Gap Inc. (NYSE: GPS) Quarterly Earnings Preview and Financial Health Analysis

On August 21, 2025, Andrew Garbarino engaged in a sale transaction involving shares of Gap Inc. (NYSE: GPS). The transaction amount was between $1,001 and $15,000. Gap Inc., known for its brands like Old Navy and Banana Republic, is the largest specialty apparel company in America, offering a variety of clothing and lifestyle products globally.

Gap Inc. is set to participate in the 32nd Annual Goldman Sachs Global Retailing Conference on September 4, 2025. The company's President and CEO, Richard Dickson, will represent the company at this event. This participation highlights Gap's active engagement with the financial community and its efforts to communicate its strategic direction and performance expectations.

Despite anticipation of earnings growth, Zacks Investment Research suggests that Gap may not have the ideal factors for an earnings beat. Investors are encouraged to understand the expectations surrounding Gap's financial performance. The company's current stock price is $24.55, showing a 4.38% increase, with a market cap of approximately $9.21 billion.

Gap Inc. has declared a third-quarter dividend of $0.165 per share, payable on October 29, 2025, to shareholders recorded by October 8, 2025. This dividend reflects Gap's commitment to returning value to its shareholders. The company's stock has fluctuated between $23.77 and $24.65 today, with a 52-week range of $9.71 to $30.75.

Gap Inc. continues to focus on social responsibility, supporting employees, communities, and environmental sustainability. The company operates through company-owned and franchise stores, as well as e-commerce platforms, maintaining its influence on culture since its founding in 1969.

• Gap Inc. (NYSE:GPS) is set to release its quarterly earnings with an estimated EPS of $0.40 and projected revenue of $3.63 billion.
• The company's price-to-earnings (P/E) ratio is 12.03, and the price-to-sales ratio is 0.61, indicating a reasonable valuation.
• Gap's current ratio is 1.49, showing sufficient liquidity, but a debt-to-equity ratio of 1.88 suggests higher financial leverage.

Gap Inc. (NYSE:GPS) is a leading name in the apparel industry, known for its popular brands like Old Navy, Gap, Banana Republic, and Athleta. As the largest specialty apparel company in America, Gap offers a diverse range of clothing and lifestyle products for all ages. The company operates globally through its stores, franchises, and online platforms.

On November 14, 2024, Gap is set to release its quarterly earnings, with Wall Street analysts estimating earnings per share (EPS) of $0.40 and projected revenue of $3.63 billion. Gap has a history of surpassing earnings expectations, as highlighted by its recent performance. In the last quarter, Gap exceeded the anticipated EPS of $0.39 by reporting $0.54, a 38.46% surprise.

Gap's financial metrics provide insight into its market valuation and performance. The company has a price-to-earnings (P/E) ratio of 12.03, indicating how the market values its earnings. The price-to-sales ratio is 0.61, meaning investors pay 61 cents for every dollar of sales. These figures suggest a reasonable valuation compared to its industry peers.

The company's enterprise value to sales ratio is 0.84, reflecting its total valuation relative to sales. Additionally, the enterprise value to operating cash flow ratio is 8.07, offering a view of cash flow generation against its valuation. These metrics highlight Gap's ability to generate cash flow efficiently.

Gap's financial health is further supported by its current ratio of 1.49, indicating sufficient liquidity to cover short-term liabilities. However, the debt-to-equity ratio of 1.88 suggests a higher level of financial leverage. Despite this, Gap's earnings yield of 8.31% provides a favorable return on investment for shareholders.

Citi analysts reaffirmed their Buy rating and $32 price target on Gap (NYSE:GPS), anticipating a significant second-quarter earnings beat. The analysts forecast earnings per share (EPS) of $0.50, surpassing the Street estimate of $0.41.

The analysts expect management to raise full-year 2024 sales and implied EPS guidance from approximately $1.60 to over $1.70, reflecting the projected Q2 beat. They anticipate that Q3 guidance will remain relatively in line with current estimates at $0.59, maintaining a conservative approach.

Looking ahead, Citi foresees further sales and EPS growth in 2024, driven by stronger performance from Old Navy and Gap, disciplined expense management, and continued gross margin expansion. The analysts highlight the opportunity for Gap to reduce promotions across all brands in the second half of 2024, providing further upside even as product cost tailwinds diminish.

Citi analysts reaffirmed their Buy rating and $32 price target on Gap (NYSE:GPS), anticipating a significant second-quarter earnings beat. The analysts forecast earnings per share (EPS) of $0.50, surpassing the Street estimate of $0.41.

The analysts expect management to raise full-year 2024 sales and implied EPS guidance from approximately $1.60 to over $1.70, reflecting the projected Q2 beat. They anticipate that Q3 guidance will remain relatively in line with current estimates at $0.59, maintaining a conservative approach.

Looking ahead, Citi foresees further sales and EPS growth in 2024, driven by stronger performance from Old Navy and Gap, disciplined expense management, and continued gross margin expansion. The analysts highlight the opportunity for Gap to reduce promotions across all brands in the second half of 2024, providing further upside even as product cost tailwinds diminish.

TD Cowen analysts upgraded their rating for Gap (NYSE:GPS) to Buy from Hold, increasing their price target on the stock to $30 from $28 to reflect the potential upside in the company's fiscal 2024 estimates.

The analysts attributed their positive outlook to Gap's strong top-line momentum and margin expansion, driven by effective inventory and expense management. They also noted the positive impact of the company's ongoing brand transformation and the sustained growth at Old Navy. Additionally, there is optimism for the Athleta brand to return to growth in the second half of 2024.

TD Cowen highlighted the significant progress made by the new management and sees potential for further improvements. They also believe that Gap and Old Navy are better positioned for the back-to-school season this year, particularly with the launch of a new denim cycle.

A conservative estimate indicates that if Athleta's comparable sales improve to high single digits in the latter half of 2024, compared to the roughly 15% decline in the same period of 2023, overall comparable sales could benefit by approximately 100 basis points. Finally, TD Cowen emphasized that Gap's inventory levels and promotional activities are well-managed, which should lead to gross margin improvements.

TD Cowen analysts upgraded their rating for Gap (NYSE:GPS) to Buy from Hold, increasing their price target on the stock to $30 from $28 to reflect the potential upside in the company's fiscal 2024 estimates.

The analysts attributed their positive outlook to Gap's strong top-line momentum and margin expansion, driven by effective inventory and expense management. They also noted the positive impact of the company's ongoing brand transformation and the sustained growth at Old Navy. Additionally, there is optimism for the Athleta brand to return to growth in the second half of 2024.

TD Cowen highlighted the significant progress made by the new management and sees potential for further improvements. They also believe that Gap and Old Navy are better positioned for the back-to-school season this year, particularly with the launch of a new denim cycle.

A conservative estimate indicates that if Athleta's comparable sales improve to high single digits in the latter half of 2024, compared to the roughly 15% decline in the same period of 2023, overall comparable sales could benefit by approximately 100 basis points. Finally, TD Cowen emphasized that Gap's inventory levels and promotional activities are well-managed, which should lead to gross margin improvements.