Gap’s fiscal second-quarter revenue fell short of expectations, but Banana Republic exceeded forecasts with a strong sales performance. Athleta’s comps dropped 9%, affecting the overall company’s performance. Gap’s stock dropped in after-hours trading. Gap announced Maggie Gauger as Athleta’s new CEO. The company reported net income of $216 million and $3.73 billion in revenue for the quarter.

Athleta’s comps declined 9%, impacting the company’s overall performance. The company’s CEO expressed disappointment in the quarter’s results and attributed the decline to a shift in focus towards a new customer. Gap is working on a reset for the brand. Gap’s stock dropped in after-hours trading. The company reaffirmed its fiscal 2025 net sales growth outlook.

Gap’s CEO revealed that the company is adjusting pricing to offset the impact of tariffs, which are expected to cost between $150 million and $175 million. Gap is working with suppliers, adjusting sourcing, and diversifying the supply chain. The company expects no further declines in operating income in 2026 due to tariffs. Gap has seen six straight quarters of comparable sales growth.

Gap’s “Better in Denim” campaign has been a success, with 20 million views in the first three days and 400 million total views. The company is positioning itself as a pop culture brand with strong merchandising initiatives and marketing campaigns. The campaign highlights Gap’s efforts to stay competitive in the denim category amid industry partnerships and campaigns.

Each of Gap’s brands had different sales performances in the quarter. Old Navy saw sales of $2.2 billion, Gap saw net sales of $772 million, Banana Republic had net sales of $475 million, and Athleta had sales of $300 million. Athleta’s new CEO is looking to reverse the brand’s sales decline and reconnect with its core consumer.

Read more at CNBC: Gap (GAP) Q2 2025 earnings