Overview

• Comparable sales rose 1% in Q2 on net sales of $3.73 billion, a slight miss, while EPS of $0.57 beat expectations.
• Athleta was the key drag with comparable sales down 9% and revenue down 11% to $300 million as a brand reset continues under incoming CEO Maggie Gauger.
• Old Navy comps increased 2%, the Gap brand rose 4% for a seventh straight positive quarter, and Banana Republic comps climbed 4% despite slightly lower net sales.
• Gap reaffirmed its full‑year net sales growth outlook of 1% to 2% and guided Q3 sales growth of 1.5% to 2.5%.
• Shares fell in late trading after the outlook; management is accelerating sourcing diversification and targeted pricing to blunt tariff pressure and says it does not expect further operating‑income decline from tariff annualization in 2026.