How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
In short
Old Navy makes money selling value-priced clothing, mostly in its 1,242 North American stores and online. It is Gap Inc.’s largest brand: $8.66 billion of net sales in FY2025, 56% of the group’s $15.4 billion, with comparable sales up 3%. Gap Inc. does not report Old Navy’s profit; the group earned $816 million of net income.
Stores and online sales in the U.S. Old Navy’s FY2025 net sales were $8,657M, of which $7,952M came from the U.S., $648M from Canada and $57M from other regions. It ended the year with 1,242 North American stores and 19.6 million square feet.
Gap Inc. revenue by fiscal year, FY2021 to FY2025, from the company's filings. Chart: The Business Engineer.
Gap Inc. describes Old Navy as a North American value apparel brand. Sales rose 3.0% in FY2025 and comparable sales 3%, the same pace as in FY2024.
Smaller income streams sit at group level: Barclays pays Gap Inc. a share of revenue from the private-label and co-branded cards, and franchise partners in about 35 countries pay for the licence and buy merchandise. Gap Inc. does not give either figure in dollars.
How Old Navy compares
Within Gap Inc., Old Navy’s $8,657M was more than twice Gap brand’s $3,501M. Banana Republic had $1,916M and Athleta $1,219M.
Against its own history, Old Navy sold $9,082M in FY2021, so FY2025 sales were still 4.7% lower.
Comparable sales grew 3% at Old Navy, against 6% at Gap, 3% at Banana Republic and a 9% fall at Athleta.
What changed in FY2025
Gap Inc. net sales rose 2% to $15,366M, led by online sales, which grew 4% to $5,981M. Gap Inc. says the increase came mainly from Old Navy and Gap.
Gap Inc. revenue by line, prior year against FY2025, as reported. Chart: The Business Engineer.
Tariffs, net of mitigation, added about 1.2 percentage points to cost of goods as a share of sales. Gross margin slipped to 40.8% from 41.3%; operating income was flat at $1,115M.
Net income fell to $816M from $844M as the effective tax rate rose to 27.9%.
What to watch
Tariffs: about 27% of Gap Inc.’s FY2025 purchases came from Vietnam and 21% from Indonesia. After the Supreme Court ruling of February 2026, new temporary tariffs apply and refunds are uncertain.
Credit card income: Gap Inc. flags proposals to cap card interest rates at 10% as a risk to what it earns from Barclays.
Loyalty: the U.S. programme was rebranded as Encore in early fiscal 2026.
Frequently asked questions
How does Old Navy make money?
By selling value-priced apparel in its stores and online, mostly in the U.S. In FY2025 Old Navy’s net sales were $8,657M, $7,952M of them in the U.S.
How much of Gap Inc. is Old Navy?
56% of net sales in FY2025: $8,657M of $15,366M. Gap Inc. does not disclose profit by brand.
How many Old Navy stores are there?
1,242 in North America at 31 January 2026, down a net 7 during the year, plus franchise locations abroad.
Is Old Navy growing?
Modestly. Net sales rose 3.0% in FY2025 and comparable sales 3%, but sales remain below the $9,082M of FY2021.
Old Navy’s business model revolves around offering fashionable and affordable clothing options for men, women, and children. By providing a variety of trendy styles and an accessible shopping experience through physical stores and e-commerce, Old Navy generates revenue through product sales. The company focuses on key activities such as product design, store operations, and marketing to deliver value to its fashion-conscious and budget-conscious customer segments. With key resources including design teams, physical stores, and a strong brand, Old Navy forms strategic partnerships with suppliers and logistics providers. The cost structure comprises product sourcing, store operations, and marketing expenses.
Value Proposition
Old Navy has established itself as a leading fashion retailer by offering a compelling value proposition that resonates with consumers across demographics. Here’s an in-depth look at the key elements of Old Navy’s value proposition:
Trendy yet Affordable Fashion: Old Navy’s primary value proposition revolves around providing trendy and stylish apparel at affordable prices.
Quality and Durability: Despite its affordable price points, Old Navy maintains a commitment to quality and durability in its clothing.
