Raphael Stevens

The de minimis exemption, which allowed shipments valued under $800 to enter the country duty free, came to an end globally on Friday.
The provision had been slated to end in July of 2027 but an executive order from President Trump eliminated it much sooner, giving businesses, customs officials and postal services less time to prepare.
Companies big and small have used the exemption to save money on digital fulfillment, and the change could lead to higher prices.
Small business owners on Etsy, eBay and Shopify, for example, relied on the provision to support their marketplace businesses.

The de minimis exemption, an obscure trade law provision that has simultaneously fueled and eroded businesses across the globe, officially came to an end on Friday following an executive order by President Donald Trump. 
For nearly a decade, shipments valued under $800 were allowed to enter the country virtually duty free and with less oversight. Now, those shipments from the likes of Tapestry, Lululemon and just about any other retailer with an online presence will be tariffed and processed in the same way that larger packages are handled. 

In May, Trump ended the exemption for goods coming from China and Hong Kong, and on July 30 he expanded the rollback to all countries, calling it a “catastrophic loophole” that’s been used to evade tariffs and get “unsafe or below-market” products into the U.S. 
The de minimis exemption had previously been slated to end in July 2027 as part of sweeping legislation passed by Congress, but Trump’s executive order eliminated the provision much sooner, giving businesses, customs officials and postal services less time to prepare.
“The ending of that under-$800-per-person-per-day rule, from a global perspective, is about to probably cause a bit of pandemonium,” said Lynlee Brown, a partner in the global trade division at accounting firm EY. “There’s a financial implication, there’s an operational implication, and then there’s pure compliance, right? Like, these have all been informal entries. No one’s really looked at them.”
Already, the sudden change has snarled supply chains from France to Singapore and led post offices across the world to temporarily suspend shipments to the U.S. so they can ensure their systems are updated and able to comply with the new regulations. 
It’s forced businesses both large and small to rethink not just their supply chains, but their overall business models, because of the impact the change could have on their bottom lines – setting off a panic in board rooms across the country, logistics experts said. 

“Obviously it’s a big change for operating models for companies, not just the Sheins and the Temus, but for companies that have historically had e-com and brick-and-mortar stores,” Brown said.
The change also means consumers, already are under pressure from persistent inflation and high interest rates, could now see even higher prices on a wide range of goods, from Colombian bathing suits to specialty ramen subscription boxes shipped straight from Japan. 
The end of de minimis could cost U.S. consumers at least $10.9 billion, or $136 per family, according to a 2025 paper by Pablo Fajgelbaum and Amit Khandelwal for the National Bureau of Economic Research. The research found low-income and minority consumers would feeling the biggest impact as they rely more on the cheaper, imported purchases.

Tailoring supply chains

Popularized by Chinese e-tailers Shein and Temu, use of the de minimis exemption has exploded in the last decade, ballooning from 134 million shipments in 2015 to over 1.36 billion in 2024. Prior to the recent change to limit its use, U.S. Customs and Border Protection said it was processing over 4 million de minimis shipments into the country each day. 
A 2023 House report found more than 60% of de minimis shipments in 2021 came from China, but because the packages require less information than larger containers, very little information is known about their origins and the types of goods they contain. That opacity is one of the key reasons why both former President Joe Biden and Trump sought to curtail or end the exemption. 
Both administrations have said the exemption was overused and abused and that it’s made it difficult for CBP officials to target and block illegal or unsafe shipments coming into the U.S. because the packages aren’t subject to the same level of scrutiny as larger containers. 
“We didn’t have any compliance information … on those shipments, and then that is where the danger of drugs and whatnot being in those shipments” comes in, said Irina Vaysfeld, a principal in KPMG’s trade and customs practice.
The Biden administration particularly focused on how the exemption allowed goods made with forced labor to make it into the country in violation of the Uyghur Forced Labor Protection Act. Meanwhile, Trump has said the exemption has been used to ship fentanyl and other synthetic opioids into the U.S. In a fact sheet published on July 30, the White House said 90% of all cargo seizures in fiscal 2024, including 98% of narcotics seizures and 97% of intellectual property rights seizures, originated as de minimis shipments.
Across the globe, it’s common for countries to allow low-value shipments to be imported duty-free as a means to streamline and facilitate global trade, but typically, it’s for packages valued around $200, not $800, said EY’s Brown.
Until 2016, the U.S.’s threshold for low-value shipments was also $200, but it was changed to $800 when Congress passed the Trade Facilitation and Trade Enforcement Act, which sought to benefit businesses, U.S. consumers and the overall U.S. economy, according to the Congressional Research Service. It said higher thresholds provide a “significant economic benefit” to both business and shoppers and thus, the overall economy. 
While well-intentioned, the law came with unintended consequences, said Brown. 
The “rise in value, from $200 to $800, just made it kind of like a free for all to say, OK, everything come in,” she said. 
Eventually companies designed supply chains around the exemption: They set up bonded warehouses, where duties can be deferred prior to export, in places like Canada and Mexico and then imported goods in bulk to those regions before sending them across the border one by one, duty free, as customer orders rolled in, said Brown.
“Companies have really laid out their supply chain in a very specific way [around de minimis] and that’s really the crux of the issue,” said KPMG’s Vaysfeld. “The way that the supply chain has been laid out now may need to change.” 

