Gap anticipates that the benefits of tariff reductions will begin to be realized next year.

Gap Inc. anticipates significant benefits from its tariff mitigation strategies starting in Q2 of the next fiscal year, as stated by CFO Katrina O’Connell. Improvements will largely stem from sourcing and production adjustments, along with selective price increases. Despite a 5% rise in inventory due to tariffs, Gap maintains a positive outlook for the holiday season, bolstered by a 3% increase in net sales in Q3 and a 30% boost in supply chain productivity thanks to AI and automation enhancements. The company expects tariff impacts to stabilize over the next two quarters.