 10%.
- Gross margin for Q2 expected to be similar to Q1 levels.
- Operating expense to leverage slightly in Q2.
- Continued cost discipline and brand momentum at Old Navy and Gap.
Challenges Ahead
- Tariffs could result in $100M to $150M in incremental costs.
- Free cash flow remains negative due to seasonal effects.
- Continued weak performance at Athleta with -8% comp sales.
- Banana Republic net sales declined 3% YoY.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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