The impact on the retail industry 

Until the rise of Shein and Temu, the de minimis exemption was rarely discussed in retail circles. Soon, the e-commerce behemoths began facing widespread criticism for their use of what many called a loophole.
In 2023, the House Select Committee on the Chinese Communist Party released a report on Shein and Temu and said the two companies were “likely responsible for more than 30 percent of all packages shipped to the United States daily under the de minimis provision, and likely nearly half of all de minimis shipments to the U.S. from China.”
The revelation sparked widespread consternation among retail executives, lobbyists and government officials who said the companies’ use of the exemption was unfair competition. 
However, behind closed doors, companies large and small began mimicking the same model after realizing how it could reduce the steep costs that come along with selling goods online. 
Direct-to-consumer companies that only have online presences have relied on it more heavily, so much so that their businesses may not work without it, said Vaysfeld.
“Some of the companies we’ve spoken to, they’ve modeled out, if the tariffs continue for one year, for two years, how does that impact their profitability, and they know how long they can last,” said Vaysfeld. “These aren’t the huge companies, right? These are the smaller companies … Depending on what country they’re sourcing from or where they’re manufacturing, it could really impact their profitability that they can’t stay in business for the long term.”
While smaller, digital companies are more exposed, “pretty much most companies that you can think of” had been using the exemption in some form before it ended, said Vaysfeld. 
Take Coach and Kate Spade’s parent company Tapestry: About 13% to 14% of the company’s sales were previously covered under de minimis and will now be subject to a 30% tariff, according to an estimate by equity research firm Barclays.
On the company’s earnings call earlier this month, Chief Financial Officer Scott Roe said tariffs will hit its profits by a total of $160 million this year, including the impact of the end of de minimis. That amounts to about 2.3% of margin headwind, he said. 
Shares of the company fell nearly 16% the day that Tapestry reported the profit hit.
In a statement, Roe said Tapestry used de minimis to help support its strong online business, adding it is a practice that “many companies with sophisticated supply chains have been doing for years.”
To help offset its termination, he said Tapestry is looking for ways to reduce costs and is leaning on its manufacturing footprint across many different countries.
Canadian retailer Lululemon is another company that uses de minimis, according to Wells Fargo. Last week, the bank cut its price target on the company’s stock from $225 to $205, citing the end of de minimis. In the note, Wells Fargo analyst Ike Boruchow said the equity research firm sees a potential 90 cent to $1.10 headwind to Lululemon’s earnings per share from the de minimis elimination.
Lululemon declined to comment, citing the company’s quiet period ahead of its reporting earnings.
The National Retail Federation, the industry’s largest trade organization, has not taken a position in favor of or against the exemption. It has members who both supported and opposed the policy, said Jonathan Gold, vice president of supply chain and customs policy at NRF. 
Retailers of all sizes, including independent sellers with digital storefronts, have used the approach as “a convenient way to get products to the consumer” for less, Gold said.
“Their costs are going to go up and those costs could be passed on to the consumer at the end of the day,” Gold said.

Marketplace impact

The most acute impact of the end of de minimis is expected to be felt on online marketplaces where millions of small businesses sell goods like Etsy, eBay and Shopify and used de minimis to defray costs when sending online orders from other parts of the globe to the U.S.
American shoppers have gotten used to buying artwork, coffee mugs, T-shirts and other items from merchants outside the country without paying duties. With that tariff exemption gone, consumers could face higher costs and a more limited selection of items to choose from.
Etsy, eBay and some other retailers sought to defend the loophole prior to its removal, submitting public comments on proposed de minimis regulation by the CBP. An eBay public policy executive said the company was concerned that restrictions to de minimis “would impose significant burdens on American consumers and importers.”
Etsy’s head of public policy, Jeffrey Zubricki, said the artisan marketplace supports “smart U.S. de minimis reform,” but that it was wary of changes that could “disproportionately affect small American sellers.”
“These exemptions are a powerful tool that help small creators, artisans and makers participate in and navigate cross-border trade,” Zubricki wrote in a March letter to CBP.
An Etsy spokesperson declined to comment on the policy change. Etsy CFO Lanny Baker said at a Bernstein conference in May that transactions between U.S. buyers and European sellers comprise about 25% of the company’s gross merchandise sales.
EBay didn’t immediately provide a comment in response to a request from CNBC. The company warned in its latest earnings report that the end of de minimis outside of China could impact its guidance, though CEO Jamie Iannone told CNBC in July that he believes eBay is generally “well suited” to navigate the shifting trade environment.
Some eBay and Etsy sellers based in the UK, Canada and other countries are temporarily closing off their businesses to the U.S. as they work out a plan to navigate the higher tariffs. Blair Nadeau, who owns a Canadian bridal accessories company, was forced to take that step this week.
“This is devastating on so many levels and millions of small businesses worldwide are now having their careers, passions and livelihoods threatened,” Nadeau wrote in an Instagram post on Tuesday. “Just this past hour I have had to turn away two U.S. customers and it broke my heart.”
Nadeau sells her bespoke wedding veils, jewelry and hair adornments through her own website and on Etsy, where 70% of her customer base is in the U.S. The de minimis provision had been a “lifeline” for many Canadian businesses to get their products in the hands of American consumers, Nadeau said in an interview.
“This is really hitting me,” Nadeau said. “It’s like all of a sudden 70% of your salary has been removed overnight.”
In the absence of de minimis, online merchants are faced with either paying import charges upfront and potentially passing those costs on to shoppers through price hikes, or shipping products “delivery duty unpaid,” in which case it’s the customer’s responsibility to pay any duties upon arrival.
Alexandra Birchmore, an artist based in the Cotswolds region of England, said she expects to raise the price of her oil paintings on Etsy by 10% as a result of paying the duties upfront.
“At the moment every small business forum I am on is in chaos about this,” Birchmore said. “It looks to me to be a disaster where no one benefits.”

