Business
Gap stock falls as retailer misses sales expectations, warns tariffs will impact profits
Gap stock fell in extended trading on Thursday after the company warned tariffs will impact its profits moving forward.
When Gap last reported results in May, it said it expected tariffs to cost between $100 million and $150 million on a net basis, but on Thursday, it said those costs are now going to be between $150 million and $175 million.
Its full-year operating margin is expected to be between 6.7% and 7%, down from 7.4% in the previous fiscal year, reflecting a tariff impact between 1 percentage point and 1.10 percentage points.
In its current quarter, its expecting its gross margin to be down between 1.5 and 1.7 percentage points, driven by tariff costs.
Beyond tariffs, the specialty apparel company behind Old Navy, Athleta, Banana Republic and its namesake banner delivered mixed results in its fiscal second quarter. Here’s how Gap performed in the quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: 57 cents vs. 55 cents expected
- Revenue: $3.73 billion vs. $3.74 billion expected
The company’s reported net income for the three-month period that ended Aug. 2 was $216 million, or 57 cents per share, compared with $206 million, or 54 cents per share, a year earlier.
Sales rose to $3.73 billion, up slightly from $3.72 billion a year earlier. Sales came in lower than expected and so did comparable sales. During the quarter, comparable sales rose 1%, weaker than the 1.9% rise that analysts had expected, according to StreetAccount.
While Gap, Banana Republic and Old Navy all saw comparable sales rise during the quarter, Athleta dragged down the company’s overall performance with comps down 9%.
“Clearly, Athleta is a powerful brand in the active space, being the number five brand in the space, but we’re disappointed in the quarter. We have moved away, if you will, from really distinctive performance roots,” CEO Richard Dickson told CNBC in an interview. “We’ve paid a lot of attention, trying to court a new customer, and ultimately didn’t have enough offerings for our core customer. As we balance that out, we’ve been very transparent to say it’s a year of reset for us.”
Last month, Gap announced that Maggie Gauger, a longtime veteran of Nike, had been tapped as Athleta’s next CEO — the third top executive hired to helm the brand in the last two years.
The company reaffirmed its fiscal 2025 net sales growth outlook and is continuing to expect revenue to grow between 1% and 2%, in line with estimates of 1.6%, according to LSEG. For the current quarter, Gap is expecting sales to grow between 1.5% and 2.5%, better than the 2% that analysts had estimated, according to LSEG.
To offset the impact of tariffs, Gap is doing what other companies are doing: working with its suppliers, adjusting its sourcing, diversifying its supply chain and taking targeted price increases where appropriate.
Notably, the company said it doesn’t expect the annualization of tariffs to cause any further declines in operating income in 2026.
“As it relates to pricing, we’re making targeted adjustments with pricing, as we always do. There isn’t anything that we’ve done that is substantially different,” Dickson said. “We focus on making sure that we’re presenting to our consumer the right value proposition, and ultimately want to make even more sure that we’re sustaining the momentum and market share gains that our playbook has been performing.”
Just over two years into Dickson’s tenure as Gap’s CEO, the company is in a far different position. It’s seen six straight quarters of comparable sales growth, it’s sitting on a $2.2 billion cash pile and its brands are back at the center of culture and conversation.
Recently, Gap launched its “Better in Denim” campaign featuring Katseye and Kelis’s 2003 hit “Milkshake.” Dickson said the campaign has been a standout success, delivering 20 million views in the first three days, 400 million total views and 8 billion impressions. It’s also the No. 1 search on TikTok, Dickson said.
“We could all acknowledge that Gap moved from what was a clothing retailer just a couple years ago, that was overly promotional and didn’t have necessarily a strong voice from a merchandising perspective to consumers, and now today, it is a pop culture brand that’s telling great stories, driving great merchandising initiatives and arguably shaping culture with some of the programs and products and marketing campaigns,” Dickson said. “This is proving that Gap is a powerful pop culture brand, and this is also what our playbook looks like when you get it right.”
The campaign highlights the efforts Gap is taking to stay competitive in the crucial denim category, especially with Levi’s recent partnership with Beyoncé and American Eagle‘s campaign with Sydney Sweeney. At a time when consumers are pulling back on nice-to-have products like new clothes and accessories, retailers have had to do more to cut through the noise and ensure they’re resonating with consumers.
Still, as the company continues to make strides in its turnaround plan, Wall Street has come to expect a lot, and Gap has had to work harder to beat expectations.
During the quarter, its gross margin came in at 41.2%, behind expectations of 41.9%, according to StreetAccount.
Here’s a closer look at how each brand performed:
Old Navy: Gap’s largest and most important brand saw sales of of $2.2 billion, up 1% compared with last year. Comparable sales were up 2%, compared with expectations of up 2.2%, according to StreetAccount.
Gap: The namesake banner saw net sales of $772 million, up 1% compared with last year. Comparable sales were up 4%, compared with expectations of 4.1%, according to StreetAccount. Its the seventh consecutive quarter of comparable sales growth.
Banana Republic: The safari-chic, business essentials brand saw net sales of $475 million, down 1% compared with last year. Comparable sales were up 4%, far ahead of expectations of 0.2%, according to StreetAccount.
Athleta: The athleisure brand saw sales of $300 million, down 11% compared to last year. Comparable sales were down 9%. The brand’s new CEO is looking to reverse that slump and reconnect with Athleta’s core consumer.
Business
Reliance Industries AGM 2025 Live Updates: Mukesh Ambani Set To Address 44 Lakh RIL Shareholders Shortly
Reliance AGM 2025 Live Updates: Reliance Industries Ltd. (RIL) is set to hold its 48th Annual General Meeting (AGM) today at 2:00 pm through video conferencing (VC) and other audio-visual means (OAVM). Investors will keenly watch RIL Chairman & Managing Director Mukesh Ambani’s live speech for announcements that could shape the company’s next phase of growth across its digital, retail, and energy businesses.
