Gap Inc Reports Q2 Earnings with Mixed Brand Performance and Revised Guidance
Gap Inc reported second-quarter fiscal 2026 net sales of $3.7 billion, a decline from the previous year's figures despite exceeding profit expectations due to pricing discipline, inventory control, and strong gross margins. The company experienced mixed performance across its brands: Gap’s namesake brand saw a 10% increase in comparable sales while Banana Republic rose by 3%. In contrast, Old Navy declined by 4%, attributed to seasonal assortment issues and traffic challenges, and Athleta fell by 12% as it continues its turnaround. The company revised its full-year guidance upward for adjusted operating margin and earnings per share but narrowed the sales growth outlook. The Gap brand continued gaining momentum with strong performance in women's apparel, men’s wear, kids' clothing, denim, and fleece categories. Collaborations like one with Hailey Bieber contributed to a successful product launch that created positive halo effects across other areas of the business. Meanwhile, Old Navy plans adjustments for its fall assortment focusing on denim, activewear, sweaters, and knits in response to summer's underperformance.
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