Market share shifts

The disruption could end up being a boon for the likes of Amazon and Walmart. U.S. consumers may turn to major retailers if they face steeper prices elsewhere, as well as potential shipping delays due to backlogs or other issues at the border.
Amazon, in particular, has already proven resilient after the U.S. axed the de minimis provision for shipments from China and Hong Kong in May. The company’s sales increased 13% in the three-month period that ended June 30, compared with 10% growth in the prior quarter. Amazon’s unit sales grew 12%, an acceleration from the first quarter.
Both Amazon and Walmart have fulfillment operations in the U.S. that allow overseas businesses to ship items in bulk and store them in the companies’ warehouses before they’re dispatched to shoppers. Shein and Temu largely eschewed the model in the past in favor of the de minimis exception, but they’ve since moved to open more warehouses in the U.S. in the wake of rising tariffs.
Since the exemption ended on Chinese imports in May, the impact on Shein and Temu has been swift. Temu was forced to change its business model in the U.S. and stop shipping products to American consumers from Chinese factories. 
The end of de minimis, as well as Trump’s new tariffs on Chinese imports, also forced Temu to raise prices, reign in its aggressive online advertising push and adjust which goods were available to American shoppers. 
The Financial Times reported on Tuesday that Temu has resumed shipping goods to the U.S. from Chinese factories and will also increase its advertising spend following what it called a “truce” between Washington and Beijing. 
Temu didn’t return a request for comment. 
Meanwhile, Shein has been forced to raise prices and daily active users on both platforms in the U.S. have fallen since the de minimis loophole was closed, CNBC previously reported. Temu’s U.S. daily active users plunged 52% in May versus March, while Shein’s were down 25%, according to data shared with CNBC by market intelligence firm Sensor Tower. More

Deep-pocketed buyers are clamoring for ranches with massive acreage and private fishing.
At the same time, one-of-a-kind ranches are hitting the market for the first time in decades or even generations as families choose to cash out.
Premium ranch brokers told CNBC why these legacy ranches command top dollar and what buyers should know.

Owned by the same family for more than 116 years, Reynolds Ranch is now on the market for $30.7 million.
Courtesy of California Outdoor Properties

For more than 116 years, Deanna Davis’ family has owned Reynolds Ranch, spanning 7,600 acres in California’s Central Coast region. With the heirs in disagreement over the homestead’s future, Reynolds Ranch is now on the market for $30.7 million.
“It’s so hard to make decisions together as a family about the ranch,” she told CNBC. “If I had the cash, I would buy the whole thing right now and cash everybody out and start over and take the title in a LLC.”

It’s a common predicament for family trees that have too many branches, said Davis, who runs the ranch. Her mother, who died last December, was the last family member who grew up on Reynolds Ranch. Now the family is scattered across the country and some of her relatives live overseas. Some family members who can only visit once or twice a year would rather cash out.
Families like Davis’ are increasingly choosing to sell these long-held properties, high-end ranch brokers told CNBC.
The legacy properties are in big demand — even if not at pandemic highs — as deep-pocketed buyers crave wide open skies and a slower pace of life. The so-called “Yellowstone” effect remains in full force, with fans of the Paramount show seeking sprawling properties in Montana, Wyoming, Colorado and other Western states.
“All I know is whoever buys this property, when they sit on the porch in the afternoon, sipping their margarita or iced tea, they will think they landed in paradise,” Davis said.

‘Nothing quite like it’

Ranch brokerage Live Water Properties currently has $700 million in listing inventory, up from under $200 million in May 2024, according to Jackson Hole, Wyoming, broker Latham Jenkins. Many of these properties are legacy ranches that are on the market for the first time in generations, he said.