The event will be livestreamed across digital platforms, including YouTube, X, Facebook, Instagram, and JioEvents. The streaming will start at 2:00 pm.
(Disclaimer: Network18 and TV18 – the companies that operate news18.com – are controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
Vehicle breakdown specialist RAC has revealed stronger revenues and profits after it saw member numbers grow to 15 million.
The breakdown, insurance and maintenance firm reported that revenues grew by 8% to £411 million over the first half of 2025, putting it “on track” for another year of growth.
It said this included growth across each of its three main divisions.
The 128-year-old business said it is “confident” about its outlook for the rest of the year and for the longer term.
This came after membership numbers grew to 15 million from 14.1 million a year earlier.
RAC also reported that group earnings before tax, interest, depreciation and amortisation, grew by 12% to £152 million over the half-year.
The roadside assistant giant is owned by CVC Capital Partners, the Singaporean sovereign investment fund GIC and Silver Lake Partners.
Sky News reported in July that the firm’s owners were preparing to offload the business in a potential sale or stock market float, which could value the RAC at about £5 billion.
Dave Hobday, chief executive of the RAC, said: “2025 is set to be our 14th year of consecutive growth and I am delighted with our strong first-half performance and the continued progress we have made towards our vision to be the UK’s number one for driving services.
“Through our three complementary offerings: breakdown; insurance; and service, maintenance & repair; UK motorists are increasingly choosing us as their one-stop-shop at every stage of their driving journey.
“During the half-year period, we welcomed 500,000 new breakdown members and 10,000 motor insurance members, while our expanding team of mobile mechanics delivered more than double the number of repair and maintenance jobs.
“At the same time, our ongoing investment in AI, digital, and data accelerated performance across the board.”
Business
Vikran Engineering IPO Last Day: Issue Gets 6.9x Subscription So Far, Should You Apply? Check GMP
Last Updated:
Vikran Engineering GMP Today: Its grey market premium currently stands at 12.37%, indicating mild listing gains for investors.
Vikran Engineering IPO GMP.
Vikran Engineering IPO GMP: The initial public offering of Vikran Engineering Ltd, an infrastructure EPC company, is going to be closed today, Friday, August 29. The price of the Rs 772-crore IPO has been fixed in the range of Rs 92 to Rs 97 per share. Till 10:40 am on the final day of bidding on Friday, the issue received a 6.89x subscription, garnering bids for 38,38,61,976 shares as against the 5,57,11,341 shares on offer.
The retail and NII participation stood at 6.47x and 15.76x, respectively. The QIB category was subscribed by 0.97x.
The IPO’s grey market premium on Friday stood at 12.37%, indicating mild listing gains for investors.
Vikran Engineering IPO Key Dates
The IPO will remain open for public subscription between August 26, 2025, and August 29, 2025. The share allotment will likely be finalised on September 1, and the company is expected to be listed on both BSE and NSE on September 3.
Vikran Engineering IPO Price And Lot Size
The price of the IPO has been fixed in the range of Rs 92 to Rs 97 per share.
For investors, the minimum lot size for the IPO is 148. It means investors will have to apply for a minimum of 148 shares or in multiple thereof. So, retail investors require a minimum capital of Rs 14,356 to apply for the IPO.
Vikran Engineering IPO GMP Today
According to market observers, unlisted shares of Vikran Engineering Ltd are currently trading at Rs 109 against the upper IPO price of Rs 97. It means a grey market premium or GMP of Rs 12, which is 12.37% over its issue price, indicating a mild listing gains.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Vikran Engineering IPO: Should You Apply?
Market experts are largely optimistic about the prospects of Vikran Engineering’s public issue. Giving a positive outlook, Anshul Jain, head of research at Lakshmishree Investment, said that Vikran Engineering’s strong execution track record with government and PSU clients, coupled with its experienced management team and exposure to a high-growth sector, make it well-placed for scalability.
Jain recommended a ‘Subscribe’ rating for long-term investors.
Shivani Nyati, head of wealth at Swastika Investmart, said the company is among the fastest-growing Indian EPC players, with a revenue CAGR of 32.17%. She highlighted its consistent growth in revenue and profitability, along with a strong order book of over Rs 2,442 crore as of June 30, 2025.
She said the IPO is fairly priced, and investors may look at it both for listing gains and long-term potential.
Brokerages including BP Equities, Arihant Capital Markets, Adroit Financial Services, AUM Capital, and Canara Bank Securities have also given a ‘subscribe’ call on the issue.
Vikran Engineering IPO: More Details
The IPO is a mix of fresh issue of shares of about Rs 721 crore and an offer-for-sale portion worth Rs 51 crore by the promoter.
The Mumbai-based company intends to utilise proceeds from the fresh issue to the tune of Rs 541 crore for funding working capital requirements and the rest for general corporate purposes.
Vikran Engineering provides end-to-end services from conceptualisation, design, supply, installation, testing, and commissioning on a turnkey basis.
As of June 30, 2025, the company completed 45 projects across 14 states with a total executed contract value of Rs 1,920 crore. It has 44 ongoing projects across 16 states, aggregating orders worth Rs 5,120 crore.
Vikran Engineering’s revenue from operations increased 16.53 per cent to Rs 916 crore in FY25 from Rs 786 crore in the previous financial year, and profit after tax rose 4 per cent to Rs 78 crore in FY25 from Rs 75 crore in FY24.
Pantomath Capital Advisors and Systematix Corporate Services are the book-running lead managers, while Bigshare Services is the registrar of the issue.
The company’s shares will be listed on the BSE and the NSE.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
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