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  • Gap's $100 Million Tariff Hit 🚨

Gap's $100 Million Tariff Hit 🚨

Plus, Ulta Beauty's strong outlook.

May 30, 2025

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Gap's $100 Million Tariff Hit 🚨

Despite posting good financial earnings results on Thursday, clothing and accessories retailer Gap $GAP ( â–Ľ 20.18% ) plunged 14.85% in after-hours trading due to a tariff warning.

Financials: Gap reported earnings of 51 cents per share and revenue of $3.5 billion in the past quarter. Both were better than expected.

Powering the Story: On Thursday, Gap warned that the new Trump tariffs could cost the company $250 million to $300 million this year.

  • The good news is that Gap has strategies to mitigate more than half that amount.

  • The bad news is that Gap still expects a tariff hit of $100 million to $150 million this year. Ouch.

Early Bird’s Nest Egg Gains: Tariffs are financially straining for Gap because they increase the cost of imported goods, squeeze profit margins, divert capital from growth, and create supply chain uncertainty.

  • Retailers like Gap are especially vulnerable to tariffs because they import a lot of merchandise and already have tight margins.

Final Thoughts: Gap’s stock was up 18% this year. These results are destroying almost all of that.

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Notables

Notable Earnings Today: Shoe Carnival (Nasdaq: SCVL), Canopy Growth (Nasdaq: CGC), UP Fintech Holding (Nasdaq: TIGR), Yatra Online (Nasdaq: YTRA).

Notable IPOs Today: Helio Corporation (NYSE American: HLEO).

Notable Equity Crowdfunding Campaigns Ending Today: Autopilot (PicMii), RYSE (Republic), Avadain (Netcapital).

Notable Economic Events Today: Core PCE Price Index / PCE Price Index (8:30 a.m. ET), Goods Trade Balance (8:30 a.m. ET), Retail Inventories Excluding Auto (8:30 a.m. ET), Personal Spending (8:30 a.m. ET), Chicago PMI (9:45 a.m. ET), Michigan Consumer Sentiment / Expectations (10:00 a.m. ET). 

Ulta Beauty's Strong Outlook

Ulta Beauty $ULTA ( â–˛ 11.78% ) jumped 8.35% in after-hours trading on Thursday after posting strong financial earnings results.

Financials: Ulta Beauty reported earnings of $6.70 per share and revenue of $2.8 billion in the past quarter. Both were better than expected.

Powering the Story: The company also raised its financial outlook for the current year. Ulta Beauty now expects sales to grow by up to 1.5% instead of just 1%. It also increased its projected earnings per share for the year.

Final Thoughts: These results indicate that Ulta Beauty is optimistic about the current environment. This is reassuring to investors.

Costco Slips Amid Mixed Results

Retail giant Costco Wholesale $COST ( â–˛ 3.12% ) posted mixed financial earnings results on Thursday, and the stock dipped 0.37% in after-hours trading.

Financials: Costco reported earnings of $4.28 per share in the past quarter, which were better than expected. The revenue for the quarter was $63.2 billion, which was lower than expected.

Details: Comparable store sales grew 8%. Online sales increased 15.7%.

Final Thoughts: Some investors are still concerned about the impact of tariffs on consumer spending.

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.