One such listing is Antlers Ranch in Meeteetse, Wyoming, which spans 40,000 acres — nearly three times the size of Manhattan — and is priced at $85 million. Antlers Ranch is on the market for the first time in five generations.
“Large historic properties are less common as many have been broken up and sold off,” Jenkins said. “Those that remain are highly desirable.”
These legacy ranches can demand a premium for reasons other than acreage, he said. Many historic ranches, like another one of his listings, Red Hills Ranch, a 190-acre property asking for $65 million, are surrounded by public lands that cannot be developed. Buyers are drawn to that privacy, as well as the ability to hike and fish nearby and see wildlife up close.

Red Hills Ranch, 25 miles outside Jackson WY, spans 190 acres and is listed for $65 million. Nestled in the Bridger-Teton National Forest, Red Hills Ranch was formerly the private guest ranch of late senator Herb Kohl.
Courtesy of Live Water Properties

“When you sit next to a running river, watching sunrises and sunsets, seeing an elk calf be born, there’s nothing quite like it,” Jenkins said.
Families usually come to him when the next generation has little interest in taking over the ranch or the heirs can’t come to an agreement. He described it as “bittersweet” when these one-of-a-kind properties become available for the first time in generations.
“That’s the thing with real estate. The land is perpetual, but the ownership is not,” he said.
Bill McDavid, a broker at Hall and Hall, represents Rocking Chair Ranch, a 7,200-acre Montana ranch that has been in the same family for more than seven decades.
“The adult children just got to the point where they realized, ‘No, it’s time for this family to move on and do something else,” he said of the sellers behind the property, which is listed at $21.7 million.

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Generational transfer of wealth

As ranching has been on the decline for decades, many multigenerational ranches have already changed hands, according to McDavid, who is based in Missoula, Montana. However, he is also seeing a rise in families looking to sell ranches they bought 20 to 30 years ago. The owners typically don’t have family ties to ranching and decided to buy trophy properties after making their fortune in tech or finance.
“For the buyer who made their money in the dot-com era, they had a grand idea about a family legacy, or whatever,” he said. “And then their kids got older, and they didn’t move to the ranch because nobody ever moved to the ranch. I mean, the dot-com guy, he came out and visited for at most the summer.”
He added of the heirs, “it was never in the cards for them to take over the ranch.”
Davis said she hopes a local ranching family will buy her California property, which has abundant grazing pastures and water sources. However, she said its likely a buyer from Silicon Valley will snap up Reynolds Ranch, which is only an hour and a half drive from San Jose and can accommodate a landing strip for a private plane.
John Onderdonk, who advises on agricultural properties for wealth manager Northern Trust, said the generational transfer of wealth is shaping the market. He is also a fourth-generation cattle rancher and said he is fortunate that his brothers agree on keeping their central California ranch in the family. However, he said many of the families he works with that choose to sell do so because of finances rather than disinterest.
“Real estate is a capital-intensive asset class, and if there isn’t liquidity in the portfolio, and the rest of the family isn’t able to support that, tough decisions come into play,” he said.

Listed at $21.7 million, Rocking Chair Ranch is on the market for the first time in over seven decades. The Philipsburg, MT, ranch spans 7,200 acres.
Courtesy of Hall and Hall

Legacy ranches, which may come with livestock and cropland, are attractive but require much due diligence, according to Ken Mirr of Mirr Ranch Group. For instance, these ranches are usually run by long-tenured managers who might leave when the property is sold and are hard to replace, said the Denver, Colorado-based broker. Or, they stay and have a rough time adjusting to new ownership, Mirr added.
“Those managers who have been here a long time start thinking that they own the place, right?” he said. “Sometimes that’s not the best person to be managing the ranch.”
Buyers expecting complete privacy can get a rude awakening. For instance, Mirr said, the previous family could have a longstanding verbal agreement with a neighbor allowing them to cross through their property. Depending on the state, members of the public may also be fish or wade in rivers located on private property, he said.
McDavid said buyers with deep pockets can have unrealistic expectations, wanting a rural property without sacrificing convenience. For instance, many want to live within 30 minutes’ driving distance of a major airport. Buyers also prefer move-in-ready properties, and multigenerational ranches may lack modern amenities.
As for the sellers, they get a windfall but aren’t able to replicate the lifestyle that comes with a legacy ranch.
“It’s just kind of a unique thing when you’re sitting on your porch and you look around and you own everything as far as your eyes can see,” Davis said. “It’s extremely difficult, the concept of losing the place, but on the other hand it’s going to make the next family very happy.” More

Ulta Beauty on Thursday raised its full-year forecast, after reporting growth in all major categories and topping Wall Street’s quarterly sales expectations.
Beauty has remained a hot category for consumers, even as they pull back or watch their spending in other discretionary categories.
Ulta expects comparable sales to grow between 2.5% to 3.5% for the full year, up from prior projections of as much as 1.5%.