Wide Range of Sizes and Styles: One of Old Navy’s distinguishing features is its extensive range of sizes and styles, catering to customers of all shapes, sizes, and preferences.
Inclusivity and Diversity: Old Navy prides itself on being an inclusive brand that celebrates diversity.
Sustainability and Ethical Sourcing: As sustainability becomes increasingly important to consumers, Old Navy has incorporated eco-friendly materials and ethical sourcing practices into its value proposition.
Revenue Model
Old Navy’s revenue model is built around multiple streams, ensuring financial stability and growth. Here’s a breakdown of its revenue sources:
Apparel Sales: The primary revenue driver for Old Navy is the sale of apparel, including clothing, footwear, and accessories, both in-store and online.
E-commerce Platform: With the growing trend of online shopping, Old Navy generates a significant portion of its revenue through its e-commerce platform.
Third-party Retailers: Old Navy partners with third-party retailers and department stores to expand its reach and accessibility.
Licensing Agreements: The brand may also earn revenue through licensing agreements, collaborations, and partnerships with other brands or designers.
Marketing Strategy
Old Navy employs a multi-channel marketing strategy to promote its brand and products to consumers. Here’s how it leverages various marketing channels:
Traditional Marketing: Old Navy utilizes traditional marketing channels such as television, print, and outdoor advertising to reach a broad audience and drive brand awareness.
Digital Marketing: The brand invests in digital marketing initiatives, including social media advertising, email marketing, and influencer partnerships, to engage with its target demographic and drive online sales.
Promotions and Discounts: Old Navy frequently offers promotions, discounts, and loyalty programs to incentivize repeat purchases and encourage customer loyalty.
Brand Messaging: The brand’s marketing efforts emphasize its value proposition of trendy and affordable fashion, diverse product offerings, and inclusive brand messaging.
Distribution Channels
Old Navy’s distributionstrategy is designed to maximize reach and accessibility for consumers. Here’s how the brand distributes its products:
Retail Stores: Old Navy operates a network of retail stores located in malls, shopping centers, and standalone locations across the United States and internationally.
E-commerce Platform: The brand maintains a robust e-commerce platform, allowing customers to shop for its products online and have them delivered directly to their doorstep.
Third-party Retailers: Old Navy partners with third-party retailers and department stores to expand its reach and accessibility, reaching customers who prefer to shop at other retail outlets.
In summary, Old Navy’s value proposition, revenue model, marketingstrategy, and distribution channel โ as explored in how AI is restructuring the traditional value chain โ s work together to position the brand as a leading fashion retailer that offers trendy, affordable, and inclusive clothing options for the whole family. With a focus on quality, sustainability, and accessibility, Old Navy continues to resonate with consumers and drive growth in the competitive retail landscape.
Organizational Structure:
Old Navy’s organizational structure is designed to efficiently manage its operations and deliver on its business model. It typically follows a hierarchical structure with clear lines of authority and responsibility:
Executive Leadership Team: At the top of the hierarchy is the executive leadership team, including the CEO, Chief Merchandising Officer, Chief Marketing Officer, Chief Operating Officer, and other key executives. They set the strategic direction for the company and make high-level decisions.
Functional Departments:
Merchandising and Design: This department is responsible for product design, development, and sourcing. It works closely with suppliers to create fashionable and affordable clothing lines.
Retail Operations: Managing and overseeing the physical stores is crucial, ensuring they are well-maintained and provide a seamless shopping experience.
E-commerce and Technology: This department focuses on the online shopping platform, ensuring it’s user-friendly, efficient, and secure.
Marketing and Advertising: Responsible for promoting Old Navy’s products and brand through various channels, including digital marketing, advertising campaigns, and social media.
Finance and Accounting: Handles financial planning, budgeting, accounting, and financial reporting.
Human Resources: Manages employee recruitment, training, development, and ensures compliance with labor laws and company policies.
Supply Chain and Logistics: Coordinates the efficient movement of products from suppliers to stores and customers, optimizing the supply chain.
Regional or Store-Level Management: Old Navy may have regional managers or store managers responsible for individual stores or groups of stores. They oversee day-to-day operations at the local level, including staffing, inventory management, and customer service.
