Q1 27 EPS
$0.38
MISS 20.83%
Est. $0.48
Q1 27 Revenue
$3.50B
MISS 0.78%
Est. $3.52B
vs S&P Since Q1 27
-19.0%
TRAILING MARKET
GAP -19.6% vs S&P -0.7%
Market Reaction
Did GAP Beat Earnings? Q1 2027 Results
Gap Inc. Delivered a mixed first quarter for fiscal 2026, with adjusted results falling short of Wall Street expectations even as a legal windfall dramatically lifted its headline figures. Adjusted diluted EPS came in at $0.38, missing the $0.48 cons… Read more Gap Inc. Delivered a mixed first quarter for fiscal 2026, with adjusted results falling short of Wall Street expectations even as a legal windfall dramatically lifted its headline figures. Adjusted diluted EPS came in at $0.38, missing the $0.48 consensus by 20.80%, snapping a four-quarter streak of consecutive EPS beats; revenue of $3.50 billion grew 1.0% year over year but edged just 0.78% below the $3.52 billion estimate. The primary driver of the earnings shortfall relative to expectations was tariff pressure, which weighed an estimated 200 basis points on merchandise margin, compressing gross margin to 40.5%. Beneath that headwind, brand momentum was uneven, with Gap brand posting a 10% comparable sales gain while Athleta continued to struggle with an 11% comp decline. Looking ahead, management raised its full-year adjusted EPS outlook to $2.30 to $2.40 and recently appointed a new Banana Republic CEO, signaling continued investment in brand reinvigoration even as full-year net sales growth expectations were trimmed to 1% to 2%.
Key Takeaways
- • Gap brand delivered 10% comparable sales growth driven by culturally relevant storytelling and strength in denim, fleece, and kids/baby categories
- • Ninth consecutive quarter of positive comparable sales at 2%
- • Average unit retail increased across all brands
- • Store sales increased 3% year-over-year
- • Market share gains in the U.S. apparel market
- • $313 million net gain from credit card interchange fee litigation settlement boosted GAAP results
- • Merchandise margin pressured by estimated 200 basis points net tariff impact, partially offset by underlying margin expansion
GAP Forward Guidance & Outlook
Gap Inc. raised its full-year fiscal 2026 adjusted diluted EPS outlook to approximately $2.30 to $2.40, up from the prior range of $2.20 to $2.35. On a reported basis (including non-recurring items), full-year diluted EPS is expected to be approximately $2.83 to $2.93. Full-year net sales are now expected to be up 1% to 2% year-over-year, moderated from the prior outlook of up 2% to 3%. Gross margin is expected to be flat to up slightly year-over-year. Adjusted operating margin is expected to be about 7.3% to 7.5%. The company assumes a 10% tariff rate under Section 122 for inventory received after February 24, 2026 through July 24, 2026, followed by a reversion to higher IEEPA-level tariff rates, resulting in approximately $80 million of net tariff relief concentrated in Q2 and Q3. For Q2 fiscal 2026, net sales are expected to be flat to down 1% year-over-year, gross margin flat to down 50 basis points, and operating expense to deleverage approximately 110 to 120 basis points. Capital expenditures are expected to be approximately $650 million for the full year.
GAP YoY Financials
Q1 2027 vs Q1 2026, source: SEC Filings
GAP Revenue by Segment
With YoY comparisons, source: SEC Filings
GAP Revenue by Geography
With YoY comparisons, source: SEC Filings
“In the first quarter, Gap Inc. delivered continued progress against our strategic priorities, including further market share gains and achieving our ninth consecutive quarter of positive comparable sales. Gap brand delivered a standout quarter with a double-digit comp, marking one of the brand's strongest performances in over two decades. Performance across our other brands was varied, reflecting both the different stages of their transformation and some brand-specific dynamics.”
— Richard Dickson, Q1 2027 Earnings Press Release
GAP Earnings Trends
GAP vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
GAP EPS Trend
Earnings per share: estimate vs actual
GAP Revenue Trend
Quarterly revenue: estimate vs actual
GAP Quarterly Results
5 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q1 27 MISS | $0.48 | $0.38 | -20.83% | $3.50B | -0.78% |
| Q4 26 MISS FY | $0.45 | $0.45 | -0.73% | $4.24B | -0.18% |
| FY Full Year | $2.15 | $2.13 | -1.10% | $15.37B | -0.04% |
| Q3 26 BEAT | $0.59 | $0.62 | +5.08% | $3.94B | +0.96% |
| Q2 26 BEAT | $0.55 | $0.57 | +3.64% | $3.73B | -0.21% |
| Q1 26 BEAT | $0.45 | $0.51 | +13.33% | $3.46B | — |