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Jan 31
Gap Q4 2025 Earnings Report
Gap reported modest fourth quarter fiscal 2025 growth with improved comparable sales but lower profitability year over year.
Key Takeaways
Gap Inc. delivered Q4 fiscal 2025 revenue growth of 2% with comparable sales rising 3%, marking its eighth consecutive quarter of positive comps, although operating income and net income declined year over year due to margin pressure.
Revenue increased 2% year-over-year to $4.236B.
Comparable sales grew 3%, marking the eighth consecutive quarter of positive comps.
Gross margin declined 80 basis points year-over-year to 38.1%.
Net income decreased to $171M from $206M in the prior year quarter.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Gap expects modest sales growth and stable margins in fiscal 2026 as it continues its transformation strategy and operational improvements.
Positive Outlook
- Full-year fiscal 2026 net sales expected to grow 2% to 3%.
- Gross margin expected to be flat to slightly higher year over year.
- Adjusted operating margin expected around 7.3% to 7.5%.
- Expected adjusted diluted EPS of $2.20 to $2.35.
- Strategic growth initiatives including beauty, accessories, and technology investments.
Challenges Ahead
- Tariffs expected to pressure first quarter gross margin by roughly 200 basis points.
- Q1 fiscal 2026 gross margin expected to decline 150 to 200 basis points.
- Operating expense ratio expected around 35% in Q1.
- Athleta brand continues to face sales declines and turnaround challenges.
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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