People walk past an Ulta Beauty store in the Manhattan borough of New York City on March 8, 2022.
Carlo Allegri | Reuters

Ulta Beauty on Thursday raised its full-year forecast, after reporting growth in all major categories and topping Wall Street’s quarterly sales expectations.
The beauty retailer said it expects net sales of between $12 billion and $12.1 billion, up from its previous range of $11.5 billion and $11.7 billion, representing an increase from last fiscal year’s net sales of $11.3 billion. It expects earnings per share of $23.85 to $24.30, up from its previous range of $22.65 to $23.20.

It expects comparable sales, a metric that takes out one-time factors like store openings and closures, to grow between 2.5% to 3.5%, up from projections of as much as 1.5%. The company had raised its annual profit forecast and the upper end of its full year sales range in May.
In the company’s news release, CEO Kecia Steelman said its outlook for the year “reflects both the strength of our year-to-date performance and our caution around how consumer demand may evolve in the second half of the year.”
Shares of Ulta gained about 3% in extended trading, after earlier hitting a 52-week during the regular session.
Here’s what the company reported for the fiscal second quarter compared with what Wall Street expected, according to LSEG:

Earnings per share: $5.78. It was not immediately clear if that was comparable to the $5.08 expected by analysts.
Revenue: $2.79 billion vs. $2.67 billion expected

In the three-month period that ended August 2, Ulta’s net income rose to $260.88 million, or $5.78 per share, from $252.6 million, or $5.30 per share, in the year-ago period. Revenue increased from $2.55 billion in the year-ago quarter.

Beauty has remained a hot category for consumers, even as they pull back or watch their spending in other discretionary categories. Yet that’s fueled tougher competition for Ulta Beauty as specialty players like LVMH-owned Sephora, big-box retailers like Walmart and department stores like Kohl’s have all bulked up their beauty businesses.
For investors, tariffs have been a closely watched challenge for retailers, too. Compared to other retailers, Ulta is not as directly exposed. Only about 1% of the company’s merchandise last fiscal year was direct imports, then-CFO Paula Oyibo said in May on the company’s earnings call. She said at the time most of Ulta’s exposure to the higher duties was minor, such as store fixtures and supplies.
Even in tumultous economic times, Steelman said beauty and wellness tend to fare better because they “offer a unique sense of comfort and escape.”
“Our insight suggests consumers continue to prudently manage their day-to-day spending and are watchful of pricing trends in response to tariffs,” she said on the earnings call. “At the same time, beauty enthusiasts tell us that they’re prioritizing their beauty regimens and remain strongly engaged within the category.”
In the second quarter, Ulta’s comparable sales grew 6.7% year over year, more than double analysts’ expectations, according to StreetAccount.
Customers visited more and spent more when they shopped on Ulta’s website and in its stores compared to the year-ago quarter. Transactions rose by 3.7% and average ticket increased by 2.9%.
Ulta added new brands and products that drove purchases in the quarter, including more products from Sol de Janeiro, exclusive Korean beauty brand Peach & Lily and Shakira’s hair care brand, Isima, Steelman said on the company’s earnings call.
Plus, she said, it’s trying to reach more of its existing and prospective customers in new ways. It had an activation at the Coachella and Lollapalooza music festivals and was the official beauty retail partner of Beyonce’s Cowboy Carter Tour.
In a growing number of Ulta stores, it is dedicating space to wellness-related products, such as supplements. It has opened a wellness shop in about 370 stores and plans to expand them to more stores this quarter, Steelman said.
Along with attracting more customers in the U.S., Ulta has looked internationally for growth. It announced in July that had acquired Space NK, a British beauty retailer, from Manzanita Capital. The deal allows Ulta to enter a new international market, since Space NK has 83 stores in the United Kingdom and Ireland.
Ulta did not disclose the price of the acquisition, saying it funded the transaction with cash on hand and Ulta’s existing credit facility and that it would not be material to financial results for the fiscal year.
For Ulta, Space NK offered a less expensive way to enter a new market, Steelman said. Its business, which will continue to operate independently, could offer learnings that could shape Ulta’s strategy, she said. Compared to Ulta, its shops tend to be smaller, located on main streets in cities and sell primarily prestige beauty merchandise.
The company is expanding in other international markets, too. Ulta recently marked the soft opening of its first Ulta store in Mexico and it plans to open its first store in the Middle East later this year, Steelman said Thursday on the company’s earnings call.
Ulta is also introducing a third-party marketplace, which Steelman said will launch in the third quarter. A growing number of retailers, including Best Buy, are launching the marketplaces a way to expand the mix of merchandise they carry without needing more store shelf space or buying more of their own inventory.
At the same time, Ulta recently announced the end of one of its efforts to expand reach. It cut ties with Target, which had opened mini Ulta shops in more than 600 big-box stores. The licensing deal, which will end in August 2026, allowed Target to sell a smaller and rotating assortment of makeup, skincare, hair care products and more that are carried by the full Ulta stores. Target carried those items on its website, and it staffed the shops.
For Ulta, however, the Target deal contributed little to its finances, Steelman said. Royalty revenue from the deal last fiscal year “was well below 1% of net sales,” she said on the company’s earnings call.
Ulta is looking for a new CFO as well. The company’s former CFO, Oyibo, left Ulta in late June after about a year in the role. Ulta has not yet announced her permanent successor. More

Gap posted mixed fiscal second-quarter results, beating on earnings per share but missing on revenue, driven by declines at its athleisure brand Athleta.
The specialty apparel company behind Old Navy, Banana Republic, Athleta and its namesake banner is two years into CEO Richard Dickson’s turnaround plan.
Dickson told CNBC his playbook is working but acknowledged he was “disappointed” in Athleta’s performance.