Employees: At the base of the hierarchy are the store employees, including sales associates, customer service representatives, and other staff members who interact directly with customers.
Leadership Style:
Old Navy’s leadership style is likely a combination of various leadership approaches, with an emphasis on certain key principles:
Customer-Centric: Given the customer-focused nature of the retail industry, Old Navy’s leadership prioritizes understanding and meeting customer needs and expectations. This involves actively seeking customer feedback and adjusting strategies accordingly.
Innovation and Adaptability: The company’s leadership encourages innovation in product design, store operations, and marketing to stay current with fashion trends and adapt to changing market conditions.
Collaborative: Old Navy’s leadership style likely promotes collaboration among different functional areas, such as merchandising, design, and marketing, to ensure a cohesive and appealing product offering.
Results-Oriented: While maintaining a customer-centric approach, Old Navy’s leaders are also results-driven, setting and monitoring performance metrics to ensure the company’s financial success.
Employee Development: Leaders in the organization likely invest in employee development and empowerment, recognizing that motivated and well-trained staff are essential to delivering a positive customer experience.
Ethical and Responsible: Old Navy, as part of a larger corporation, is likely committed to ethical and responsible business practices. Its leadership likely emphasizes sustainability, fair labor practices, and corporate social responsibility.
Key Business Model Elements
Fashionable and Affordable Clothing: Old Navy’s primary offering is stylish and cost-effective clothing for men, women, and children. This combination caters to fashion-conscious customers who are also budget-conscious.
Product Variety and Trends: The company provides a diverse range of trendy clothing options, staying updated with the latest fashion trends to attract a wide customer base.
Multi-Channel Shopping Experience: Old Navy operates both physical stores and an e-commerce platform, offering customers convenient options to purchase its products.
Revenue Generation: The primary source of revenue for Old Navy comes from the sale of its clothing products.
Key Activities:
Product Design: Old Navy focuses on designing fashionable and attractive clothing lines.
Store Operations: Managing and operating physical stores and ensuring a seamless shopping experience.
Marketing: Promoting its products and brand through various marketing channels.
Customer Segments:
Fashion-Conscious: Old Navy targets customers who value stylish clothing.
Budget-Conscious: The affordability of the clothing appeals to customers looking for good deals.
Key Resources:
Design Teams: Dedicated teams responsible for creating trendy and appealing clothing lines.
Physical Stores: Retail locations where customers can shop in person.
Strong Brand: Old Navy leverages its recognizable brand to attract customers.
Strategic Partnerships:
Old Navy collaborates with suppliers to source clothing products efficiently.
Logistics providers help ensure timely and cost-effective distribution.
Cost Structure:
Product Sourcing: Costs associated with acquiring clothing items from suppliers.
Store Operations: Expenses related to maintaining and operating physical stores.
Marketing Expenses: Costs for promotional activities and brand building.
How AI Is Changing This
Old Navy is leveraging AI to transform its inventory management and demand forecasting, fundamentally shifting from reactive to predictive retail operations. The company has implemented machine learning algorithms that analyze vast datasets including historical sales patterns, weather forecasts, social media trends, and local demographic information to predict demand with unprecedented accuracy. For example, Old Navy’s AI system can anticipate that a specific fleece hoodie style will see increased demand in Minneapolis stores two weeks before a projected cold snap, while simultaneously reducing inventory of the same item in Phoenix locations. This predictive capability allows Old Navy to optimize inventory allocation across its 1,200+ stores, reducing overstock situations by up to 20% while minimizing stockouts of popular items. The AI-driven approach has enabled the retailer to move away from traditional seasonal bulk ordering toward dynamic, data-driven inventory decisions that respond to real-time market conditions and regional preferences.
Slow fashion is a movement in contraposition with fast fashion. Where in fast fashion, it’s all about speed from design to manufacturing and distribution, in slow fashion, quality and sustainability of the supply chain are the key elements.
Patagonia is an American clothing retailer founded by climbing enthusiast Yvon Chouinard in 1973 who saw initial success by selling reusable climbing pitons and Scottish rugby shirts. Over time Patagonia also became a fashionable brand also for its focus on slow fashion. Indeed, the company sells high-priced clothing items built to last which it will repair for free.
