Gap raised its fiscal 2026 adjusted operating margin and earnings outlook after better-than-expected second-quarter profitability, even as it narrowed its full-year sales growth expectations. The company now expects fiscal 2026 adjusted earnings per share between $2.35 and $2.45, implying year-over-year growth of 10-15%. The raised guidance follows a 25.3% share rally over the past three months, with the stock closing at $23.61 yesterday, about 19.5% below its 52-week high of $29.36. In the second quarter of fiscal 2026, Gap brand comparable sales increased 10%, the 11th consecutive quarter of positive comparable sales growth, while Banana Republic posted its fifth consecutive quarter of positive comparable sales growth. Old Navy and Athleta remain challenged, and management narrowed its full-year sales growth expectations to reflect softer Old Navy performance and continued Athleta difficulties. Gap recently traded at a forward 12-month P/E multiple of 9.22X, below the Retail – Apparel and Shoes industry average of 12.86X.
The Gap, Inc.Gap raised its fiscal 2026 adjusted operating margin and EPS outlook after better-than-expected Q2 profitability
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