People walk past the entrance of a Gap store in Paris, France, July 1, 2021.
Sarah Meyssonnier | Reuters

Gap stock fell in extended trading on Thursday after the company warned tariffs will impact its profits moving forward.
When Gap last reported results in May, it said it expected tariffs to cost between $100 million and $150 million on a net basis, but on Thursday, it said those costs are now going to be between $150 million and $175 million. 

Its full-year operating margin is expected to be between 6.7% and 7%, down from 7.4% in the previous fiscal year, reflecting a tariff impact between 1 percentage point and 1.10 percentage points.
In its current quarter, its expecting its gross margin to be down between 1.5 and 1.7 percentage points, driven by tariff costs.
Beyond tariffs, the specialty apparel company behind Old Navy, Athleta, Banana Republic and its namesake banner delivered mixed results in its fiscal second quarter. Here’s how Gap performed in the quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 57 cents vs. 55 cents expected
Revenue: $3.73 billion vs. $3.74 billion expected

The company’s reported net income for the three-month period that ended Aug. 2 was $216 million, or 57 cents per share, compared with $206 million, or 54 cents per share, a year earlier. 
Sales rose to $3.73 billion, up slightly from $3.72 billion a year earlier. Sales came in lower than expected and so did comparable sales. During the quarter, comparable sales rose 1%, weaker than the 1.9% rise that analysts had expected, according to StreetAccount.

While Gap, Banana Republic and Old Navy all saw comparable sales rise during the quarter, Athleta dragged down the company’s overall performance with comps down 9%. 
“Clearly, Athleta is a powerful brand in the active space, being the number five brand in the space, but we’re disappointed in the quarter. We have moved away, if you will, from really distinctive performance roots,” CEO Richard Dickson told CNBC in an interview. “We’ve paid a lot of attention, trying to court a new customer, and ultimately didn’t have enough offerings for our core customer. As we balance that out, we’ve been very transparent to say it’s a year of reset for us.” 
Last month, Gap announced that Maggie Gauger, a longtime veteran of Nike, had been tapped as Athleta’s next CEO — the third top executive hired to helm the brand in the last two years. 
The company reaffirmed its fiscal 2025 net sales growth outlook and is continuing to expect revenue to grow between 1% and 2%, in line with estimates of 1.6%, according to LSEG. For the current quarter, Gap is expecting sales to grow between 1.5% and 2.5%, better than the 2% that analysts had estimated, according to LSEG.
To offset the impact of tariffs, Gap is doing what other companies are doing: working with its suppliers, adjusting its sourcing, diversifying its supply chain and taking targeted price increases where appropriate. 
Notably, the company said it doesn’t expect the annualization of tariffs to cause any further declines in operating income in 2026. 
“As it relates to pricing, we’re making targeted adjustments with pricing, as we always do. There isn’t anything that we’ve done that is substantially different,” Dickson said. “We focus on making sure that we’re presenting to our consumer the right value proposition, and ultimately want to make even more sure that we’re sustaining the momentum and market share gains that our playbook has been performing.” 
Just over two years into Dickson’s tenure as Gap’s CEO, the company is in a far different position. It’s seen six straight quarters of comparable sales growth, it’s sitting on a $2.2 billion cash pile and its brands are back at the center of culture and conversation. 
Recently, Gap launched its “Better in Denim” campaign featuring Katseye and Kelis’s 2003 hit “Milkshake.” Dickson said the campaign has been a standout success, delivering 20 million views in the first three days, 400 million total views and 8 billion impressions. It’s also the No. 1 search on TikTok, Dickson said. 
“We could all acknowledge that Gap moved from what was a clothing retailer just a couple years ago, that was overly promotional and didn’t have necessarily a strong voice from a merchandising perspective to consumers, and now today, it is a pop culture brand that’s telling great stories, driving great merchandising initiatives and arguably shaping culture with some of the programs and products and marketing campaigns,” Dickson said. “This is proving that Gap is a powerful pop culture brand, and this is also what our playbook looks like when you get it right.” 
The campaign highlights the efforts Gap is taking to stay competitive in the crucial denim category, especially with Levi’s recent partnership with Beyoncé and American Eagle’s campaign with Sydney Sweeney. At a time when consumers are pulling back on nice-to-have products like new clothes and accessories, retailers have had to do more to cut through the noise and ensure they’re resonating with consumers. 
Still, as the company continues to make strides in its turnaround plan, Wall Street has come to expect a lot, and Gap has had to work harder to beat expectations. 
During the quarter, its gross margin came in at 41.2%, behind expectations of 41.9%, according to StreetAccount. 
Here’s a closer look at how each brand performed: 
Old Navy: Gap’s largest and most important brand saw sales of of $2.2 billion, up 1% compared with last year. Comparable sales were up 2%, compared with expectations of up 2.2%, according to StreetAccount.
Gap: The namesake banner saw net sales of $772 million, up 1% compared with last year. Comparable sales were up 4%, compared with expectations of 4.1%, according to StreetAccount. Its the seventh consecutive quarter of comparable sales growth.  
Banana Republic: The safari-chic, business essentials brand saw net sales of $475 million, down 1% compared with last year. Comparable sales were up 4%, far ahead of expectations of 0.2%, according to StreetAccount.  
Athleta: The athleisure brand saw sales of $300 million, down 11% compared to last year. Comparable sales were down 9%. The brand’s new CEO is looking to reverse that slump and reconnect with Athleta’s core consumer.  More

