Gap’s Sales and Profits Hold Steady in Q2 Amid Transformation

Gap continues its transformation, but slows down in the second quarter. The company ended the period (ended August 2nd) with a flat sales and operating profit performance, slowing the pace compared to the first quarter of the year, when it grew by more than 2% and increased its operating profit by nearly 27%.

At the end of the second quarter, sales at Gap, which has been led by Richard Dickson for the past two years, stood at $3.7 billion, in line with $3.72 billion in the same period of 2024.

Operating income, meanwhile, fell slightly (down 0.34%) to $292 million, while net income rose 4.85%, from $206 million in 2Q2024 to $216 million in 2Q2025. Gross margin fell to 41.2%.

For the year-to-date, Gap’s sales stood at $7.188 billion dollars, up 1.12% compared to the first half of 2024. Operating income rose 10.84% to $552 million, and net income increased 12.36% to $409 million.

Gap has reduced its gross margin to 41.2% in the second quarter of the fiscal year

“In the second quarter, Gap exceeded profit expectations and achieved our revenue targets,“ said Richard Dickson, group chairman and chief executive officer. “With positive comparatives for the sixth consecutive quarter, driven by our three core brands, Old Navy, Gap and Banana Republic, it is clear that our strategy is working.

By chain, Old Navy’s second-quarter sales were $2.2 billion, up 1% and 2% like-for-like. Gap reported sales of $772 million, up 1% and 4% like-for-like. The group has begun its repositioning strategy for Gap.

Banana Republic, on the other hand, declined by 1% in the second quarter, to $475 million, while comparable sales rose by 4%. Athleta, meanwhile, sawits sales fall 11% to $300 million, with comparable sales down 9%.

With a $150 million impact from changes in U.S. tariff policy expected, Gap projects growth of 1% to 2% in 2025, with operating margin up 6% to 7%.

At the end of the second quarter, the company had 2,486 stores, in addition to 1,000 more operated through franchises. Of the total number of company-owned stores, 1,240 correspond to Old Navy and 578 to Gap in North America and Asia.