Gap falls after Q2 sales miss estimates, tariffs to hit 2025 margins

GAP

29/08/2025 10:40

** Shares of apparel company Gap GAP.N down 1.9% at $21.28 in premarket trading

** Co misses Q2 comparable sales estimates on weaker consumer spending on apparel

** Says tariffs will hit margins by $150 mln to $175 mln for the year

** Forecasts annual operating margin of between 6.7% and 7% vs 7.4% in 2024, but maintains annual comparable sales target of 1% to 2% growth

** Gap's Q2 comparable sales up 1%, missing estimates of 2.26% growth - data compiled by LSEG

** "Amid the uncertain macro environment, visibility to longer-term profitability across the portfolio remains challenging," says Dana Telsey, analyst at Telsey Advisory Group in a note

** Old Navy and Gap brands have performed well during the back-to-school shopping season, and should hold steady in the back half of the year; margin impact from tariffs is material, Telsey adds

** As of last close, GAP down 8.3% YTD

 (Reporting by Juveria Tabassum in Bengaluru)

 ((Juveria.Tabassum@thomsonreuters.com))