Overview
- Gap reported Q2 net sales roughly flat at $3.7 billion, comparable sales up 1%, and net income of $216 million.
- The company raised its expected fiscal 2025 tariff impact to $150 million to $175 million and guided operating margin to about 6.7% to 7%.
- Athleta was a notable drag with sales down 11% and comps down 9%, while Old Navy, Gap and Banana Republic posted positive comparable sales.
- Inventory increased about 9% as the company pre-shipped merchandise ahead of higher duties.
- Shares fell after hours as executives detailed mitigation steps and said they do not expect tariff annualization to further reduce operating income in 2026.