Financial Performance - Net sales for Q1 Fiscal 2025 were $3.5 billion, a 2% increase year-over-year, with comparable sales also up 2%[3] - Operating income reached $260 million, resulting in an operating margin of 7.5%, an improvement of 140 basis points compared to last year[3] - The company expects full-year Fiscal 2025 net sales growth of 1% to 2%, with operating income growth projected at 8% to 10%[14] - Fiscal year 2024 net sales for Gap Inc. were $15.1 billion[28] - For the 13 weeks ended May 3, 2025, net sales increased to $3.463 billion, up from $3.388 billion in the same period last year, representing a growth of 2.2%[31] - Gross profit for the same period was $1.448 billion, compared to $1.397 billion, reflecting an increase of 3.7%[31] - Operating income rose to $260 million, up from $205 million, marking a growth of 26.8%[31] - Net income for the 13 weeks ended May 3, 2025, was $193 million, compared to $158 million, an increase of 22.1%[31] - Earnings per share (EPS) for the period was $0.51, compared to $0.42 in the prior year, indicating a growth of 21.4%[31] Sales by Segment - Old Navy's net sales were $2.0 billion, up 3% year-over-year, marking the 9th consecutive quarter of market share gains[7] - Gap's net sales increased by 5% to $724 million, achieving positive comparable sales for the 6th consecutive quarter[8] - Banana Republic's net sales decreased by 3% to $428 million, with comparable sales remaining flat[10] - Athleta's net sales fell by 6% to $308 million, with comparable sales down 8%[11] - Old Navy's net sales in the U.S. reached $1,826 million for the first quarter of fiscal year 2025, up from $1,761 million in 2024, marking a 3.7% increase[36] - Athleta's net sales in the U.S. were $373 million for the first quarter of fiscal year 2025, compared to $440 million in 2024, indicating a decrease of 15.2%[36] Cash and Investments - Cash, cash equivalents, and short-term investments totaled $2.2 billion, reflecting a 28% increase from the previous year[3] - Cash, cash equivalents, and restricted cash at the end of the period totaled $2.004 billion, down from $2.365 billion at the beginning of the period[32] - The company reported a net cash used for operating activities of $140 million for the 13 weeks ended May 3, 2025[32] - Free cash flow for the 13 weeks ended May 3, 2025, was $(223) million, a decline from $(63) million in the same period of 2024[35] - The company reported a net cash used for operating activities of $(140) million for the 13 weeks ended May 3, 2025, compared to $30 million in 2024[35] Strategic Initiatives - The anticipated impact of tariffs on Fiscal 2025 operating income is estimated to be between $100 million and $150 million, after mitigation strategies[12] - Free cash flow is emphasized as a key metric for value creation, reflecting the company's ability to generate cash after capital expenditures[34] - Gap Inc. continues to focus on technology improvements and maintaining stores and distribution centers as part of its capital expenditures strategy[34] - The company plans to continue its strategic initiatives, which primarily consist of revenue-generating activities, contributing to overall sales growth[37] Store Operations - The company-operated store count decreased by 10 stores to 2,496 as of May 3, 2025, with net openings/closings including a reduction of 3 stores for Old Navy North America[38] - The square footage of company-operated stores totaled 29.9 million square feet as of May 3, 2025[38] - The total number of franchise stores operated by partners was approximately 1,000 as of May 3, 2025[38]
The Gap, Inc.(GAP) - 2026 Q1 - Quarterly Results