Gap (GAP) came out with quarterly earnings of $0.62 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.72 per share a year ago.
The apparel company now expects sales growth of 1.7% to 2% for the year after posting a quarterly profit of $236 million.
Gap blew away expectations for company-wide comparable sales, which grew 5% during the quater after its viral "Better in Denim" campaign with Katseye. CEO Richard Dickson told CNBC economic data points might point to consumer pressure, but the company's customers are still shopping.
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The Gap has outperformed the S&P 500 with a 56% total return since November 2023, driven by strong margin improvements. GPS has achieved substantial EPS growth through maintaining higher operating margins, despite facing ongoing secular headwinds in the retail sector. Valuation multiples for GPS have contracted even as the broader market experienced multiple expansion as the near-term outlook has become challenging due to tariffs.
GAP's Q3 performance is likely to have benefited from brand momentum and strong back-to-school trends, but rising tariff pressures might have eroded gains.
Besides Wall Street's top-and-bottom-line estimates for Gap (GAP), review projections for some of its key metrics to gain a deeper understanding of how the company might have fared during the quarter ended October 2025.
The Gap, Inc. is going to report its fiscal Q3 results soon. The main focus point is Gap's tariff strategy. Tariffs on Vietnam and other sourcing countries will start to affect margins, shifting eyes towards tariff mitigation efforts. Gap's overall sales outlook is fair. The Old Navy, Gap, and Banana Republic brands are performing well. Athleta is still struggling.
Gap (GAP) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
Gap (GAP) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Stephanie Link, CIO at Hightower, joins CNBC's 'Halftime Report' to detail her latest portfolio moves.
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