Gap Reports Q2 Earnings Beat and Raises Full-Year Guidance
Gap Inc (NYSE:GAP) reported second-quarter adjusted earnings per share of $0.52, surpassing the analyst consensus estimate by three cents. The company also raised its full-year guidance for adjusted EPS to a range of $2.35–$2.45 from previously projected $2.30–$2.40. Despite quarterly revenue matching expectations at $3.7 billion—a 2% decline year over year—Gap's shares rose more than 13% in pre-market trading due to the positive earnings surprise and improved guidance. The company noted a 1% drop in comparable sales overall, with Gap brand sales rising by 10%, while Old Navy saw a 4% decrease. Adjusted operating margin reached 7.1%, driven by an increase of 20 basis points year over year to 41.4%. The firm also returned $726 million to shareholders through share repurchases and dividends in the first half of the fiscal year. Gap narrowed its sales growth forecast for fiscal 2026, now expecting a rise between 1%–1.5%, while raising adjusted operating margin guidance to approximately 7.4%–7.6%. Bank of America maintained a Neutral rating on Gap stock following these results.
Topics: financial_results guidance_update retail