| Imagery Source: Wikipedia / Coolcaesar |
| Information Source: Gap Inc |
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Net sales up 3% versus last year, exceeded the outlook
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Comparable sales up 5%, positive for 7th consecutive quarter
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Gross margin of 42.4%, exceeded outlook
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Fiscal 2025 net sales growth outlook increases to the high end of the prior guidance range
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| Gap Inc. (NYSE: GAP), the largest speciality apparel company in the U.S. with a purpose-driven house of iconic brands including Old Navy, Gap, Banana Republic, and Athleta, today reported financial results for its third quarter ended November 1, 2025. |
| “We are proud to report that Gap Inc.’s third quarter results exceeded our net sales and margin expectations and delivered the seventh consecutive quarter of positive comparable sales,” said President and Chief Executive Officer Richard Dickson. “Our strategy is working and our brands are gaining momentum with our three largest brands - Old Navy, Gap, and Banana Republic - each posting strong comparable sales. The strength of our third quarter and quarter-to-date performance positions us well for the holiday selling season and gives us the confidence to increase our full-year net sales outlook to the high end of our prior guidance range and raise our full-year operating margin outlook. We are focused on executing with excellence and finishing the year strong.” |
| Third Quarter Fiscal 2025 – Financial Results |
- Net sales of $3.9 billion were up 3% compared to last year. Comparable sales were up 5% year-over-year.
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- Store sales increased 3% compared to last year. The company ended the quarter with nearly 3,500 store locations in about 35 countries, of which 2,497 were company-operated.
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- Online sales increased 2% compared to last year and represented 40% of total net sales.
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- Gross margin of 42.4% decreased 30 basis points versus last year.
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- Merchandise margin decreased 70 basis points versus last year, inclusive of an estimated net tariff impact of approximately 190 basis points. The underlying merchandise margin expansion was primarily due to growth in average unit retail.
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- Rent, occupancy, and depreciation (ROD) as a percentage of sales leveraged 40 basis points versus last year.
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- Operating expense was $1.3 billion.
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- Operating income was $334 million; operating margin of 8.5%.
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- The effective tax rate was 30%.
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- Net income of $236 million; diluted earnings per share of $0.62.
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| Balance Sheet and Cash Flow Highlights |
- Ended the quarter with cash, cash equivalents and short-term investments of $2.5 billion, an increase of 13% from the prior year.
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- Year-to-date net cash from operating activities was $607 million. Year-to-date free cash flow, defined as net cash from operating activities less purchases of property and equipment, was $280 million.
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- Ending inventory of $2.5 billion was up 5% compared to last year, primarily as a result of higher costs due to tariffs.
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- Year-to-date capital expenditures were $327 million.
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- Paid a third-quarter dividend of $0.165 per share, totalling $62 million. The Company’s Board of Directors approved a fourth quarter fiscal 2025 dividend of $0.165 per share.
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| Additional information regarding free cash flow, which is a non-GAAP financial measure, is provided at the end of this press release along with a reconciliation of this measure from the most directly comparable GAAP financial measure for the applicable period. |
| Third Quarter Fiscal 2025 – Global Brand Results |
| Old Navy: |
- Third quarter net sales of $2.3 billion were up 5% compared to last year. Comparable sales were up 6%. Old Navy is winning in strategic categories like denim, active, and kids and baby, while executing culturally relevant partnerships.
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| Gap: |
- Third quarter net sales of $951 million were up 6% compared to last year. Comparable sales were up 7% achieving positive comparable sales for the 8th consecutive quarter. Gap's outstanding execution and relentless repetition of the reinvigoration playbook continue to drive momentum as the brand progressively builds on its prior successes.
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| Banana Republic: |
- Third quarter net sales of $464 million were down 1% compared to last year. Comparable sales were up 4%. Banana Republic's foundational work — from elevated product to culturally relevant storytelling — is resonating with consumers and driving the second consecutive quarter of strong results.
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| Athleta: |
- Third quarter net sales of $257 million were down 11% compared to last year. Comparable sales were down 11%. Beginning with a focus on the fundamentals, the brand is applying the reinvigoration playbook with rigour to reset for the long term, which will take time.
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| For the full document, click the link below |
| Gap Inc |
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