Gap Profit (GAP) for Q4 2025

The retailer said Thursday that historic winter storms and subsequent store closures impacted Gap Co.’s performance during the holiday quarter and contributed to worse-than-expected results across its portfolio of brands.

Cold weather, snow and ice across much of the U.S. in January led to about 800 temporary store closures at the height of the storms, contributing to similar sales losses to Old Navy and mixed results companywide, the retailer said.

“Old Navy and all the brands were actually leaning better into the weather disruption,” said Katrina O’Connell, chief financial officer. “The good news is that trends recovered immediately after those storms passed.”

Across the business, which includes Old Navy, Banana Republic, Athleta and Gap, the retailer reported mixed fiscal fourth-quarter results — beating expectations on the bottom line and meeting consensus on revenue.

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

• EPS: 45 cents Compared to the expected 46 cents
• profit: $4.24 billion versus $4.24 billion expected

GAP stock fell as much as 9% in extended trading Thursday.

The company’s reported net income for the three-month period ending Jan. 31 was $171 million, or 45 cents per share, compared to $206 million, or 54 cents per share, a year earlier. During the quarter, Gap’s gross margin was impacted by the tariffs and fell to 38.1%, slightly worse than analysts expected, according to StreetAccount.

Sales rose to $4.24 billion, up about 2% compared to $4.15 billion the previous year.

GAP’s guidance was broadly in line with expectations, but failed to exceed consensus. For the current quarter, revenue is expected to rise Between 1% and 2%, compared to expectations of 2%, according to LSEG.

Over the full year, the company expects sales to grow between 2% and 3%, in line with a 2.5% growth forecast, according to LSEG. Due to a positive legal settlement gap of $313 million during the current quarter, it issued a revised earnings per share forecast for the full year. The company said it expects adjusted earnings per share to range between $2.20 and $2.35, compared to expectations of $2.32, according to LSEG.

O’Connell said Gap did not factor in recent tariff changes in its forecasts because the company believes it is “too early to plan for change” as the situation continues to evolve. Given the size of the hit GAP has taken from President Donald Trump’s global tariffs, which were invalidated by the U.S. Supreme Court last month, it is possible GAP will issue stronger guidance next quarter because the newly enacted 15% tariff is slightly lower than previous rates for many countries.

“if it was [current] “If the Section 122 tariffs remain in place for this year or expire in July, they should produce a more positive outcome versus the projections we provided today. If 15% is the rate that will remain in place for the rest of the year, that rate is slightly lower than the current IEEPA rates that were considered in our plans, so that could give us a modest operating income benefit if that scenario plays out,” O’Connell said.

Gap’s volatile results come just over two years into CEO Richard Dixon’s turnaround plan, and analysts are beginning to expect more from the apparel giant. Now that the company has improved its profitability, returned to growth and amassed an impressive $3 billion cash pile, Dixon said he’s ready to move on to the next phase of the plan, which is all about “building momentum.”

“Our primary focus will be on growing our core apparel business, and we will do this through continuous improvement,” Dixon said. “This has all been driven by disciplined execution, which is what we need to continue to do through better product, better marketing and better storytelling and this is not easy, but we are proving that these muscles are getting stronger and stronger now.”

Meanwhile, Gap is also setting its sights on growth opportunities for the company, including its expansion into beauty and accessories and its fashion and entertainment platform with the recent appointment of a chief entertainment officer. He said that the projects will already begin expanding next year.

Here’s a closer look at each brand’s performance:

Gap’s largest and most important brand saw sales rise 3% to $2.3 billion, with comparable sales also up 3%, well below analysts’ expectations of 4.3%, according to StreetAccount. Despite this misstep, Gap said Old Navy’s “price-value formula resonates with consumers” and it continues to attract shoppers across a wide range of income levels.

The brightest spot in Gap’s quarter came from its namesake logo, which saw sales rise 8% to $1.1 billion with comparable sales up 7%, far exceeding expectations of 4.6%, according to StreetAccount. Under Dixon, the brand has worked to regain its cultural relevance and has won over a wide range of generations, including younger Generation Z shoppers.

The chic safari workwear brand posted its third straight quarter of positive comparable sales, which rose 4%, beating expectations of 2.5%. Sales rose 1% to $549 million, reflecting progress in marketing and product assortment. “Guys continue to build momentum. Key items like the traveler pant, our cashmere program, and really great outerwear that were driving performance, especially this quarter,” Dixon said. “Women’s performance has become more consistent. We’ve had strength in denim skirts and sweaters, and as we get into 2026, the banana is really starting to find its momentum.”

The athleisure brand saw another quarter of declining sales, with revenue down 11% to $354 million and comparable sales down 10%. In some ways, the decline reflects a sluggish sportswear market overall, but the company also faced a number of strategic missteps, including targeting the wrong customer and offering products that failed to reach them. Under the brand’s new CEO, Dixon said Athleta is revamping the assortment, bringing back customer favorites and dialing in innovation.