gap-20251101

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 1, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-7562

THE GAP, INC.

(Exact name of registrant as specified in its charter)


Delaware						94-1697231
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Two Folsom Street

San Francisco, California 94105

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (415) 427-0100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.05 par value

GAP

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of the registrant’s common stock outstanding as of November 18, 2025 was 371,921,740.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “project,” and similar expressions also identify forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding the following:

•considering the impact of changes in U.S. trade policy and tariffs on the assumptions and estimates used when preparing our financial information;

•the impact of recent accounting pronouncements;

•the timing of revenue recognition of upfront payments related to our credit card program agreement;

•the timing of recognition in income of unrealized gains and losses from designated cash flow hedges;

•the impact of losses due to indemnification obligations on the Condensed Consolidated Financial Statements;

•the outcome of proceedings, lawsuits, disputes, and claims, including the impact of such actions on the Condensed Consolidated Financial Statements and our financial results;

•the Gap Taiwan operations;

•our arrangements with third parties to operate stores and websites selling apparel and related products under our brand names;

•maintaining and building upon financial and operational rigor, through an optimized cost structure and disciplined inventory management;

•reinvigorating our brands to drive relevance and an engaging omni-channel experience;

•strengthening and evolving our operating platform with a digital-first mindset to drive scale and efficiency;

•energizing our culture by attracting and retaining strong talent;

•continuing to integrate sustainability into business practices to support long-term growth;

•the impact of higher tariff rates on our gross margins in future quarters;

•continuing to monitor macroeconomic conditions and the impact of the current U.S. trade policy and higher tariff rates;

•evaluating and pursuing mitigating actions;

•the impact of macroeconomic factors on consumer behavior and continued uncertainty related to the macroeconomic environment;

•our ability to supplement near-term liquidity, if necessary, with our ABL Facility (as defined below) or other available market instruments;

•the impact of the seasonality of our operations, in addition to the impact of macroeconomic factors, on certain asset and liability accounts and cash inflows and outflows;

•the ability of our current balances of cash, cash equivalents, and short-term investments, along with our cash flows from operations, our ABL Facility, and other available market instruments to support our future business operations and liquidity requirements;

•the importance of our sustained ability to generate free cash flow, which is a non-GAAP financial measure and is defined and discussed in more detail in Part I, Item 2 of this Form 10-Q below;

•our dividend policy, including the potential timing and amounts of future dividends; and

•the impact of changes in internal control over financial reporting.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the following risks, any of which could have an adverse effect on our business, financial condition, results of operations, or reputation:

•the overall global economic and geopolitical environment, uncertainties related to government fiscal, monetary, trade, and tax policies, and consumer spending patterns;

•recent changes in U.S. trade policy and tariffs, and the risk of potential future changes or worsening trade tensions between the United States and other countries;

•the risk that trade matters, including tariffs on goods imported from our sourcing countries, could further increase our costs, or reduce the supply of apparel available to us;

•the risk that our enterprise risk management efforts will not be successful in mitigating the negative impact of tariffs;

•the risk that our investments in customer, digital, omni-channel, and other strategic initiatives, including beauty, may not deliver the results we anticipate;

•the highly competitive nature of our business in the United States and internationally;

•the risk that we or our franchisees may be unsuccessful in gauging apparel trends and changing consumer preferences or responding with sufficient lead time;

•the risk that we may be unable to manage our inventory and fulfillment operations effectively and the resulting impact on our sales and results of operations;

•the risk that we fail to maintain, enhance and protect our brand image and reputation;

•the risk that failures of, or updates or changes to, our digital and information technology systems, including our continued integration of data science and artificial intelligence, may disrupt our operations;

•the risk that we do not successfully implement our marketing efforts, or that our talent partnerships expose us to reputational or other risks;

•the risk that we fail to manage key executive succession and retention and to continue to attract qualified personnel;

•the risks to our business, including our costs and global supply chain, associated with global sourcing and manufacturing;

•the risks of U.S. or foreign labor strikes, work stoppages, boycotts, port congestion, and other disruptions to our sourcing operations;

•the risk that our technology systems that support our e-commerce platform may not be effective or function properly;

•the risks to our reputation or operations associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct;

•the risk that we or our franchisees may be unsuccessful in identifying, negotiating, and securing new store locations and renewing, modifying, or terminating leases for existing store locations effectively;

•the risk that our franchisees and licensees could impair the value of our brands;

•the risk that our efforts to expand internationally may not be successful;

•engaging in or seeking to engage in strategic transactions that are subject to various risks and uncertainties;

