GAP changes
Pick any two versions below to diff them.
- Price
- $23.12 → $21.53(−6.9%)
- Next earnings
- Nov 27, 2026 → Nov 19, 2026
- Next earnings is estimate
- Yes → No
- Thesis
- The market prices Gap for the risk that its turnaround stalls at Old Navy and Athleta, and for the cost of tariffs. In Q2 fiscal 2026, total comparable sales fell 1%, the first fall after nine quarters of growth. Old Navy comparable sales fell 4% because of weaker traffic and a weak women's assortment, and Athleta fell 12%. Only the Gap brand grew fast, with comparable sales up 10%. Substantially all of its products come from factories outside North America, mainly in Vietnam and Indonesia, so US tariffs raise its costs, and the tariff rules change often. Old Navy also gets a new CEO in November 2026. For the gap to close, three things must be true. Old Navy comparable sales must improve in the second half of fiscal 2026, as the full-year outlook assumes. Gap must reach its fiscal 2026 outlook of an adjusted operating margin of about 7.4% to 7.6% and adjusted EPS of about $2.35 to $2.45. Athleta must stop its sales decline. The Q3 fiscal 2026 removed: report, estimated for about added: report on November removed: 27, added: 19, 2026, gives the next test, and the holiday season is the main test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a weaker consumer, which would slow the recovery at Old Navy.
- Checkpoints
- Nov removed: 27, 2026 (estimate): added: 19, 2026: Q3 fiscal 2026 results: Old Navy trend. Pending. Watch: Net sales growth within the 1.5% to 2.5% outlook and better Old Navy comparable sales than in Q2 pass; another fall at Old Navy or a lower full-year outlook fails. Mar 2027 (estimate): Fiscal 2026 results and fiscal 2027 outlook. Pending. Watch: Adjusted EPS within the $2.35 to $2.45 outlook and a fiscal 2027 outlook for sales and margin growth pass; lower EPS or an outlook for falling sales fails.