Despite growing concerns over fallout from the Trump administration’s trade barriers, Gap Inc. on Thursday joined other retailers in reporting profit growth for the most recent three-month earnings period.
Revenue at the San Francisco-based apparel chain grew 7.5 percent to $4.09 billion for the quarter that ended on June 30. Net income rose 6.6 percent to $297 million.
“Our balanced growth strategy supports continued growth and improved profitability, and our investments are focused on leveraging the advantages of our scaled operating platform and accelerating the impact of our significant data assets,” Chief Executive Officer Art Peck said in a statement.
A number of U.S. businesses have expressed concern that the Trump administration’s escalating trade war with China, as well as disputes with with U.S. allies like the European Union, Canada and Mexico, will curb profits for retailers and manufacturers. Tariffs of 25 percent on steel and 10 percent on aluminum are forcing companies like Caterpillar to raise prices.
The White House finalized tariffs Thursday on an additional $16 billion in Chinese goods, bringing the total amount of imports subject to levies to $50 billion. Trump has threatened to increase that figure to as much as $500 billion, and his administration is currently weighing a 25 percent tariff on an additional $200 billion in products from the country.
Retailers like Kohl’s previously said they are bracing for higher costs from those additional levies, which would directly impact the apparel sector, might bring.