•the risk of loss or theft of assets, including inventory shortage;

•the risk of information security breaches or vulnerabilities that may result in increased costs, violations of law, significant legal and financial exposure, and a loss of confidence in our security measures;

•reductions in income and cash flow from our credit card programs;

•the risk of foreign currency exchange rate fluctuations;

•the risk that our comparable sales and margins may experience fluctuations or that we may fail to meet financial market expectations;

•the risk that our level of indebtedness may impact our ability to operate and expand our business;

•the risk that we and our subsidiaries may be unable to meet our obligations under our indebtedness agreements;

•the risk that covenants in our indebtedness agreements may restrict or limit our business;

•the risk that changes in our credit profile or deterioration in market conditions may limit our access to the capital markets;

•evolving regulations and expectations with respect to environmental, social, and governance matters, and increased scrutiny of diversity, equity, and inclusion initiatives;

•the adverse impacts of climate change on our business;

•natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events;

•our failure to comply with applicable laws and regulations and changes in the regulatory or administrative landscape;

•the risk that we will not be successful in defending various proceedings, lawsuits, disputes, and claims;

•the risk that the assumptions and estimates used when preparing the Condensed Consolidated Financial Statements, including estimates and assumptions regarding inventory valuation, income taxes and valuation allowances, sales return and bad debt allowances, deferred revenue, and the impairment of long-lived assets, are inaccurate or may change, and the resulting impact on our results of operations;

•the risk that changes in the geographic mix and level of income or losses, the expected or actual outcome of audits, changes in deferred tax valuation allowances, and new legislation could impact our effective tax rate, or that we may be required to pay amounts in excess of established tax liabilities; and

•the risk that the adoption of new accounting pronouncements will impact future results.

Additional information regarding factors that could cause results to differ can be found in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025, our Quarterly Reports on Form 10-Q for the fiscal quarters ended May 3, 2025 and August 2, 2025, and our other filings with the U.S. Securities and Exchange Commission.

Future economic and industry trends that could potentially impact net sales and profitability are difficult to predict. These forward-looking statements are based on information as of November 25, 2025. We assume no obligation to publicly update or revise our forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

We suggest that this document be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that Gap Inc. announces material financial and operational information to its investors using its Investor Relations website, press releases, SEC filings, and public conference calls and webcasts. Gap Inc. and each of its brands also use LinkedIn and Instagram as a means of disclosing information about Gap Inc. and for complying with disclosure obligations under Regulation FD. The social media channels that Gap Inc. and its brands intend to use as a means of disclosing information described above may be updated from time to time as listed on Gap Inc.’s Investor Relations website. The information we post through these channels is not part of this Quarterly Report.

THE GAP, INC.

TABLE OF CONTENTS


		Page
	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets as of November 1 , 2025, February 1, 2025, and November 2 , 2024	1

	Condensed Consolidated Statements of Operations for the 13 Weeks and 39 Weeks Ended November 1 , 2025 and November 2 , 2024	2

	Condensed Consolidated Statements of Comprehensive Income for the 13 Weeks and 39 Weeks Ended November 1 , 2025 and November 2 , 2024	3

	Condensed Consolidated Statements of Stockholders' Equity for the 13 Weeks and 39 Weeks Ended November 1 , 2025 and November 2 , 2024	4

	Condensed Consolidated Statements of Cash Flows for the 39 Weeks Ended November 1 , 2025 and November 2 , 2024	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	22

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

THE GAP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


($ and shares in millions except par value)	November 1, 2025		February 1, 2025		November 2, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	2,262	$	2,335	$	1,969
Short-term investments	255		253		250
Merchandise inventory	2,459		2,067		2,331
Other current assets	664		548		580
Total current assets	5,640		5,203		5,130
Property and equipment, net of accumulated depreciation of $5,060, $4,930, and $4,985	2,517		2,496		2,546
Operating lease assets	3,337		3,240		3,217
Other long-term assets	876		946		960
Total assets	$	12,370	$	11,885	$	11,853
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,545	$	1,488	$	1,523
Accrued expenses and other current liabilities	1,067		1,083		1,135
Current portion of operating lease liabilities	629		632		617
Income taxes payable	38		53		50
Total current liabilities	3,279		3,256		3,325
Long-term liabilities:

