Gap Inc. Q4 Sales Up 2% with 3% Comps, Tariffs Slash Profit
Gap Inc reported Q4 net sales rose 2% to $4.24B with comparable sales up 3%, driven by Gap (+7%), Old Navy (+3%) and Banana (+4%), while Athleta fell 10%. Operating income slid to $229M and net income to $171M due to tariffs, despite record 25-year gross margin and $3B cash.
1. Q4 Sales and Profit
Gap Inc posted net sales of $4.24 billion in the fourth quarter, up 2% from a year ago, with comparable sales growth of 3%. Operating income declined to $229 million from $259 million, and net income fell to $171 million from $206 million.
2. Tariff Headwinds and Margins
Tariffs trimmed roughly 200 basis points from operating and net income in the quarter, contributing to the profit decline. Despite this, Gap achieved one of its highest gross margins in 25 years and ended the fiscal year with a $3 billion cash balance.
3. Brand-Level Performance
Old Navy delivered 3% comparable sales growth and $2.3 billion in Q4 revenue, while Gap saw a 7% comp gain on $1.1 billion in sales. Banana Republic comps rose 4% on $549 million revenue, and Athleta comps fell 10% to $354 million.
4. 2026 Outlook and Growth Plans
Gap projects 2–3% net sales growth and flat to slightly higher gross margins for 2026, with diluted EPS of $2.71–$2.86. The company plans to expand lifestyle categories, build its fashion-tainment platform, and advance AI and marketing capabilities.