The Gap, Inc. (GAP)
Profitability ratios
Return on sales
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 41.28% | 38.79% | 34.32% | 39.81% | 34.09% |
| Operating profit margin | 7.37% | 3.76% | -0.44% | 4.86% | -6.25% |
| Pretax margin | 7.54% | 3.73% | -0.89% | 1.94% | -7.99% |
| Net profit margin | 5.59% | 3.37% | -1.29% | 1.54% | -4.82% |
The Gap, Inc.'s profitability ratios have shown some fluctuations over the past five years.
1. Gross Profit Margin has improved from 34.09% in January 30, 2021, to 41.28% in February 1, 2025. This indicates an enhancement in the company's ability to generate revenue after accounting for the cost of goods sold.
2. Operating Profit Margin has shown a positive trend, with a significant improvement from -6.25% in January 30, 2021, to 7.37% in February 1, 2025. This suggests that the company is managing its operating expenses more effectively to increase its profitability.
3. Pretax Margin has also witnessed growth, moving from -7.99% in January 30, 2021, to 7.54% in February 1, 2025. This signifies better control over non-operating expenses, leading to increased earnings before taxes.
4. Net Profit Margin has shown consistent improvement, from -4.82% in January 30, 2021, to 5.59% in February 1, 2025. This indicates that the company is becoming more efficient in managing its overall expenses and generating higher profits after accounting for all costs.
Overall, The Gap, Inc. has displayed positive trends in its profitability ratios over the analyzed period, showcasing improvements in its financial health and operational efficiency.
Return on investment
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.36% | 5.07% | -0.61% | 6.35% | -6.26% |
| Return on assets (ROA) | 7.10% | 4.55% | -1.77% | 2.01% | -4.83% |
| Return on total capital | 25.75% | 15.82% | -1.37% | 11.65% | -18.84% |
| Return on equity (ROE) | 25.86% | 19.34% | -9.05% | 9.40% | -25.44% |
The profitability ratios of The Gap, Inc. show fluctuations over the years as follows:
1. Operating return on assets (Operating ROA) has varied from a negative figure of -6.26% on January 30, 2021, to a positive 9.36% on February 1, 2025, indicating an improvement in the company's operational efficiency and profitability.
2. Return on assets (ROA) started at -4.83% on January 30, 2021, but has shown a positive trend, reaching 7.10% on February 1, 2025, reflecting an increase in the company's overall profitability relative to its asset base.
3. Return on total capital has experienced significant changes, starting at a negative -18.84% on January 30, 2021, and reaching a high of 25.75% on February 1, 2025. This suggests that the company has been able to generate higher returns on its total capital employed in recent years.
4. Return on equity (ROE) has exhibited a similar trend, moving from a negative -25.44% on January 30, 2021, to a positive 25.86% on February 1, 2025. This indicates an improvement in the company's ability to generate profits for its shareholders with their investments.
Overall, The Gap, Inc. has shown positive advancements in its profitability ratios over the years, signaling enhanced operational efficiency, increased profitability, and improved returns for its investors.