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StocksMedium•29 May 2026•

1 min read

Gap Lowers Annual Guidance Following Q1 Earnings and Revenue Miss

Key Facts

1Gap reported earnings per share of $0.38, missing analyst expectations of $0.39.

2Quarterly revenue reached $3.5 billion, a 1% year-over-year increase but slightly below consensus estimates.

3The company lowered its full-year sales growth forecast to 1% to 2% due to slower performance at its Old Navy brand.

Amid mounting pressures on the apparel retail sector, Gap reported mixed Q1 financial results that highlight operational challenges across its core brands. The company posted earnings per share of $0.38, missing the $0.39 analyst consensus, while revenue reached $3.5 billion, a modest 1% year-over-year increase. Driven by sluggish performance at the Old Navy brand, management lowered its full-year sales growth guidance to a range of 1% to 2%.

This downward revision comes as apparel retailers face stiff competition and inflationary pressures impacting discretionary spending, with market data showing peers like Abercrombie & Fitch delivering stronger relative performance recently. According to CB Consumer Confidence data released on May 26, 2026, the index fell to 93.1 from a previous 93.8, signaling increased caution among American shoppers regarding non-essential purchases.

Investors are now focusing on the company's ability to regain momentum at Old Navy, its primary profit engine, with GAP shares reflecting these concerns at the close of May 29, 2026. Looking ahead, US Core PCE Price Index data, which showed a 0.2% monthly increase on May 28, will remain a critical catalyst in determining consumer purchasing power trends for the upcoming quarter.