The Centers for Disease Control and Prevention is facing a leadership upheaval – and at the center is concerns about the agency’s approach to vaccines and U.S. public health.
The White House on Thursday said President Donald Trump had fired CDC Director Susan Monarez after she refused to resign.
The loss of respected leaders and efforts to oust Monarez follow a string of measures by Health and Human Services Secretary Robert F. Kennedy Jr. – a prominent vaccine skeptic – to overhaul federal health agencies and change immunization policy in the U.S.

The exterior of the Center for Disease Control and Prevention (CDC) main campus in Atlanta, Georgia, U.S., Aug. 27, 2025.
Alyssa Pointer | Reuters

The Centers for Disease Control and Prevention is facing a leadership upheaval — and at the center of the shakeup is concern about the agency’s approach to vaccines and U.S. public health.
The White House on Thursday said President Donald Trump had fired CDC Director Susan Monarez after she refused to resign. Lawyers for Monarez said she was “targeted” for “protecting the public over serving a political agenda.”

Meanwhile, four other top health officials at the CDC announced Wednesday they were quitting the agency. That includes Demetre Daskalakis, director of the National Center for Immunization and Respiratory Diseases, who said he could no longer serve because of the “weaponizing of public health.”

Former Centers for Disease Control and Prevention (CDC) Chief Medical Officer Debra Houry, former National Center for Immunization and Respiratory Diseases Director Demetre Daskalakis, and former National Center for Emerging and Zoonotic Infectious Diseases Director Daniel Jernigan hold flowers and react after they appeared during a protest, a day after the White House fired CDC director Susan Monarez and several top officials resigned, in Atlanta, Georgia, U.S., Aug. 28, 2025.
Alyssa Pointer | Reuters

The loss of those respected leaders and efforts to oust Monarez follow a string of measures by Health and Human Services Secretary Robert F. Kennedy Jr. – a prominent vaccine skeptic – to overhaul federal health agencies and change immunization policy in the U.S. That includes mass firings, gutting a key government vaccine panel, canceling studies on mRNA shot technology and hiring those with like-minded views.
Kennedy has a long track record of making misleading and false statements about the safety of vaccine shots, but in his current role, he wields enormous power over the agencies that regulate the immunizations and determine both who can get them and which ones insurance plans should cover.
Dr. Georges Benjamin, executive director of the American Public Health Association, said the leadership overhaul at the CDC represents Kennedy’s “failed leadership and reckless mismanagement,” adding that he has a “blatant disregard for science and evidence-based public health.” 
The agency is also reeling from funding cuts and an Aug. 8 attack by a gunman at its headquarters in Atlanta.

Some health policy experts said the leadership exodus could further erode the public’s trust in an agency that is responsible for detecting disease outbreaks and guiding state and local health departments when needed.
“This has to be seen on top of a raft of ways that CDC has been weakened and undermined, maybe irreversibly,” Lawrence Gostin, professor of public health law at Georgetown University, told CNBC. 
“Throughout all of those years, CDC has been independent and the jewel in the crown of American science. That’s literally all crumbling as we speak,” he said. “This is almost the definition of politics undermining science.”

Top official highlights vaccine concerns

Daskalakis was among the officials to explicitly highlight concerns with the views held by Kennedy and his staff, which he said challenged his ability to continue in his role at the agency.
“I am unable to serve in an environment that treats CDC as a tool to generate policies and materials that do not reflect scientific reality and are designed to hurt rather than to improve the public’s health,” Daskalakis said in his resignation letter, which was posted on X.
He said the CDC’s recent changes to the adult and children’s immunization schedule “threaten the lives of the youngest Americans and pregnant people.”

