Tariffs are slamming Gap.
Gap said Thursday that if President Donald Trump’s 30% tariffs on China and 10% duties on most imports from other countries remain at current levels, it could cost the company $100 million to $150 million this year.
Gap (GAP) stock plunged 15% during after hours trading Thursday.
Developments around Trump’s tariffs are in flux, making it difficult for businesses to plan. A federal appeals court on Thursday paused the previous night’s ruling from the Court of International Trade that blocked many of Trump’s tariffs.
Tariffs have clouded a strong comeback at Gap, which also owns Old Navy, Banana Republic and Athleta. The company’s sales at stores open for at least a year increased 2% last quarter, the fifth consecutive quarter.
In an interview with CNBC, Gap CEO Richard Dickson said that Gap will not raise prices significantly from tariffs.
“Based on what we know today, we do not expect there to be meaningful price increases or impact to our consumer,” he said.
Other brands have said they will raise prices on some items in response to tariffs.
“We are not just broadly increasing price,” Macy’s CEO Tony Spring said on an earnings call with analysts Wednesday. “We’re making selective price increases in selective brands, selective categories, because we believe the value equation for the customer is still very relevant.”
Walmart, Home Depot, Target and other retailers also have said they will increase prices to mitigate the impact of tariffs.
Update: This story and headline has been updated to reflect the net impact of the Gap’s tariffs costs.
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