GAP (NYSE:GAP) Posts Earnings Results, Beats Expectations By $0.04 EPS

GAP (NYSE:GAP) announced its quarterly earnings results on Thursday. The company reported $0.52 EPS for the quarter, beating analysts’ consensus estimates of $0.48 by $0.04, FiscalAI reports. GAP had a return on equity of 21.13% and a net margin of 6.25%.The company had revenue of $3.65 billion during the quarter, compared to analyst estimates of $3.69 billion. During the same period in the prior year, the company earned $0.57 earnings per share. The firm’s revenue was down 2.0% on a year-over-year basis. GAP updated its FY 2026 guidance to 2.350-2.450 EPS.

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

• Revenue missed expectations in Q2, with net sales down 2% and comparable sales down 1%; the company narrowed its full-year net sales growth outlook to 1%–1.5%.
• Old Navy comparable sales declined 4% as women’s seasonal categories, pricing, and weaker marketing-driven traffic pressured results. Management expects sequential improvement in the second half and is using targeted assortment, pricing, and marketing changes to support a recovery.
• Gap remained the portfolio’s standout performer, with comparable sales up 10% for its 11th consecutive quarter of growth, supported by denim, fleece, kids and baby, stronger customer engagement, and market-share gains.
• Athleta continued to struggle, with comparable sales down 12%; management is prioritizing inventory discipline, more product newness, and improved storytelling, but expects trends to remain similar to the first half for the full year.
• Profitability and shareholder returns exceeded expectations, with adjusted gross margin up 20 basis points and full-year adjusted EPS guidance raised to $2.35–$2.45. Gap also repurchased $200 million of stock during the quarter, bringing year-to-date buybacks above $600 million, while raising its adjusted operating-margin outlook to 7.4%–7.6%.

GAP Price Performance

Shares of GAP stock opened at $20.84 on Friday. The stock has a market cap of $7.50 billion, a price-to-earnings ratio of 8.20, a price-to-earnings-growth ratio of 1.25 and a beta of 2.05. The company has a debt-to-equity ratio of 0.41, a quick ratio of 1.08 and a current ratio of 1.81. The stock has a 50 day moving average price of $20.01 and a 200-day moving average price of $22.87. GAP has a one year low of $18.11 and a one year high of $29.36.

GAP Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, October 28th. Stockholders of record on Wednesday, October 7th will be issued a $0.175 dividend. The ex-dividend date is Wednesday, October 7th. This represents a $0.70 dividend on an annualized basis and a dividend yield of 3.4%. GAP’s payout ratio is 27.56%.

Institutional Trading of GAP

A number of institutional investors have recently bought and sold shares of the stock. Public Employees Retirement System of Ohio increased its position in GAP by 0.6% during the third quarter. Public Employees Retirement System of Ohio now owns 71,867 shares of the company’s stock valued at $1,537,000 after acquiring an additional 447 shares during the last quarter. California State Teachers Retirement System lifted 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 worth $4,940,000 after acquiring an additional 1,703 shares during the last quarter. EverSource Wealth Advisors LLC lifted 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 worth $153,000 after acquiring an additional 4,483 shares during the last quarter. Russell Investments Group Ltd. boosted its stake in shares of GAP by 16.8% during the 3rd quarter. Russell Investments Group Ltd. now owns 37,093 shares of the company’s stock worth $793,000 after purchasing an additional 5,326 shares during the period. Finally, Atlas Capital Advisors Inc. purchased a new position in shares of GAP during the 4th quarter worth about $203,000. 58.81% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

A number of research firms have issued reports on GAP. Barclays set a $23.00 price objective on GAP in a research note on Friday. Evercore set a $20.00 target price on GAP and gave the company an “in-line” rating in a research report on Friday, May 29th. Morgan Stanley reissued an “equal weight” rating and issued a $21.00 target price on shares of GAP in a report on Monday, July 6th. The Goldman Sachs Group reduced their price target on shares of GAP from $28.00 to $25.00 and set a “buy” rating on the stock in a research report on Thursday, August 20th. Finally, Weiss Ratings downgraded shares of GAP from a “hold (c+)” rating to a “hold (c)” rating in a research note on Tuesday, July 28th. Two research analysts have rated the stock with a Strong Buy rating, five have issued a Buy rating, ten have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, GAP currently has an average rating of “Hold” and a consensus target price of $26.50.

Key GAP News

Here are the key news stories impacting GAP this week:

• Positive Sentiment: Gap reported adjusted earnings of $0.52 per share, exceeding the $0.48 analyst consensus. Gross margin expanded 20 basis points to 41.4%, helping the company outperform operating-profit expectations despite softer sales. Gap names Michael Francis Old Navy CEO as quarterly profit beats estimates
• Positive Sentiment: Management raised fiscal 2026 EPS guidance to $2.35-$2.45, above the roughly $2.33 consensus, reflecting confidence in continued profit improvement and cost discipline. The company has also returned $726 million to shareholders through buybacks and dividends year to date. Gap lifts annual profit forecast on strength of namesake brand
• Positive Sentiment: The Gap namesake brand and Banana Republic performed better than expected, providing evidence that the company’s brand turnaround is gaining traction and offsetting weakness elsewhere. Gap rallies after Banana Republic and its namesake brand outperform expectations
• Neutral Sentiment: Michael Francis, a former retail executive with experience at Walmart and Target, will become Old Navy’s president and CEO on November 2. Investors viewed the leadership change as a potential turnaround catalyst, although execution will take time. Gap announces leadership transition at Old Navy
• Negative Sentiment: Quarterly net sales fell 2% year over year to $3.65 billion, below the $3.69 billion consensus, while comparable sales declined 1%. Old Navy was the main weakness, prompting the leadership overhaul and limiting the outlook for revenue growth. Gap Inc. Reports Second Quarter Fiscal 2026 Results

GAP Company Profile

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.