Gap(GPS) - 2026 Q3 - Quarterly Results

Sales Performance - Net sales for Q3 2025 reached $3.9 billion, a 3% increase compared to last year, with comparable sales up 5% year-over-year[3] - Old Navy's Q3 net sales were $2.3 billion, up 5%, with comparable sales increasing by 6%[8] - Gap's Q3 net sales were $951 million, up 6%, achieving positive comparable sales for the 8th consecutive quarter[9] - Banana Republic's Q3 net sales were $464 million, down 1%, but comparable sales increased by 4%[11] - Athleta's Q3 net sales were $257 million, down 11%, with comparable sales also down 11%[12] - Net sales for the 13 weeks ended November 1, 2025, were $3,942 million, a 2.9% increase from $3,829 million for the same period in 2024[32] - Old Navy's net sales in the U.S. for the 13 weeks ended November 1, 2025, were $2,049 million, an increase from $1,949 million in the same period of 2024[37] Financial Metrics - Gross margin was 42.4%, exceeding expectations, although it decreased by 30 basis points from the previous year[3] - Operating income for Q3 was $334 million, resulting in an operating margin of 8.5%[10] - Year-to-date free cash flow was $280 million, with cash and short-term investments totaling $2.5 billion, a 13% increase from the prior year[10] - Gross profit for the 39 weeks ended November 1, 2025, was $4,654 million, compared to $4,615 million for the same period in 2024, reflecting a slight increase[32] - Net income for the 39 weeks ended November 1, 2025, was $645 million, up from $638 million in 2024, indicating a growth of 1.1%[33] - Free cash flow for the 39 weeks ended November 1, 2025, was $280 million, down from $540 million in 2024, representing a decrease of 48.5%[36] Assets and Equity - Total assets increased to $12,370 million as of November 1, 2025, compared to $11,853 million as of November 2, 2024, marking a growth of 4.4%[31] - Total stockholders' equity rose to $3,647 million as of November 1, 2025, up from $3,135 million in 2024, reflecting a significant increase of 16.3%[31] Operational Metrics - The company operated 2,497 company-operated stores as of November 1, 2025, with a net decrease of 9 stores during the year[39] - The company reported a decrease in cash provided by operating activities to $607 million for the 39 weeks ended November 1, 2025, down from $870 million in 2024[33] - The long-term debt remained stable at $1,491 million as of November 1, 2025, compared to $1,489 million in 2024[31] Outlook - The company raised its full year net sales growth outlook to the high end of the prior guidance range[2]