The American fashion group GAP Inc. reported an unchanged net turnover of $ 3.7 billion (3.17 billion euros) for the second quarter of August 2025. Comparable sales rose by one percent compared to the same period in the previous year. This is the sixth quarter in a row with positive growth.
Sales in the branches fell by one percent, while online sales increased by three percent. The e-commerce business thus accounts for 34 percent of the total net turnover. GAP completed the quarter with around 3,500 branches in over 35 countries.
In a press release, GAP CEO Richard Dickson said: “We exceeded the winning expectations and reached our sales specifications.” He continued: “With positive comparative sales in the sixth quarter in a row, driven by our three largest brands Old Navy, Gap and Banana Republic, it is clear that our strategy works.”
Athleta and Banana Republic have a decline, while sister brands have increases
Old Navy’s net turnover rose by one percent to $ 2.2 billion compared to the previous year. The brand’s comparable sales increased by two percent. With GAP, net sales were $ 772 million. This corresponds to an increase of one percent. Meanwhile, comparable sales increased by four percent. This is the seventh quarter in a row with a positive sales turnover. In contrast, Banana Republic recorded net sales from one percent to $ 475 million. However, comparable sales rose by four percent. Athleta was the only brand that recorded declines in both net and comparison sales. The brand’s net turnover fell by eleven percent to $ 300 million. The comparable sales decreased by nine percent. According to the company, Athleta continues to focus on “realigning itself in the long term and improving product and marketing.”
Operating result decreases slightly
The GAP operating result was $ 292 million in the reporting period. This is a minor decline compared to the $ 293 million in the previous year. The operational margin was 7.8 percent. The net profit for the quarter was $ 216 million (200 million euros).
The gross margin fell by 140 basis points to 41.2 percent compared to the previous year. This is due to a decline in the goods margin by 150 basis points. The company attributed this to the elimination of the advantage from additional sales in the second quarter of the 2024 financial year in connection with the agreement on the company’s share of sales of the company’s credit card partner.
GAP keeps forecast in view of the customs uncertainty
With a view to the future, GAP has largely maintained its outlook for the 2025 financial year in view of the customs uncertainty. The company expects an unchanged net turnover compared to the previous year, whereby growth between one and two percent is expected.
The operational margin is expected to be between 6.7 and seven percent. This includes an estimated 100 to 110 basis points net customs requirements. This would mean a decline compared to the margin of 7.4 percent in 2024.
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