High-ranking members of the Centers for Disease Control and Prevention (CDC), dressed in uniform, salute former CDC Chief Medical Officer Debra Houry, former National Center for Immunization and Respiratory Diseases Director Demetre Daskalakis, and former National Center for Emerging and Zoonotic Infectious Diseases Director Daniel Jernigan, a day after the White House fired CDC Director Susan Monarez and several top officials resigned, in Atlanta, Georgia, U.S., Aug. 28, 2025.
Alyssa Pointer | Reuters

In May, Kennedy said the CDC removed Covid vaccines from the list of shots recommended for healthy pregnant women and children. An updated guidance days later said shots “may” be given to those groups.
Daskalakis said the data analyses that supported the change have “never been shared with the CDC despite my respectful requests to HHS and other leadership.” He also said HHS circulated a “frequently asked questions” document written to support Kennedy’s decision without input from CDC subject matter experts, and that it cited studies “that did not support the conclusions that were attributed to these authors.”
On Wednesday, the Food and Drug Administration approved the latest round of Covid vaccines only for those at higher risk of serious illness, marking another shift in policy around those shots since the pandemic began.
Shares of Covid vaccine makers dipped on Thursday. Moderna’s stock fell more than 3%, while shares of Pfizer fell around 2%. 
Those companies and other drugmakers have been bracing for changes to vaccine and public health policy since Trump first named Kennedy as his pick to lead HHS in November. The CDC’s leadership shakeup only adds to the uncertainty in the pharmaceutical industry, which is also grappling with Trump’s drug pricing policies. 
Kennedy tried to distance himself from his previous views about vaccines and other health policies during his Senate confirmation hearings back in January, claiming that he isn’t “anti-vaccine” and would not make it “difficult or discourage people from taking” routine shots for measles and polio.
But some of Kennedy’s recent efforts appear to reflect his vaccine-critical views. For example, Kennedy in August argued that mRNA vaccines – the technology used in Covid shots – are ineffective and advocated for the development of other jabs that use other “safer” platforms.
Years of research support the effectiveness of mRNA Covid vaccines, and the technology is now approved for use in shots against respiratory syncytial virus.

Threat to public health 

Former National Center for Immunization and Respiratory Diseases Director Demetre Daskalakis, next to former National Center for Emerging and Zoonotic Infectious Diseases Director Daniel Jernigan, speaks to the media during a protest, a day after the White House fired CDC director Susan Monarez and several top officials resigned, in Atlanta, Georgia, U.S., Aug. 28, 2025.
Alyssa Pointer | Reuters

As changes roll through the CDC, concerns over a threat to public health and protocol are growing.
Daskalakis slammed the means by which HHS and other CDC leadership have communicated major policy changes. For example, Kennedy announced he was firing the entirety of the Advisory Committee on Immunization Practices – a panel of vaccine advisors to the CDC – through an X post and op-ed “rather than direct communication with these valuable experts,” Daskalakis said. 
He said he believed there would be an opportunity to brief Kennedy on key topics such as measles, avian influenza and the approach to the respiratory virus season. But Daskalakis said seven months into the new administration, no CDC subject matter expert from his center had briefed Kennedy. 
“I am not sure who the Secretary is listening to, but it is quite certainly not to us,” he said. “Unvetted and conflicted outside organizations seem to be the sources HHS use over the gold standard science of CDC and other reputable sources.”

Former Centers for Disease Control and Prevention (CDC) Chief Medical Officer Debra Houry, followed by former National Center for Immunization and Respiratory Diseases Director Demetre Daskalakis, and former National Center for Emerging and Zoonotic Infectious Diseases Director Daniel Jernigan, reacts during a protest, a day after the White House fired CDC director Susan Monarez and several top officials resigned, in Atlanta, Georgia, U.S., Aug. 28, 2025.
Alyssa Pointer | Reuters

Dr. Debra Houry, who also resigned Wednesday from her post as the CDC’s chief medical officer, similarly said that senior leaders “never were able to brief the Secretary” on any of the issues the agency deals with.
“The CDC scientists are top notch and excellent,” she told MSNBC in an interview. “What we would actually have preferred was to have more interactions with the secretary.”
Houry added that “over the past few months, things at the CDC have been really difficult when it comes to having science and data driven decisions.”
As longtime experts leave the CDC, the threat of infectious diseases is growing. While measles cases are ticking up in the U.S. again, bird flu is spreading in cattle. The first human case of the flesh-eating parasite “New World screwworm” has been detected in the country.
The departures could “make our public health less assured,” Benjamin of the American Public Health Association said.

Susan Monarez, U.S. President Donald Trump’s nominee to be director of the Centers for Disease Control and Prevention, testifies before a Senate Health, Education, Labor, and Pensions Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., June 25, 2025.
Kevin Mohatt | Reuters

He said the leadership disruption also raises concerns about the nation’s ability to detect and respond to an emerging infectious disease spreading because the CDC is the “glue that holds” individual doctors and state and local health departments together.
“I am worried that we won’t know in time, and that we’ll be chasing that disease for far longer than we should,” Benjamin said. 
Benjamin said he has “little confidence” that the Trump administration will find someone “highly competent” with relevant experience to replace Monarez. 
“It obviously all has enormous implications for the health and well being of the public, and enormous implications around the finances of our nation,” he said. “Prevention and wellness saves us money, and public health is the best buy.” More