GAP (NYSE:GAP) Posts Quarterly Earnings Results

GAP (NYSE:GAP) issued its earnings results on Thursday. The company reported $0.38 EPS for the quarter, missing the consensus estimate of $0.39 by ($0.01), FiscalAI reports. The business had revenue of $3.50 billion for the quarter, compared to the consensus estimate of $3.52 billion. GAP had a net margin of 6.25% and a return on equity of 21.17%. The business’s revenue was up 1.0% on a year-over-year basis. During the same quarter in the previous year, the firm posted $0.51 EPS. GAP updated its FY 2026 guidance to 2.300-2.400 EPS.

Here are the key takeaways from GAP’s conference call:

• Gap Inc. posted its ninth straight quarter of positive comparable sales, with company comps up 2% and gross margin coming in ahead of expectations. Management also said the quarter was in line with internal plans overall despite mixed brand performance.
• Old Navy underperformed due to weaker seasonal women’s dress sales, and the company said the assortment and price/value mix did not resonate as intended. Trends improved after mid-May adjustments, but the brand’s full-year outlook was moderated.
• Gap brand continued to be the standout performer, with Q1 comparable sales up 10% and positive comps for a 10th consecutive quarter. The company highlighted stronger cultural storytelling, lower discounting, and gains in denim, fleece, and kids as drivers of momentum.
• Athleta remained in rebuild mode and posted a disappointing quarter, with sales down as the company worked through legacy inventory and reshaped the assortment. Management expects Q2 to look similar to Q1 before improvement later in the year.
• Gap raised full-year EPS guidance to $2.30-$2.40 while trimming sales growth expectations to 1%-2%. The updated outlook reflects tariff timing assumptions, cost discipline, stronger buybacks, and continued investment in growth initiatives like beauty, accessories, loyalty, and AI-enabled tools.

GAP Price Performance

GAP stock opened at $21.14 on Friday. The stock has a 50-day moving average price of $24.20 and a two-hundred day moving average price of $25.66. The stock has a market cap of $7.72 billion, a PE ratio of 8.32, a price-to-earnings-growth ratio of 1.45 and a beta of 2.11. The company has a current ratio of 1.75, a quick ratio of 1.08 and a debt-to-equity ratio of 0.39. GAP has a 1 year low of $18.68 and a 1 year high of $29.36.

GAP Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, July 29th. Shareholders of record on Wednesday, July 8th will be issued a dividend of $0.175 per share. This represents a $0.70 dividend on an annualized basis and a yield of 3.3%. The ex-dividend date is Wednesday, July 8th. GAP’s dividend payout ratio is 27.56%.

Analyst Upgrades and Downgrades

Several brokerages have commented on GAP. Bank of America dropped their target price on shares of GAP from $29.00 to $26.00 and set a “neutral” rating for the company in a research report on Friday. Barclays lowered their price objective on shares of GAP from $33.00 to $26.00 and set an “overweight” rating for the company in a research report on Friday. Wells Fargo & Company lowered their price objective on shares of GAP from $30.00 to $26.00 and set an “overweight” rating for the company in a research report on Friday. The Goldman Sachs Group lowered their price objective on shares of GAP from $32.00 to $28.00 and set a “buy” rating for the company in a research report on Friday. Finally, TD Cowen lowered their price objective on shares of GAP from $32.00 to $26.00 and set a “buy” rating for the company in a research report on Monday, May 18th. Two research analysts have rated the stock with a Strong Buy rating, ten have issued a Buy rating and six have assigned a Hold rating to the company. According to MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus price target of $28.71.

Key Headlines Impacting GAP

Here are the key news stories impacting GAP this week:

• Negative Sentiment: The Gap reported Q1 EPS of $0.38, missing estimates, and revenue of $3.50 billion, also slightly below expectations. The market is reacting to the earnings miss and lower revenue trend. Article Title
• Negative Sentiment: Management lowered fiscal 2026 revenue guidance to 1% to 2% growth from 2% to 3%, citing slower Old Navy growth and weaker-than-expected spring/summer demand. Article Title
• Negative Sentiment: Several headlines highlighted that shares fell sharply after the company’s cautious Q2 outlook and sales guidance reset, with analysts and media focusing on the weak consumer backdrop and pressure on nonessential spending. Article Title
• Neutral Sentiment: Gap still posted 2% comparable sales growth for a ninth straight quarter, and the flagship Gap brand remained relatively strong, which partially offsets the weaker outlook. Article Title
• Neutral Sentiment: Analysts broadly kept positive or neutral ratings but lowered price targets, signaling that Wall Street sees upside from current levels, while acknowledging slower near-term growth. Article Title
• Negative Sentiment: A shareholder investigation notice added another overhang, reflecting investor concern that the quarter’s results may have involved disclosure or securities-law issues. Article Title

Insider Activity

In other GAP news, CFO Katrina O’connell sold 153,413 shares of the stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $23.85, for a total transaction of $3,658,900.05. Following the completion of the transaction, the chief financial officer owned 11,503 shares in the company, valued at approximately $274,346.55. This represents a 93.02% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CEO Mark Breitbard sold 119,155 shares of the firm’s stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $23.80, for a total value of $2,835,889.00. Following the completion of the transaction, the chief executive officer owned 135,884 shares of the company’s stock, valued at $3,234,039.20. The trade was a 46.72% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 923,098 shares of company stock worth $22,648,158. 31.00% of the stock is currently owned by insiders.

Hedge Funds Weigh In On GAP

Several hedge funds have recently modified their holdings of GAP. Amundi bought a new position in shares of GAP in the 1st quarter valued at about $259,000. EverSource Wealth Advisors LLC grew its holdings in shares of GAP by 177.0% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 7,016 shares of the company’s stock valued at $153,000 after acquiring an additional 4,483 shares in the last quarter. Jump Financial LLC bought a new position in shares of GAP in the 2nd quarter valued at about $612,000. California State Teachers Retirement System grew its holdings in shares of GAP by 0.8% in the 2nd quarter. California State Teachers Retirement System now owns 226,506 shares of the company’s stock valued at $4,940,000 after acquiring an additional 1,703 shares in the last quarter. Finally, Ameriprise Financial Inc. grew its holdings in shares of GAP by 42.7% in the 2nd quarter. Ameriprise Financial Inc. now owns 4,407,809 shares of the company’s stock valued at $96,134,000 after acquiring an additional 1,318,322 shares in the last quarter. Institutional investors own 58.81% of the company’s stock.

About GAP

Gap Inc is a global specialty retailer renowned for its portfolio of apparel and accessories brands, including Gap, Banana Republic, Old Navy and Athleta. The company designs, sources and markets clothing across a broad price range and style spectrum, catering to men, women and children. Its offerings extend from everyday wardrobe essentials such as denim, tees and outerwear to performance and lifestyle pieces, reflecting each brand’s distinct identity and price point.

Founded in San Francisco in 1969 by Donald and Doris Fisher, Gap Inc has grown into one of the world’s largest apparel companies.