Gap Shares Plunge 13% After Q4 Results, Athleta Comps Slide 10%
Gap achieved its eighth straight quarter of comparable-sales growth, with the Gap brand up 7% while Athleta fell 10% and tariffs cut 200 basis points from margins. Q4 revenue rose 2.1% to $4.24 billion and cash hit $3 billion, yet shares dropped 13% after forecasting Q1 sales of $3.51 billion.
1. Q4 Financial Results
Gap Inc posted 2.1% revenue growth to $4.24 billion and recorded its eighth consecutive quarter of comparable-sales growth, but lowered Q1 revenue guidance to $3.51 billion, triggering a 13% share drop.
2. Brand Performance Divergence
The Gap brand saw a 7% lift in comparable sales, while Athleta comps declined 10%, highlighting uneven momentum across the portfolio and prompting concerns among investors.
3. Margin and Cash Position
Rising tariffs shaved 200 basis points from gross margin, but the company ended the quarter with a $3 billion cash balance and unveiled a $150 million cost savings plan including AI-driven pricing and design initiatives.