Gap Inc. Delivers 2% Q4 Sales Growth with Eight Consecutive Positive Comps
Gap Inc.’s Q4 net sales rose 2% to $4.2B with 3% comparable sales growth, marking eight straight positive comp quarters and Banana Republic’s third straight comp gain. Tariff pressures cut gross margin to 38.1% and left FY25 with $3B cash, $823M free cash flow and a $1B share repurchase authorization.
1. Q4 Sales and Comparable Growth
Gap Inc. reported Q4 net sales of $4.2 billion, up 2% year-over-year, with comparable sales rising 3%, marking the company’s eighth consecutive quarter of positive comps across its brand portfolio.
2. Brand Performance Highlights
Banana Republic achieved its third straight quarter of comparable sales growth, Gap brand net sales climbed 8% to $1.1 billion with comps up 7%, and Old Navy maintained strength in active, denim and kids segments.
3. Margin Impact from Tariffs
Changes in global tariff rates in 2025 reduced Q4 gross and operating margins by approximately 200 basis points, driving gross margin down to 38.1% (-80 bps) and merchandise margin down 90 basis points despite reduced discounting.
4. Fiscal 2025 Cash Generation and Capital Returns
The company closed FY25 with $3 billion in cash and short-term investments, generated $823 million in free cash flow, raised its quarterly dividend by 6% to $0.175 per share and authorized a $1 billion share buyback.