The Gap, Inc.
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.27%.
Did GAP Beat Earnings? Q1 2026 Results
Gap Inc. kicked off fiscal 2026 on solid footing, posting first-quarter earnings per share of $0.51 against a consensus estimate of $0.46 — a 10.87% beat — while net sales climbed 2.2% year-over-year to $3.46 billion, marking the company's ninth consecutive quarter of market share gains. The performance was anchored by Old Navy's 3% comparable sales growth and $1.98 billion in net sales, while the namesake Gap brand stood out with a 5% comp increase to $724 million, its sixth straight quarter of positive comps. Operating margin expanded 140 basis points to 7.5%, with gross margin reaching 41.8%, as disciplined cost management offset a softer showing from Athleta, where comps fell 8% amid an ongoing brand reset. Shares retreated despite the beat, however, as investors digested guidance that current tariffs could weigh on fiscal 2025 operating income by $100 million to $150 million — primarily in the back half — even after mitigation efforts. For the full year, Gap expects net sales growth of 1% to 2% and underlying operating income growth of 8% to 10%, excluding that tariff drag.
- 9th consecutive quarter of market share gains
- 5th consecutive quarter of positive comparable sales
- Online sales increased 6% year-over-year, representing 39% of total net sales
- Gross margin expanded 60 basis points to 41.8% driven by ROD leverage
- Operating margin improved 140 basis points to 7.5%
- Gap brand reinvigoration playbook driving 5% comp sales growth
- Old Navy continued momentum with 3% comp sales growth
“Gap Inc. delivered strong first quarter results, exceeding financial expectations and gaining market share for the 9th consecutive quarter.”
Gap CEO, on the earnings call
Forward Guidance & Outlook
For full year fiscal 2025, Gap Inc. expects net sales growth of 1% to 2%, underlying operating income growth of 8% to 10% (excluding an estimated $100-$150 million net tariff impact), net interest income of approximately $15 million, an effective tax rate of approximately 26%, capital expenditures of approximately $600 million, and approximately 35 net store closures. Current tariffs (30% on China, 10% on most other countries) could result in gross incremental costs of $250-$300 million, with mitigation strategies covering more than half, leaving a net impact of $100-$150 million primarily weighted to the back half of the year. For Q2 fiscal 2025, the company expects approximately flat net sales year-over-year, gross margin similar to Q1 2025, and operating expenses to leverage slightly year-over-year, with minimal tariff impact to Q2 gross margin.
GAP YoY Financials
GAP Revenue by Segment
GAP Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.