In a Thursday interview with CNBC’s Jim Cramer, Gap CEO Richard Dickson reviewed the apparel maker’s recent quarter and addressed how tariffs will affect business.
“There are things that you can control and there are things that you can’t control,” Dickson said. “I think what we are representing is, the things that we can control we’re doing really well. The team is doing a great job with our mitigation plans.”
Gap — which owns Banana Republic, Old Navy, Athleta, as well as its namesake brand — posted mixed quarterly results Thursday after close, sending shares down in extended trading. The company reported a slight revenue miss, and it warned that tariffs would impact profits more than originally expected.
During its last report in May, Gap predicted tariffs would cost between $100 million and $150 million. But the company said it now estimates costs to be between $150 million and $175 million.
Dickson said his company has been “thoughtful on our adjustments to sourcing, manufacturing, assortments and other actions.” He said the overall quarter was solid, noting that the company managed another consecutive quarter of positive comparable sales.
According to Dickson, investments in social media and advertising are paying off, saying Gap has become a “powerful pop culture brand.” He pointed in particular to its newest denim ad featuring Katseye and Kelis’s 2003 hit “Milkshake,” calling it one of the most iconic brand campaigns in the company’s history that is seeing viral success on platforms like TikTok.
He also said the “unmute button” has been the highest point of engagement on the company’s website, which he said means consumers are “connecting music with fashion.”
Dickson highlighted improvement in Banana Republic, which had long been a laggard for the company. The quarter saw the brand’s comparable sales rise 4%, far ahead of expectations of 0.2%, according to StreetAccount. Dickson called Banana Republic “a sleeper in our portfolio.”
“We’ve tightened up our assortment, we’ve refined our product esthetic, we’ve enhanced our marketing campaigns, we’ve improved our service levels, we’ve worked on fit and function,” he said. “We found the right price value equilibrium to drive consistency.”
