Difference’The Revenue of S Fiscal Second quarter became lighter than expected on Thursday, but sales in Banana Republic grew more than expectations as the brand turnaround started showing results.
According to the Strikint, the special atmosphere behind the Banner, the Old Navy, Athlet, the Banana Republic and its name, saw a 1% increase in comparative sales compared to 1% during the quarter, which is weakened by an increase of 1.9%, which analysts expected. Overall, revenue also missed out expectations, while income per share was better than estimates.
The stock of the gap fell into an hourly business.
While Gap, Banana Republic and Old Navy all saw an increase in comparable sales during the quarter, Athlet pulled the company’s overall performance 9%with comps.
CEO Richard Dixon told CNBC in an interview, “Clearly, athlet is a powerful brand in active space, which is the number five brand in space, but we are disappointed in Quarter. We’ve gone away, if you really get away from the roots,” CEO Richard Dixon told CNBC in an interview. “We have given a lot of attention, trying to do a new customer in court, and eventually did not have enough offerings for our main customer. As we balance, we have been very transparent to say that this is the year of reset for us.”
Last month, the gap announced that Maggi GoggerA long -time veteran of Nike was tapped as the next CEO of Athlet – the third top executive hired the brand in the last two years to help the brand.
Here’s how it was performed in the quarter compared to Wall Street, based on a survey of analysts by LSEG:
- earnings per share: 57 cents are expected of 55 cents
- Income: $ 3.73 billion vs $ 3.74 billion is expected
A year ago, the company reported net income for a period of three months ending August 2, compared to $ 206 million or 54 cents per share.
Sales rose slightly from $ 3.72 billion to $ 3.73 billion a year ago.
According to LSEG, the company confirmed its fiscal 2025 net sales growth approach and continues to expect revenue between 1%and 2%, according to estimates of 1.6%. For the current quarter, interval sales are expected to grow between 1.5% and 2.5%, which is better than 2%, which analysts estimated that according to LSEG.
When interval Final result in MayThe state of tariff in Asia, where the company manufactures some of its products, was still shaping but now, the picture is clear. It had earlier stated that it expects the tariff to cost between $ 100 million and $ 150 million on a pure basis and on Thursday, said that the costs are now going to be between $ 150 million and $ 175 million.
To offset the effect, what the gap is doing what other companies are doing: working with their suppliers, adjusting its sourcing, diversifying its supply chain and increasing the target price where suitable.
In particular, the company said it does not expect annualization of tariffs due to any decline in operating income in 2026.
“As it belongs to pricing, we are making target adjustments with pricing, as we always do. There is nothing we have done,” Dixon said. “We focus on ensuring that we are presenting the correct price offer to our consumer, and eventually want to ensure that we are maintaining speed and market share profit that is performing our playbook.”
The company is in a separate position, as the CEO of the gap for just two years in Dixon’s tenure. This comparable sales growth has been seen directly to quarters, it is sitting on a $ 2.2 billion cash pile and its brand is back to the center of culture and interaction.
Recently, the gap launched its “Better in Denim” campaign, characterizing the 2003 hit “Milkshek” of Catase and Kelis. Dixon said the campaign has been a standout success, which offers 20 million times in the first three days, 400 million total views and 8 billion impressions. This is also the number 1 discovery on Tikkok, Dixon said.
“We can all accept that the gap had gone away from a retailer of a clothing a few years ago, it was a highly pracharak and not necessarily a strong voice from a business point of view for consumers, and now, it is a pop culture brand that is telling great stories, which is shaping culture with certain programs and marketing campaigns and shaping culture, saying the culture. “It is proving that the gap is a powerful pop culture brand, and also looks like our playbook when you correct it.”
The campaign has highlighted efforts to remain competitive in particularly important denim category Levy recent Partnership with Beyonsey And American Eagle‘S Campaign with Sydney SweenyAt a time when consumers are pulling back on good products such as new fabrics and accessories, retailers are cut through noise and ensure that they are echoing with consumers.
Nevertheless, as the company continues to progress in its turnout plan, Wall Street has come to expect high, and the interval has to work hard to defeat expectations.
According to the Strikut, during the quarter, its gross margin came at 41.2%behind expectations of 41.9%.
Here a close to see how each brand performed:
old Navy: The largest and most important brand of the gap saw a sales of $ 2.2 billion to 1% compared to last year. According to the Strikount, comparative sales were 2%compared to the expectations of 2.2%.
Difference: Nemken banner saw a net sales of $ 772 million compared to 1% compared to last year. According to Streetaccount, comparative sales were 4%compared to expectations of 4.1%. Seventh consecutive quarter of comparable sales growth.
Banana Republic: Safari-Cut, Business Essential Brand saw a net sales of $ 475 million compared to 1% compared to last year. According to the Strikint, comparative sales were up to 4%from expectations of 0.2%.
Athlet: The Ethlecker brand saw a selling of $ 300 million, declining 11% compared to last year. Comparable sales were 9%below. The new CEO of the brand is looking at the recession to reverse the recession and re -connects with the main consumer of the athlet.