Long-term debt	1,491		1,490		1,489
Long-term operating lease liabilities	3,396		3,353		3,360
Other long-term liabilities	557		522		544
Total long-term liabilities	5,444		5,365		5,393
Commitments and contingencies (see Note 9)
Stockholders’ equity:
Common stock $0.05 par value
Authorized 2,300 shares for all periods presented; Issued and Outstanding 372, 374, and 377 shares	19		19		19
Additional paid-in capital	81		146		177
Retained earnings	3,499		3,039		2,889
Accumulated other comprehensive income	48		60		50
Total stockholders’ equity	3,647		3,264		3,135
Total liabilities and stockholders’ equity	$	12,370	$	11,885	$	11,853

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	13 Weeks Ended				39 Weeks Ended
($ and shares in millions except per share amounts)	November 1, 2025		November 2, 2024		November 1, 2025		November 2, 2024
Net sales	$	3,942	$	3,829	$	11,130	$	10,937
Cost of goods sold and occupancy expenses	2,272		2,194		6,476		6,322
Gross profit	1,670		1,635		4,654		4,615
Operating expenses	1,336		1,280		3,768		3,762
Operating income	334		355		886		853
Interest expense	23		23		69		68
Interest income	(26)		(29)		(79)		(80)
Income before income taxes	337		361		896		865
Income tax expense	101		87		251		227
Net income	$	236	$	274	$	645	$	638
Weighted-average number of shares - basic	372		377		373		376
Weighted-average number of shares - diluted	380		383		382		383
Earnings per share - basic	$	0.63	$	0.73	$	1.73	$	1.70
Earnings per share - diluted	$	0.62	$	0.72	$	1.69	$	1.67

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	13 Weeks Ended				39 Weeks Ended
($ in millions)	November 1, 2025		November 2, 2024		November 1, 2025		November 2, 2024
Net income	$	236	$	274	$	645	$	638
Other comprehensive income (loss), net of tax
Foreign currency translation and other, net of tax expense of $—, $—, $1, $—	—		(3)		(5)		—
Change in fair value of derivative financial instruments, net of tax expense of $2, $1, $1, $6	9		5		(1)		11
Reclassification adjustment for gains on derivative financial instruments, net of tax expense of $—, $(1), $(1), $(6)	(2)		(3)		(6)		(4)
Other comprehensive income (loss), net of tax	7		(1)		(12)		7
Comprehensive income	$	243	$	273	$	633	$	645

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income
($ and shares in millions except per share amounts)	Shares	Amount								Total
Balance as of August 2, 2025	371	$	19	$	48	$	3,325	$	41	$	3,433
Net income for the 13 weeks ended November 1, 2025						236				236
Other comprehensive income, net of tax								7		7




Issuance of common stock related to stock options and employee stock purchase plans	—	—		6						6
Issuance of common stock and withholding tax payments related to vesting of stock units	1	—		(10)						(10)
Share-based compensation, net of forfeitures				37						37
Common stock dividends declared and paid ($0.165 per share)						(62)				(62)
Balance as of November 1, 2025	372	$	19	$	81	$	3,499	$	48	$	3,647

Balance as of August 3, 2024	376	$	19	$	159	$	2,672	$	51	$	2,901

Net income for the 13 weeks ended November 2, 2024						274				274
Other comprehensive loss, net of tax								(1)		(1)




Issuance of common stock related to stock options and employee stock purchase plans	1	—		6						6
Issuance of common stock and withholding tax payments related to vesting of stock units	—	—		(15)						(15)
Share-based compensation, net of forfeitures				27						27
Common stock dividends declared and paid ($0.15 per share)						(57)				(57)
Balance as of November 2, 2024	377	$	19	$	177	$	2,889	$	50	$	3,135

See Accompanying Notes to Condensed Consolidated Financial Statements

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income
($ and shares in millions except per share amounts)	Shares	Amount								Total
Balance as of February 1, 2025	374	$	19	$	146	$	3,039	$	60	$	3,264
Net income for the 39 weeks ended November 1, 2025						645				645
Other comprehensive loss, net of tax								(12)		(12)




Repurchases and retirement of common stock	(7)	—		(152)						(152)
Issuance of common stock related to stock options and employee stock purchase plans	1	—		18						18
Issuance of common stock and withholding tax payments related to vesting of stock units	4	—		(39)						(39)
Share-based compensation, net of forfeitures				108						108
Common stock dividends declared and paid ($0.495 per share)						(185)				(185)
Balance as of November 1, 2025	372	$	19	$	81	$	3,499	$	48	$	3,647

Balance as of February 3, 2024	372	$	19	$	113	$	2,420	$	43	$	2,595

Net income for the 39 weeks ended November 2, 2024						638				638
Other comprehensive income, net of tax								7		7

SEC Form 10-Q filed by Gap Inc.