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
Fash fashion has been a phenomenon that became popular in the late 1990s and early 2000s, as players like Zara and H&M took over the fashion industry by leveraging on shorter and shorter design-manufacturing-distribution cycles. Reducing these cycles from months to a few weeks. With just-in-time logistics and flagship stores in iconic places in the largest cities in the world, these brands offered cheap, fashionable clothes and a wide variety of designs.
With over โฌ27 billion in sales in 2021, the Spanish Fast Fashion Empire, Inditex, which comprises eight sister brands, has grown thanks to a strategy of expanding its flagship stores in exclusive locations around the globe. Its largest brand, Zara, contributed over 70% of the group’s revenue. The country that contributed the most to the fast fashion Empire sales was Spain, with over 15% of its revenues.
LVMH is a global luxury empire with over โฌ79 billion ($83 billion) in revenues for 2022, spanning several industries: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry, and selective retailing. It comprises brands like Louis Vuitton, Christian Dior Couture, Fendi, Loro Piana, and many others.
Kering Group follows a multi-brand business model strategy. The central holding helps the brands and Houses part of its portfolio leverage economies of scale while creating synergies. At the same time, those brands are run independently. Kering is today a global luxury brand that made over โฌ20 billion in revenue based on this multi-brand strategy. Within Kering Group are brands like Gucci, Bottega Veneta, Saint Laurent, and many moreโthe primary operating segments based on luxury and lifestyle.
Kering is a luxury goods multinational founded in France by Franรงois Pinault in 1963. The company, which initially specialized in timber trading, grew via acquisitions and was listed on the Paris Stock Exchange in 1988. Two years later, Kering merged with a French conglomerate interested in furniture, department stores, and bookstores.
The Ultra Fashion business model is an evolution of fast fashion with a strong online twist. Indeed, where the fast-fashion retailer invests massively in logistics and warehousing, its costs are still skewed toward operating physical retail stores. While the ultra-fast fashion retailer mainly moves its operations online, thus focusing its cost centers on logistics, warehousing, and a mobile-based digital presence.
ASOS is a British online fashion retailer founded in 2000 by Nick Robertson, Andrew Regan, Quentin Griffiths, and Deborah Thorpe. As an online fashion retailer, ASOS makes money by purchasing clothes from wholesalers and then selling them for a profit. This includes the sale of private label or own-brand products. ASOS further expanded on the fast fashion business model to create an ultra-fast fashion model driven by short sales cycles and online mobile e-commerce as the main drivers.
Real-time retail involves the instantaneous collection, analysis, and distribution of data to give consumers an integrated and personalized shopping experience. This represents a strong new trend, as a further evolution of fast fashion first (who turned the design into manufacturing in a few weeks), ultra-fast fashion later (which further shortened the cycle of design-manufacturing). Real-time retail turns fashion trends into clothes collections in a few days or a maximum of one week.
SHEIN is an international B2C fast fashion eCommerce platform founded in 2008 by Chris Xu. The company improved the ultra-fast fashion model by leveraging real-time retail, quickly turning fashion trends in clothes collections through its strong digital presence and successful branding campaigns.
Zara is a brand part of the retail empire Inditex. Zara is the leading brand in what has been defined as “fast fashion.” With almost โฌ20 billion in sales in 2021 (comprising Zara Home) and an integrated retail format with quick sales cycles. Zara follows an integrated retail format where customers are free to move from physical to digital experience.
Wish is a mobile-first e-commerce platform in which users’ experience is based on discovery and customized product feed. Wish makes money from merchants’ fees and advertising on the platform, and logistic services. The mobile platform also leverages an asset-light business model based on a positive cash conversion cycle where users pay in advance as they order goods, and merchants are paid in weeks.
Poshmark is a social commerce mobile platform that combines social media capabilities with its e-commerce platform to enable transactions. It makes money with a simple model, where for each sale, Poshmark takes a 20% fee on the final price for sales of $15 and over and a flat rate of $2.95 for sales below that. Its gamification elements and the tools offered to sellers are critical to the company’s growth as a mobile-first platform.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur, HackerNoon and Search Engine People. Find him on LinkedIn and Substack. See how we source.
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