Gap Cuts Sales Growth Forecast to 1%-2% After Old Navy’s 1% Q1 Gain
GAP•Gap cut its full-year net sales growth forecast to 1%-2% after Old Navy delivered 1% comparable sales in Q1 versus the 3% analysts expected, weighing on projections. First-quarter net sales rose 1% to $3.5 billion and adjusted EPS beat estimates at $0.38.
1. Guidance Cut Following Old Navy Shortfall
Gap trimmed its full-year net sales growth forecast to 1%-2% from 2%-3% after Old Navy posted a 1% comparable sales increase in the first quarter versus the 3% originally projected. Old Navy represents nearly 60% of Gap’s revenue, making its performance pivotal to group targets.
2. Q1 Financial Highlights
Total company net sales rose 1% to $3.5 billion in Q1, while adjusted earnings per share came in at $0.38, slightly above the $0.37 estimate. A $313 million legal settlement boosted reported net income to $339 million.
3. Brand Performance Details
The Gap brand delivered a 10% comparable sales gain, marking its strongest growth in over 20 years. Banana Republic saw a 2% increase in comps versus a 4% expectation, and Athleta’s sales fell 12% with comp sales down 11%.
4. EPS Guidance Raised and Outlook
Gap raised its full-year adjusted EPS forecast to $2.30-$2.40 from $2.20-$2.35, citing tax rate benefits and higher interest income. The company excluded an anticipated $80 million tariff reduction tailwind from the official outlook and expects Q2 sales to be flat to down 1%.




