Gap Cuts 2026 Sales Growth Forecast to 1%-2% as Q1 Revenue Misses
GAP•Gap Inc. cut its fiscal 2026 net sales growth forecast to 1%-2%, down from 2%-3%, driving a 15% after-hours share drop. The company reported Q1 adjusted EPS of $0.38 on $3.50 billion revenue, raised full-year EPS guidance to $2.30–$2.40, and cited an $80 million tariff benefit.
1. Fiscal 2026 Sales Outlook Cut
Gap trimmed its fiscal 2026 net sales growth forecast to 1%-2%, down from 2%-3%, prompting a 15% drop in after-hours trading as investors reacted to the revised outlook.
2. Mixed First-Quarter Financials
In Q1, adjusted earnings per share of $0.38 matched consensus estimates on revenue of $3.50 billion, below the $3.52 billion forecast, while net income reached $145 million versus $148 million expected.
3. Brand Comparable Sales Performance
Comparable sales at the Gap flagship surged 10% against a 5.5% projection, while Old Navy grew 1%, Banana Republic 2% and Athleta declined 11%, reflecting uneven brand momentum.
4. Raised Earnings Guidance and Shareholder Returns
The company increased its full-year adjusted EPS guidance to $2.30–$2.40 from $2.20–$2.35, anticipates an $80 million tariff relief benefit in the second and third quarters, and returned $464 million to shareholders via buybacks and dividends.




