12:31 PM EDT, 05/30/2025 (MT Newswires) -- (Updates with the latest stock move in the first paragraph and headline.)

Gap (GAP) shares were down nearly 20% in recent Friday trading after the company forecast flat sales for fiscal Q2 and warned that renewed tariffs could cut as much as $150 million from its operating income in fiscal 2025.

The company reported late Thursday fiscal Q1 net income of $0.51 per diluted share, up from $0.41 a year earlier.

Analysts polled by FactSet expected $0.44.

Net Sales for the quarter ended May 3 were $3.46 billion, up from $3.39 billion a year earlier. Analysts expected $3.42 billion.

The company is expecting net sales to remain about flat from a year ago for fiscal Q2 and to grow 1% to 2% for fiscal 2025.

Gap also said the fiscal 2025 outlook does not reflect the potential effect of tariffs, which are currently 30% on most imports from China and 10% from other countries. The company flagged incremental costs of about $250 million to $300 million if the tariffs remain, potentially leading to a $100 million to $150 million net impact to its fiscal 2025 operating income.

Price: 22.47, Change: -5.49, Percent Change: -19.62