Why GAP Shares Are Down Nearly 15% In After-Hours Trading

• Gap lowered its fiscal 2026 net sales growth outlook to 1%-2%, down from a prior estimate of 2%-3%.
• The company reported Q1 adjusted earnings per share of $0.38, in line with analyst estimates, while revenue slightly missed estimates.
• Brand performance was uneven, with Gap outpacing peers while Athleta and Old Navy lagged.

Shares of Gap Inc. (GAP) fell more than 15% in after-hours trading on Thursday after the apparel retailer cut its full-year net sales growth outlook.

The company now expects fiscal 2026 sales to rise 1% to 2% year-over-year, down from its prior forecast of 2% to 3% growth. 

GAP Posts Mixed Quarterly Performance

Gap Inc. (GAP) reported mixed first-quarter results on Thursday. Adjusted earnings per share came in at $0.38, in line with analyst estimates, according to data from Koyfin. 

Revenue stood at $3.50 billion, below estimates of $3.52 billion, but higher than $3.46 billion reported a year earlier.

Adjusted net income for the quarter was $145 million, below estimates of $148 million. 

Comparable Sales Performance Across Brands

Gap’s overall comparable sales, along with results from Old Navy, Banana Republic and Athleta, fell short of analyst expectations for the quarter.

The company’s namesake Gap brand outperformed, with comparable sales rising 10%, well ahead of the 5.5% forecast. Old Navy posted 1% growth versus expectations of 3%, while Banana Republic rose 2%, below the 4% estimate. Athleta also underperformed, with comparable sales down 11% and overall sales declining 12%. 

GAP Raises Earnings Guidance Despite Sales Cut

While Gap lowered its full-year sales outlook, the company raised its earnings guidance. It now expects adjusted earnings per share of $2.30 to $2.40, up from its previous range of $2.20 to $2.35.

Gap also raised its annual profit forecast, citing an expected boost from tariff relief. The company said it anticipates about $80 million in net tariff-related benefit to gross profit and operating income in fiscal 2026. The benefit is expected to be concentrated in the second and third fiscal quarters, based on the timing of receipts.

The company also returned $464 million to shareholders during the first quarter through share repurchases and dividends.

GAP Stock: What Retail Sentiment Says

Retail sentiment on Stocktwits for GAP turned “bullish” on Thursday, up from “bearish” a day earlier. Message volume also jumped, moving into the “extremely high” territory from “high” 24 hours ago.

GAP shares have declined over 3.5% year-to-date.

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