Gap and Ross Stores Have a Weather Problem
But you wouldn’t know it from their earnings calls…
The first step to a cure is admitting you have a problem —Alcoholics Anonymous
I’d planned on doing a rundown on the earnings results of specialty apparel when most of the companies I follow report next week, but on the back of the GAP and ROST earnings beats yesterday, I’m breaking them out separately this morning — because the commentary from leadership was unusually instructive.
A little background first: more than 20 years ago, both Gap and Ross were clients of mine. I know how their businesses move with the weather. Their sales aren’t just weather-influenced; they’re weather-driven — especially during the fall (and spring!) transitions when a few degrees can accelerate or stall entire categories.
So no, I wasn’t surprised (and neither were you, dear readers) when both companies beat the Street… bigly.
Gap (NYSE: GPS): Surprises With Q3 CY2025 Sales
Ross Stores (NASDAQ: ROST): Q3 CY2025 Beats on Revenue
If you’re a regular reader, you may recall that I’ve been calling for this kind of upside surprise for quite a while:
The Fall Weather Dividend That Shouldn’t Surprise You — But Might Surprise Wall Street
Retail Silver Lining? Colder Temperatures to Drive Stronger Fall/Holiday ’25 Demand
Yes, this may sound like a victory lap — okay, maybe it is a little — but the point isn’t the prediction. It’s the fact that it should not have been a surprise to the Street, or even to operators at Gap and Ross.
The real message is this: If you can measure and predict these seasonal shifts, you can manage for them.
And the fact that both GAP and ROST clearly benefited from weather tailwinds yet barely mentioned it tells me they may be drinking their own Kool-Aid — setting themselves up for disappointment in Q4, and more importantly Q3 of 2026, when the winds of weather favorability will inevitably change direction.
The W-Word That No One Wants to Say
Wall Street has spent decades pretending that the weather is noise. Retailers have spent decades using weather as an excuse.
But here’s the truth — the truth they won’t articulate in earnings calls: Weather isn’t background noise or a convenient excuse — it’s a demand driver (except when it’s not) that quietly decides winners and exposes pretenders.
When it helps, companies call it “great execution.” When it hurts, they blame it outright. But admitting it matters — really matters — remains mostly taboo.
Gap didn’t mention weather once in their Q3 call. Ross mentioned it once, grudgingly, in the Q&A:
“Some people are calling out that weather may have been a help…”
May have been? Come on.
Both of these companies are profoundly sensitive to seasonal timing, product mix, and demand curves that turn on a dime with temperature swings. And this year, fortunately, those swings worked in their favor.
A Cooler Fall — Especially October — Drove the Surprise
When you line up the numbers, the timing, and the regional patterns, the simplest explanation is also the right one: the weather did the work.
October was cooler and more seasonally aligned than last year — just cool enough to pull shoppers into fall categories earlier, accelerate sell-through on denim and fleece, and lift weekend traffic in the Midwest and Southeast.
You don’t need exotic theories about sudden execution breakthroughs or surprise consumer strength. Occam’s Razor applies: the most straightforward, evidence-based answer is that a textbook weather assist was driving much of the lift.
Whether leadership wants to say the word “weather” out loud or not, the pattern is unmistakable.
Gap: The Silent Beneficiary
Gap’s leadership struck a confident tone — “performing while we transform.” And to their credit, the results were strong. But the absence of any acknowledgment of weather is the tell.
Gap is one of the most weather-sensitive specialty apparel chains in America.
Old Navy — in particular — is practically a barometer with doors.
In a cooler October:
Denim pops
Active accelerates
Kids/baby sees stronger wardrobe fills
Families shop more often
Weekend traffic stabilizes
Early fall assortments sell at fewer markdowns
Gap got all of that. And they never said a word.
Ross: The One-Line Admission
Ross, to their credit, at least nodded to weather:
“Some people are calling out that weather may have been a help.”
That’s analyst-speak for: “Yes, it helped. No, we won’t quantify it.”
Ross’s business is exquisitely tuned to weather timing:
Stronger fall sell-through = better packaway flow
Cooler October = bigger shopping baskets
Midwest & Southeast activation = regional lift
Value seekers convert faster when the season actually feels like the season
This was a textbook weather-aligned quarter. And they only gave it one sentence.
Why This Matters for Q4 (and Q3/2026)
This is where the AA quote comes back in:
The first step to a cure is admitting you have a problem.
Gap and Ross don’t have a problem because weather helped them. They have a problem because they don’t appear to know it helped them—or at least they’re not admitting it.
If management believes Q3’s upside was purely execution, not aided by environmental tailwinds, they could:
Mis-forecast Q4
Mis-judge inventory
Mis-price promotions
Misread traffic timing
Misinterpret customer behavior
Mismanage cold-weather mix
And worst of all, be blindsided when weather reverses
And it will reverse. If not in Q4, then absolutely by next fall.
Seasonality shifts aren’t linear.
Weather variability is the new structural risk.
Treating weather as “background noise” is no longer sustainable.
The Bottom Line
Gap and Ross didn’t just deliver strong quarters — they benefited from a fall weather setup that arrived earlier, ran cooler, and aligned beautifully with their category mix.
They didn’t emphasize it on their calls, but that’s not unusual; most retailers still treat weather as background noise rather than a strategic input.
The real issue isn’t avoidance — it’s underutilization.
If retailers want to win in 2025 and 2026, the path forward is straightforward:
They need to recognize that the weather is not a distraction but a directional signal.They need to measure it with precision, predict its timing and regional variations, and build their plans around those shifts.
And they need to manage it proactively — leveraging tools like agentic AI to adjust inventory, promotions, and messaging in real time.
Because here’s the truth: retailers who work with the weather will keep outperforming expectations, and those who don’t will be shaped by it anyway.
The difference is whether they choose to lead with it — or get led by it.