Gap (GAP) results for the 4th quarter of 2025

Historic winter storms and subsequent store closures weighed on Gap’s performance during its holiday quarter and contributed to worse-than-expected results for its portfolio of brands, the retailer announced Thursday.

Cold weather, snow and ice across much of the United States in January led to the temporary closure of about 800 stores at the height of the storms, contributing to Old Navy’s lack of comparable sales and mixed company-wide results, the retailer said.

“Old Navy and all the brands were actually trending better heading into these weather disruptions,” said CFO Katrina O’Connell. “The good news is that the trends recovered immediately after these storms passed.”

Across its businesses, which include Old Navy, Banana Republic, Athleta and Gap’s namesake banner, the retailer reported mixed results for the fiscal fourth quarter – missing bottom line expectations and meeting revenue consensus.

Here’s how the retailer performed compared to what Wall Street expected, based on a survey of analysts by LSEG:

• Earnings per share: 45 cents against 46 cents expected
• Income: $4.24 billion versus $4.24 billion expected

Gap’s stock fell as much as 9% in extended trading Thursday.

The company’s reported net income for the three months ended Jan. 31 was $171 million, or 45 cents per share, compared with $206 million, or 54 cents per share, a year earlier. During the quarter, Gap’s gross margin was weighed down by tariffs and fell to 38.1%, slightly less than analysts expected, according to StreetAccount.

Sales reached $4.24 billion, up about 2% from $4.15 billion a year earlier.

Gap’s guidance was largely in line with expectations, but fell short of consensus. For the current quarter, it expects an increase in revenue between 1% and 2%, against expectations of 2%, according to LSEG.

For the full year, the company expects sales growth of between 2 and 3 percent, in line with expectations of 2.5 percent growth, according to LSEG. Given the positive $313 million legal settlement Gap experienced in the current quarter, it issued an adjusted earnings per share outlook for the full year. The company said it expects adjusted earnings per share of between $2.20 and $2.35, compared with an expected $2.32, according to LSEG.

Gap did not factor recent pricing changes into its outlook because the company believes it is “premature to plan for a change” as the situation continues to evolve, O’Connell said. Given the impact Gap has suffered from President Donald Trump’s global tariffs, which were struck down by the U.S. Supreme Court last month, Gap may issue firmer guidance in the coming quarter as the newly enacted 15% tariffs are slightly lower than previous rates for many countries.

“If the [current] If Section 122 tariffs were to remain in effect for the year or expire in July, this should lead to a more favorable outcome compared to the outlook we provided today,” O’Connell said. “If 15% were the rate that would remain in place for the remainder of the year, this rate would be slightly lower than the current IEEPA rates that are contemplated in our plans, which could give us a modest operating profit advantage if this scenario were to play out.

Gap’s shaky results come just over two years after CEO Richard Dickson’s turnaround plan and analysts are starting to expect more from the clothing giant. Now that the company has improved profitability, returned to growth and accumulated an impressive $3 billion in cash, Dickson said he is ready to move on to the next phase of the plan, which is “building momentum.”

“Our primary focus will be on growing our core apparel business, and we will achieve this through continuous improvement,” Dickson said. “All of this has been driven by disciplined execution, which we must continue to do with better products, better marketing and better storytelling. It’s not easy, but we’re proving that this muscle is getting stronger and stronger now.”

Meanwhile, Gap is also looking to the company’s growth opportunities, including its expansion into the beauty and accessories sectors and its fashion and entertainment platform with the recent appointment of a chief entertainment officer. He said the projects would start to really gain momentum next year.

Here’s a closer look at how each brand performed:

Gap’s largest and most valuable brand saw sales rise 3% to $2.3 billion, with comparable sales also up 3%, well below analyst consensus of 4.3%, according to StreetAccount. Despite this failure, Gap said that Old Navy’s “price-value equation resonates with consumers” and that it continues to appeal to shoppers across a wide range of income levels.

The brightest spot of Gap’s quarter came from its namesake banner, which saw sales rise 8% to $1.1 billion with comparable sales up 7%, well above expectations of 4.6%, according to StreetAccount. Under Dickson, the brand has worked to regain its cultural relevance and appeal to a wide range of generations, including younger Gen Z shoppers.

Workwear brand safari-chic reported its third consecutive quarter of positive comparable sales, up 4%, beating expectations by 2.5%. Sales increased 1% to $549 million, reflecting advances in both marketing and product assortment. “Men’s wear continues to gain momentum. Key items like traveler pants, our cashmere program, some really fantastic outerwear that drove performance, particularly in the quarter,” Dickson said. “Women’s performances are becoming much more consistent. We’ve had strength in denim skirts and sweaters, and as we enter 2026, Banana is really starting to find its momentum.”

The athleisure brand experienced another quarter of declining sales, with revenue down 11% to $354 million and comparable sales down 10%. In some ways, this decline reflects an overall sluggish sportswear market, but the company also made a number of strategic missteps, including targeting the wrong customer and offering products that failed to land. Under the leadership of the brand’s new CEO, Dickson said Athleta has worked to revamp the assortment, bringing back customer favorites and ramping up innovation.