The Gap, Inc. (GAP) reported adjusted earnings of 52 cents per share for Q2 of fiscal 2026, an 8.8% decrease year over year but surpassing the Zacks Consensus Estimate of 50 cents. Revenue totaled $3.65 billion, a decline of 2% year over year, missing the consensus mark of $3.72 billion by 1.9%. Comparable sales fell by 1%, yet the company experienced strong gross margins, leading to nearly a 15% increase in share price during after-hours trading.
Old Navy’s net sales reached $2.1 billion, down 4% year over year, while Banana Republic saw a slight increase to $478 million, with a 3% rise in comparable sales. Conversely, Athleta’s net sales dropped to $264 million, a decline of 12%. The Gap brand saw the strongest performance with net sales of $844 million, a 9% increase and a 10% rise in comparable sales.
For fiscal 2026, Gap anticipates net sales growth of 1-1.5%, adjusting its operating margin outlook to 7.4-7.6% and raising adjusted earnings per share guidance to $2.35-$2.45. The company ended the quarter with $2.5 billion in cash and has returned $726 million to shareholders year-to-date.
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