Gap Inc. (GAP) Stock Plummets 13% on Earnings Miss and Old Navy Weakness
Gap Inc. shares tumbled as much as 13% in after-hours trading following a disappointing fourth-quarter earnings report. The apparel retailer posted earnings of $0.45 per share, narrowly missing the $0.46 consensus estimate, while revenue of $4.24 billion merely matched expectations.
The company's performance was dragged down by lackluster results at Old Navy, its largest brand, which saw comparable sales grow just 3% versus the 4.3% analysts anticipated. Athleta, Gap's athleticwear line, fared worse with an 11% sales decline. Gross margins contracted to 38.1%, pressured by 200 basis points of tariff impacts and temporary store closures during January's severe winter storms.
While Gap maintained its fiscal 2026 revenue growth guidance of 2-3%, the market reacted negatively to the absence of upside surprises. The earnings miss and margin compression highlight ongoing challenges in the retail sector's competitive landscape.
