Gap Inc ( (GAP) ) has released its Q2 earnings. Here is a breakdown of the information Gap Inc presented to its investors.
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Gap Inc., the largest specialty apparel company in the U.S., operates iconic brands like Old Navy, Gap, Banana Republic, and Athleta, offering clothing and lifestyle products worldwide through both physical and online stores. In its second quarter of fiscal 2025, Gap Inc. reported flat net sales compared to the previous year, with a notable achievement of positive comparable sales for the sixth consecutive quarter, driven by its major brands. The company also saw a 6% increase in diluted earnings per share, reaching $0.57, and a 13% increase in cash and short-term investments, totaling $2.4 billion.
Key financial metrics revealed that Gap Inc. maintained net sales at $3.7 billion, with a slight 1% increase in comparable sales year-over-year. While store sales decreased by 1%, online sales grew by 3%, now representing 34% of total net sales. The gross margin fell by 140 basis points to 41.2%, primarily due to the absence of incremental sales benefits from the previous year. Operating income stood at $292 million, with a net income of $216 million.
Brand-wise, Old Navy and Gap showed resilience with slight increases in net sales and positive comparable sales growth. Banana Republic experienced a slight decline in net sales but achieved a 4% rise in comparable sales, indicating successful brand re-establishment efforts. Athleta faced challenges with an 11% drop in net sales and a 9% decrease in comparable sales, as it continues to focus on long-term brand resetting and improvement.
Looking ahead, Gap Inc. reaffirms its fiscal 2025 outlook, expecting net sales growth of 1% to 2% and maintaining a disciplined approach to inventory management. The company remains committed to advancing its strategic transformation, focusing on building a high-performing company that delivers sustainable, long-term value for shareholders.