Gap gains (deviation) Q1 2025

New prices may have an impact GapThe activities of $ 100 million to $ 150 million, if they remain in force, the company announced Thursday when the tax profits of the first quarter was announced on Thursday.

The shares have dropped by more than 15% of the exchanges after the opening hours.

In a press release, GAP said that new rights of 30% on imports from China and a 10% levy on imports from most other countries will cost the company between $ 250 and $ 300 million with no attenuation efforts. For the moment, he leaves this impact on his advice.

Gap said it was already attenuated about half of these costs and without other action, the cost should be between $ 100 and $ 150 million, which will likely appear on the back of the year. The company said that it was going to rely on its attenuation efforts by continuing to diversify its supply chain and reduce its exposure to China.

CEO Richard Dickson said at a conference call with investors on Thursday that the company planned to buy more cotton in the United States to help mitigate the pricing impact.

“Depending on what we know today, we are not expecting that there are significant price increases or impact on our consumer,” Dickson told CNBC in an interview. “I have often talked about it: we really believe that strong brands can win on any market. It is a large industry. It is a big market. Obviously, we are a big player with a market share, but looking towards the future, we see the potential to market our brands more and gain shares.”

Beyond the prices, Gap published tax results in the first quarter which beat expectations at the top and bottom.

Here is how the clothing company has worked in relation to what Wall Street provided, on the basis of a survey of LSEG analysts:

• Profit by action: 51 cents against 45 cents expected
• Income: $ 3.46 billion against $ 3.42 billion expected

The declared net profit of the company for the period of three months which ended on May 3 was $ 193 million, or 51 cents per share, against $ 158 million, or 41 cents per share, a year earlier.

Sales reached $ 3.46 billion, up approximately 2%, compared to $ 3.39 billion a year earlier.

Gap guidelines were largely in line with consensus, but its gross margin forecasts are lower than expected. It expects annual sales to increase between 1%and 2%, in accordance with LSEG expectations of growth of 1.3%.

For the current quarter, he said that he expects sales to be stable, compared to LSEG expectations of 0.2%growth. It expects its gross margin to be 41.8%, lower than the 42.5% that Streetaccount was waiting for. This expected impact on the gross margin is not linked to the pricing effects, but rather the company which hooks certain advantages which it saw during the period of the previous year linked to its credit card program.

In March, before President Donald Trump published new prices on imports from most regions of the world, the company expected a minimum impact of functions. But three months later, it was in a different position.

In March, Gap said that he gets less than 10% of his products from China, but he now expects the country to represent less than 3% of its supply by the end of the year. The Trump administration has imposed a new price of 30% on imports from China.

According to its latest annual annual annual deposit, its two largest trade partners are Vietnam and Indonesia, where Gap manufactured 27% and 19% of its products during the year 2024. Vietnam faces a 46% potential reciprocal rate and, if this obligation remains in force, it could have a significant impact on GAC income.

Trump's trade war and the tasks that are currently in force are launching a key in Dickson's plans to hand over the inherited retailer – efforts that are in progress and continue to bear fruit.

During the quarter, comparable sales increased by 2%, said the company, mainly in accordance with the Streetaccount expectations by 1.8%. The gross margin and the operating margin are also higher than expected.

Here is a more in -depth examination of the performance of each brand.

• Old Navy: GAP's largest and most important brand has marked sales of $ 2 billion, up 3% compared to last year, the company said. Comparable sales increased by 3%, she said, before the Streetaccount expectations of 2.1%. Denim and Active led the growth of the brand, which was supported by marketing designed to recover all GAP brands at the center of culture. The new Old Navy campaign “Old Navy. New Moves” presents celebrities, including Lindsay Lohan and Dylan Efron.

• Gap: The homonymous banner of the company experienced sales of $ 724 million, up 5% compared to last year. Comparable sales increased by 5%, before expectations by 3.4%. Dickson has concentrated a large part of his recovery efforts on the Gap brand, and he is an out -of -competition artist in the last two quarters. Gap Brand's growth has been fueled by “style, novelty of products, innovation and convincing marketing,” said Dickson. “Gap talks about himself, and people talk about gap.”

• Republic of banana: The Safari Chic brand is still experiencing problems, with sales down 3% to $ 428 million and comparable sales, compared to the expectations of 1.5% growth. The company said that it was focused on improving the brand. Dickson said he was “encouraged” by Le Progrès that Banana made – as his collaboration splashing with the HBO success program “The White Lotus” – but there is even more work to do to reconquer the customer's confidence.

• Athlete: The Athleisure brand has also been dragged on the overall performance of GAP, with sales of 6% to 308 million dollars and comparable sales down 8%. The figures were not comparable to consensual estimates. The company has warned improvements to athletics “will take time”. Dickson said the brand had made progress in improving profitability, but that it must repair products and marketing to bring athletics back to growth. The company previously said that she was still working thanks to stocks that were addressed more to fashionable customers and did not shine as well with the base of athlete. “Although we have managed to bring new customers to the brand, we still did not have enough convincing products to call on our large existing basis, and this appears in performance,” said Dickson.